KKR & Co. Inc. · NYSE:KKR
KKR & — Investor Day (April 2021)
199 slides from KKR &'s investor day presentation, Apr 13, 2021
Slide 1: KKR & Co. Inc. Investor Day – April 13, 2021
KKR & Co. Inc. Investor Day – April 13, 2021
Slide 2: Legal Disclosures
Legal Disclosures This presentation has been prepared by KKR & Co. Inc. solely for informational purposes for its public stockholders in connection with evaluating the business, operations and financial results of KKR & Co. Inc. and its subsidiaries (collectively, “KKR”), which includes The Global A
Slide 3: Craig A. Larson
Craig A. Larson Partner and Head of Investor Relations
Slide 4: To Begin – An Update from Our July 2018 Investor Day
To Begin – An Update from Our July 2018 Investor Day Key Message July 2018 Update 1 We have many young • Driven by investment performance, innovation and businesses positioned fundraising strength, AUM and FPAUM are well ahead of plan to scale 4
Slide 5: To Begin – An Update from Our July 2018 Investor Day
To Begin – An Update from Our July 2018 Investor Day Key Message July 2018 Update 2 • Total return since July 2018(1): KKR +117% C-Corp Conversion S&P 500 +50% to unlock value S&P Financials Index +39% • KKR remains a unique combination of growth and value (1) Represents total return from July 1, 20
Slide 6: To Begin – An Update from Our July 2018 Investor Day
To Begin – An Update from Our July 2018 Investor Day Key Message Update July 2018 July 2018 3 Framework Actual FPAUM CAGR 8% 14% Organic Gross Annual Investment Performance: Private Equity Growth Equity 17.5% 22% We provided a framework for earnings and book value per adjusted share to double by
Slide 7: Agenda
Agenda Strategic Review Joseph Y. Bae & Scott C. Nuttall Co-Presidents & Co-Chief Operating Officers Introduction to Global Atlantic Allan Levine Chairman & Chief Executive Officer, Global Atlantic Financial Review Robert H. Lewin Chief Financial Officer 7
Slide 8: Joseph Y. Bae & Scott C. Nuttall
Joseph Y. Bae & Scott C. Nuttall Co-Presidents & Co-Chief Operating Officers
Slide 9: We Have Four Main Takeaways For You Today
WE HAVE FOUR MAIN TAKEAWAYS FOR YOU TODAY 9
Slide 10: Scaling Is Happening Faster Than Expected and Our FRE Opportunity Is Significant
1 SCALING IS HAPPENING FASTER THAN EXPECTED AND OUR FRE OPPORTUNITY IS SIGNIFICANT AND HIGHLY VISIBLE WE HAVE FOUR MAIN TAKEAWAYS FOR YOU TODAY 10
Slide 11: We Have Scaled Meaningfully Since Last Investor Day
We Have Scaled Meaningfully Since Last Investor Day ($ in billions) Assets Under Management $349 +98% Global $98 Atlantic $252 +43% $176 $252 July 2018 April 2021 PF April 2021 Investor Day Investor Day Investor Day Note: For instances in this presentation unless otherwise noted, July 2018 Investor
Slide 12: We Are Growing Faster Than the Market
We Are Growing Faster Than the Market ($ in trillions) ($ in billions) Alternatives AUM KKR AUM $14 $349 $98 $10 +11% CAGR +22% CAGR (19% ex-GA) $7 $5 $130 $252 $83 $3 $47 $15 2004 2007 2012 2016 2020E 2004 2007 2012 2016 2020 Note: KKR’s definition of AUM is different from PwC’s definition of AUM,
Slide 13: Powerful Management Fee Profile as Businesses Scale
Powerful Management Fee Profile as Businesses Scale ($ in millions) Private Equity Real Assets Credit Hedge Funds $1,442 $1,249 +15% CAGR $1,093 $905 $798 $732 2015 2016 2017 2018 2019 2020 Note: 2018-2020 reflect recast reporting. See Appendix for important information about our recast financial pr
Slide 14: We Have More Growth to Come
We Have More Growth to Come We have highly differentiated investment platforms Most of our strategies are not yet top 3 We have a significant growth opportunity ahead of us 14
Slide 15: We Have A Number Of Scaling Strategies
We Have A Number Of Scaling Strategies… Private Equity Real Assets Credit Years(1) US PE 44 Europe PE 21 Asia PE 14 Core Private Equity 3 NextGen Technology 5 Health Care Growth 4 Private Markets Asia NextGen Technology 0 Global Impact 2 Customized Portfolio Solutions 8 Infrastructure 10 Asia Infras
Slide 16: …With Large Addressable End Markets
…With Large Addressable End Markets ($ in billions) Businesses Market Size KKR AUM KKR Share Traditional Private Equity $4,740 $88 4.2% Growth $691 $8 1.2% Real Estate $1,090 $27 2.5% Infrastructure $655 $17 2.7% Alternative Credit $1,128 $61 5.4% Leveraged Credit $2,415 $103 4.3% Hedge Funds $3,870
Slide 17: We Have Many Growth Avenues
We Have Many Growth Avenues Traditional Asia III ─ $9bn Asia IV ─ $15bn Private Equity Core Private Equity Healthcare PE Healthcare Growth Adjacencies TMT PE Technology Growth PE / Infrastructure Impact Direct Lending Core Direct Lending US & Europe Asia Infrastructure Infrastructure Geographic Expa
Slide 18: Our Scaling Opportunity – Assets Under Management
Our Scaling Opportunity – Assets Under Management ($ in billions) Real Estate Infrastructure Credit $187 $132 $329 2x greater 8x greater 7x greater $164 $27 $17 KKR Platform Market Leader KKR Platform Market Leader KKR Platform Market Leader Core Private Equity Growth $40 $443 32x greater 5x greater
Slide 19: Several Strategies Coming to Market
Several Strategies Coming to Market New Capital Raised (AUM) Expected Fundraises – 2021/22 ($ in billions) Flagship Strategies $44 • Asia Private Equity • Core Private Equity • Americas Private Equity • Global Infrastructure • Europe Private Equity +72% Growing Strategies • NextGen Tech Growth • Ene
Slide 20: We Expect to Raise $100+ Billion in 2021/22
We Expect to Raise $100+ Billion in 2021/22 Private Equity Infrastructure $40-50 billion $15-20 billion Expected AUM New Capital Raised Expected AUM New Capital Raised Real Estate Credit $10-15 billion $20-25 billion Expected AUM New Capital Raised Expected AUM New Capital Raised Note: This is not a
Slide 21: Large Scaling Opportunity Provides FRE Visibility
Large Scaling Opportunity Provides FRE Visibility Fee Related Earnings $2+ FRE per share in 2022 Note: Per share represents per adjusted share. Our expectations about future Fee Related Earnings has been estimated using various assumptions, and there is no guarantee that our expectations will be ach
Slide 22: Differentiated Investment Performance, Significant Invested Capital, Latent Earnings Power
2 DIFFERENTIATED INVESTMENT PERFORMANCE SIGNIFICANT INVESTED CAPITAL LATENT EARNINGS POWER WE HAVE FOUR MAIN TAKEAWAYS FOR YOU TODAY 22
Slide 23: We Have a World Class Investment Franchise
We Have a World Class Investment Franchise People & Culture World class talent within a team-oriented, one-firm culture Connecting The Dots Use the whole brain to source opportunities and shape our investment views Thematic Investment Approach Utilize macro + deep domain expertise to develop i
Slide 24: We Have a World Class Investment Franchise
We Have a World Class Investment Franchise People & Culture Connecting the Dots Thematic Investment Approach Performance has improved Portfolio Construction Value Creation Deployment has increased Harness Volatility Entrepreneurial Spirit 24
Slide 25: Differentiated Investment Performance
Differentiated Investment Performance Gross IRR ITD Across Key Carry Funds Traditional Private Equity Core Private Equity Growth Equity 64% 40% 38% (1) 34% 31% 27% 21% Americas Europe Asia Core I NextGen Health Impact I XII IV III Tech I Care I Infrastructure Real Estate Credit (1) 52% 21% 20% 15% 1
Slide 26: As Scaling Has Progressed, Capital Deployment Is Ramping
As Scaling Has Progressed, Capital Deployment Is Ramping ($ in billions) $29.5 Capital deployment has accelerated since 2015 +31% CAGR +8% CAGR $7.7 $5.3 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 26
Slide 27: As Scaling Has Progressed, Capital Deployment Is Ramping
As Scaling Has Progressed, Capital Deployment Is Ramping $23 billion 4-Year Average Deployment $9 billion 4-Year Average Deployment 2013 2014 2015 2016 2017 2018 2019 2020 27
Slide 28: Well-Positioned to Realize Performance Income
Well-Positioned to Realize Performance Income ($ in billions) Gross Unrealized Carried Interest $4.7 +42% CAGR $3.6 $2.3 2018 2019 2020 28
Slide 29: Strong Balance Sheet Investment Performance
Strong Balance Sheet Investment Performance Average Annual Investment Return 18% 17% 13% 13% 10-Year 5-Year 3-Year 1-Year 29
Slide 30: Balance Sheet Deployment Has Also Accelerated
Balance Sheet Deployment Has Also Accelerated $1.5 billion $2.4 billion 4-Year Average Deployment 4-Year Average Deployment 2013 2014 2015 2016 2017 2018 2019 2020 30
Slide 31: Well-Positioned to Realize Investment Income
Well-Positioned to Realize Investment Income ($ in billions) Balance Sheet Embedded Gains(1) Core Private Equity Additional Strategies $4.4 6.1x $3.1 $2.4 $1.8 $0.7 $1.2 $0.5 $0.7 $0.2 2018 2019 2020 (1) Balance sheet embedded gains represents unrealized investment income. 31
Slide 32: Well-Positioned to Realize Performance and Investment Income
Well-Positioned to Realize Performance and Investment Income Large Future Carried Interest Potential Large Future Investment Income Potential ($ in millions, unless otherwise noted) ($ in millions, unless otherwise noted) Realized Carried Interest Realized Investment Income Gross Unrealized Carried
Slide 33: Ramping Deployment Indicates Coming Monetizations
Ramping Deployment Indicates Coming Monetizations Fee Related Earnings $2+ FRE per share in 2022 Latent Earnings $9.1 billion total unrealized gains (carry + balance sheet) Note: Per share represents per adjusted share. Our expectations about future Fee Related Earnings has been estimated using vari
Slide 34: The Global Atlantic Acquisition Increases Our Opportunity Set
3 THE GLOBAL ATLANTIC ACQUISITION INCREASES OUR OPPORTUNITY SET FEE RELATED EARNINGS | DISTRIBUTABLE EARNINGS | BOOK VALUE PER SHARE WE HAVE FOUR MAIN TAKEAWAYS FOR YOU TODAY 34
Slide 35: Global Atlantic Snapshot and Transaction Benefits
Global Atlantic Snapshot Transaction Benefits Exceptional leadership Adds scale to KKR investing platforms KKR • Accelerates path to top 3 Ability to Source Best-in-Class Investments Multiple opportunities to drive growth and KKR economics • Investment performance • Facilitate inorganic growth
Slide 36: Global Atlantic Impact on Our Asset Base
Global Atlantic Impact on Our Asset Base FPAUM Perpetual Capital(1) ($ in billions) ($ in billions) $120 $276 48% 5x $186 $22 2020 PF 2020 2020 PF 2020 Credit AUM Real Estate AUM ($ in billions) ($ in billions) $164 $27 2x 81% $15 $78 2020 PF 2020 2020 PF 2020 (1) For the purpose of this presentatio
Slide 37: Global Atlantic Bolsters Multiple Key Metrics
Global Atlantic Bolsters Multiple Key Metrics Fee Related Earnings $2+ FRE per share in 2022 Latent Earnings $9.1 billion total unrealized gains (carry + balance sheet) Global Atlantic $98 billion perpetual capital Note: Per share represents per adjusted share. Our expectations about future Fee Rela
Slide 38: We Expect Significant Acceleration of After-Tax DE
4 WE EXPECT SIGNIFICANT ACCELERATION OF AFTER-TAX DE WE HAVE FOUR MAIN TAKEAWAYS FOR YOU TODAY 38
Slide 39: We Expect Significant Acceleration of After-tax DE
We Expect Significant Acceleration of After-tax DE Fee Related Earnings $2+ FRE per share in 2022 Latent Earnings $9.1 billion total unrealized gains (carry + balance sheet) Global Atlantic $98 billion perpetual capital After-tax $4-5 per share Distributable Earnings Expected annual After-tax DE in
Slide 40: We Have Four Main Takeaways For You Today
WE HAVE FOUR MAIN TAKEAWAYS FOR YOU TODAY SCALING IS HAPPENING FASTER THAN EXPECTED AND OUR 1 FRE OPPORTUNITY IS SIGNIFICANT AND HIGHLY VISIBLE DIFFERENTIATED INVESTMENT PERFORMANCE + 2 SIGNIFICANT INVESTED CAPITAL = LATENT EARNINGS POWER THE GLOBAL ATLANTIC ACQUISITION 3 INCREASES OUR OPPORTUNITY S
Slide 41: Work hard now… …it will pay off later… …later is NOW.
Work hard now… …it will pay off later… …later is NOW.
Slide 42: The Lifecycle of a Platform
The Lifecycle of a Platform KKR
Slide 43: How Do We View the Lifecycle Of a Platform?
How Do We View the Lifecycle Of a Platform? Early Developing Maturing Scaled Platform Formation Product Buildout Building Scale Scale Benefits Fund I II / III III / IV IV+ Begins to impact Management Modest Growing management fee line Meaningful Fees item Portfolio companies + Capital Begin to see s
Slide 44: How Do We View the Lifecycle Of a Platform?
How Do We View the Lifecycle Of a Platform? Early Developing Maturing Scaled Platform Formation Product Buildout Building Scale Scale Benefits Core Private Equity Private Equity Next Generation Technology North America PE Asia NextGen Tech Healthcare Strategic Growth Europe PE Global Impact Asia PE
Slide 45: How Do We View the Lifecycle Of a Platform?
How Do We View the Lifecycle Of a Platform? Early Developing Maturing Scaled Platform Formation Product Buildout Building Scale Scale Benefits Core Private Equity Private Equity Next Generation Technology North America PE Asia NextGen Tech Healthcare Strategic Growth Europe PE Global Impact Asia PE
Slide 46: Infrastructure Case Study
Infrastructure Case Study KKR
Slide 47: How We Build Investment Platforms
How We Build Investment Platforms Capturing more of everything we do Drive meaningful realized gains Scale strategies and innovate Powerful Multiplier Strong performance of flagship strategies 47
Slide 48: How We Build Investment Platforms
How We Build Investment Platforms Capturing more of everything we do Drive meaningful realized gains Scale strategies and innovate Strong performance of flagship strategies 48
Slide 49: Strong & Consistent Performance
Strong & Consistent Performance For over a decade, we have consistently delivered on our strategy Infrastructure I Infrastructure II 17.5% Gross IRR ITD (15.5% Net IRR) 19.7% Gross IRR ITD (17.0% Net IRR) 2.1x Gross Multiple (1.9x Net Multiple) 1.7x Gross Multiple (1.6x Net Multiple) 6.1% Average an
Slide 50: How We Build Investment Platforms
How We Build Investment Platforms Capturing more of everything we do Drive meaningful realized gains Scale strategies and innovate Strong performance of flagship strategies 50
Slide 51: Track Record of Scaling and Improved Quality of Capital
Track Record of Scaling and Improved Quality of Capital Blended Management Fee/Carry Rate: 1%/10% 1%/11% 1.2%/16% 1.2%-1.3%/20% Committed Capital ($ in billions) $7.2 $3.0 $1.0 Infrastructure Infrastructure Infrastructure Infrastructure Fund I Fund II Fund III Fund IV (1) (1) The size and terms of t
Slide 52: Expansion Across Geographies and Into Adjacencies
Expansion Across Geographies and Into Adjacencies Americas Europe Asia Infrastructure I (2010) Infrastructure II (2014) Global Asia Infrastructure Infrastructure Infrastructure III (2018) (2020) Infrastructure IV (2021) KKR Diversified Core (2020) Core Target Return: 8-10% Gross Infrastructure Targe
Slide 53: Asia Infrastructure – A Recent Adjacency
Asia Infrastructure – A Recent Adjacency Asia-Pacific Infrastructure Investor Infrastructure Investors 2020 Awards Global Fund Manager of the Year $3.9 billion Fund Manager of the Year in Asia-Pacific Largest Asia-Pacific focused Fundraise of the Year in Asia-Pacific infrastructure fund in the
Slide 54: Infrastructure Platform AUM Profile
Infrastructure Platform AUM Profile $30+bn 2022 Estimated $17bn 2020 Actual $15bn 2019 Actual $13bn 2018 Actual Note: Our expectations about our ability to raise new capital and future Assets Under Management have been estimated using various assumptions, and there is no guarantee that our expectati
Slide 55: Infrastructure Platform Management Fee Profile
Infrastructure Platform Management Fee Profile $275-300mm 2022 Estimated $158mm 2020 Actual $120mm 2019 Actual $84mm 2018 Actual Note: 2018-2020 management fees represent recast financials. See Appendix for important information about our recast financial presentation. Future Management Fees have be
Slide 56: How We Build Investment Platforms
How We Build Investment Platforms Capturing more of everything we do Drive meaningful realized gains Scale strategies and innovate Strong performance of flagship strategies 56
Slide 57: Infrastructure Deployment By Fund
Infrastructure Deployment By Fund ($ in billions) Infrastructure I Infrastructure II Infrastructure III Asia Infrastructure $1.6 $1.6 billion 4-Year Average Deployment $413 million 4-Year Average Deployment $0.1 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 57
Slide 58: Meaningful Latent Earnings Potential
Meaningful Latent Earnings Potential Infrastructure Deployment ($ in billions) $2.0 $1.6 $1.6 $1.2 $0.7 $0.3 $0.3 $0.3 $0.1 $0.2 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Infrastructure Realized Carried Interest ($ in millions) $204 $18 $15 $17 2011 2012 2013 2014 2015 2016 2017 2018 2019 20
Slide 59: How We Build Investment Platforms
How We Build Investment Platforms Capturing more of everything we do Drive meaningful realized gains Scale strategies and innovate Strong performance of flagship strategies 59
Slide 60: Capital Markets Opportunity Set Grows As Platform Scales
Capital Markets Opportunity Set Grows As Platform Scales Infrastructure Deployment ($ in billions) $2.0 $1.6 $1.6 $1.2 $0.7 $0.3 $0.3 $0.3 $0.1 $0.2 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Infrastructure I Infrastructure II Infrastructure III Asia Infrastructure Infrastructure Capital Mark
Slide 61: How We Build Investment Platforms
How We Build Investment Platforms Capturing more of everything we do Drive meaningful realized gains Scale strategies and innovate Powerful Multiplier Strong performance of flagship strategies 61
Slide 62: Infrastructure – Example of a Maturing Business
Infrastructure – Example of a Maturing Business… Management Capital Markets Realized Realized AUM Fees Transaction Fees Carried Interest Investment Income Distributable AUM Revenues(1) ($bn) ($mm) $750 $20 $17bn Final Close: Infrastructure III $15 $13bn $500 $10 Final Close: Infrastructure II $250 $
Slide 63: ...With Significant Room To Grow
...With Significant Room To Grow ($ in billions) 2020 Distributable Revenues by Strategy Management Fees Carried Interest Capital Markets Investment Income $1,954 $548 $543 Infrastructure Traditional Private Equity Note: For illustrative purposes only. There is no guarantee that infrastructure can o
Slide 64: Strategic Growth Plan
Strategic Growth Plan KKR
Slide 65: Our Four Major Businesses
Our Four Major Businesses Global Private Equity Credit Real Assets Capital Markets 65
Slide 66: Global Private Equity
Global Private Equity KKR
Slide 67: Global Private Equity Platform
Global Private Equity Platform $113billion Assets Under Management Traditional Private Equity Core Private Equity $88 billion $14 billion Assets Under Management Assets Under Management Growth Equity Customized Portfolio Solutions $8 billion $4 billion Assets Under Management Assets Under Management
Slide 68: Global Private Equity Platform
Global Private Equity Platform $113billion Assets Under Management Early Developing Maturing Scaled Platform Formation Product Buildout Building Scale Efficient Scaling North America PE Private Equity Europe PE Asia PE Core Core Private Equity Next Generation Technology Growth Asia NextGen Tech Heal
Slide 69: Traditional Private Equity – Exceptional Long Term Track Record
Traditional Private Equity – Exceptional Long Term Track Record Annualized PE Fund Performance 40% 35% 34% 31% 27% 27% 26%(1) 24% 23% 22% 20% 19% 19% 18% 18% 17% 17% 15% 14% 14% 14% 13% 13% 12% 12%12% 12% 12% 8% 7% 6% 6%7% 3% Gross Return S&P 500 Overall KKR Return S&P 500 Total Return Note: Past pe
Slide 70: Traditional Private Equity – AUM Continuing to Grow and Scale
Traditional Private Equity – AUM Continuing to Grow and Scale Asia North America Europe ($ in billions) ($ in billions) ($ in billions) $15.0 $13.5 $6.4 $9.0 $8.7 $3.5 $5.8 Asia Asia Asia Americas Americas Americas Europe Europe Europe II III IV (1) XI XII XIII IV V VI KKR’s regional approach vs. gl
Slide 71: Traditional Private Equity – Our Presence In Asia
Traditional Private Equity – Our Presence In Asia Private Equity International Asia Private Equity IV 2020 Awards Large Cap Firm of the Year in Asia 5th Consecutive Year $15 billion Fundraise of the Year in Asia Largest Asia Pacific focused private equity fund in the market Deal of the Year in
Slide 72: Traditional Private Equity – Accelerating Deployment
Traditional Private Equity – Accelerating Deployment ($ in billions) Americas PE Europe PE Asia PE $10.0 $8.4 billion 4-Year Average Deployment $4.6 billion 4-Year Average Deployment $3.4 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 72
Slide 73: Core Private Equity – Strategy
Core Private Equity – Strategy $14billion Strong Pipeline of Deals Fit Investment Profile Assets Under Management More Limited • What we saw… Control Disruptors • Risk-return mismatched to private equity • Ability to own stable platforms with good High-Quality Long Duration cash flows and the abilit
Slide 74: Core Private Equity – Key Metrics
Core Private Equity – Key Metrics Portfolio by Geography(1) Deployment Since Inception ($ in billions) $2.8 Asia 17% $1.9 $1.9 Americas $1.0 Europe 28% 56% 2017 2018 2019 2020 Strong Investment Performance Embedded Gain on the Balance Sheet ($ in millions) $1,229 21% Gross IRR ITD $229 $686 2018 201
Slide 75: Growth Equity – Assets Under Management Are Scaling
Growth Equity – Assets Under Management Are Scaling ($ in billions) Growth Equity AUM has increased 8x since the strategy launched in 2016 Health Care Strategic Growth NextGen Tech Global Impact $8.1 $5.9 $3.0 $2.1 $1.0 2016 2017 2018 2019 2020 75
Slide 76: Next Generation Technology Growth – Strategy Overview
Next Generation Technology Growth – Strategy Overview Differentiated What we saw Strategy Scaling Performance ($ in billions) $2.1 Digital disruption Emerging businesses seeking capital 34% NGT Gross IRR ITD Proven ability as a $0.7 value-added partner Global opportunity NGT NGT II NGT III Asia NGT
Slide 77: Health Care Strategic Growth – Strategy Overview
Health Care Strategic Growth – Strategy Overview Differentiated What we saw Strategy Scaling Performance ($ in billions) Secular growth in First closes healthcare held in $2.8 4Q20 and 1Q21 Persistent funding 64% gap for growth companies $1.3 HCSG Gross IRR ITD KKR = Deep Healthcare expertise Proven
Slide 78: Global Impact – Strategy Overview
Global Impact – Strategy Overview Differentiated What we saw Strategy Scaling Performance ($ in billions) Innovate and build off KKR ESG $1.2 leadership Few sources of funding Leverage private 38% Impact Gross IRR ITD equity and infrastructure playbook Opportunity to affect societal change Impact Im
Slide 79: Growth Equity Deployment Has Scaled As Funds Have Grown
Growth Equity Deployment Has Scaled As Funds Have Grown ($ in billions) Health Care Strategic Growth NextGen Tech Global Impact $1.7 $0.9 $0.5 $0.3 $0.1 2016 2017 2018 2019 2020 79
Slide 80: Customized Portfolio Solutions – Strategy Overview
Customized Portfolio Solutions (“CPS”) − Strategy Overview Strategy Diversified Portfolio Allocations are customizable • Attractive alternative to traditional Private KKR KKR Co-Investments Flagship Funds Equity fund-of-funds • High degree of customization and flexibility • Co-investment designed to
Slide 81: Global Private Equity AUM Growth
Global Private Equity AUM Growth ($ in billions) Traditional Private Equity Core Private Equity $113 Growth Equity $4 CPS $8 +16% CAGR $14 $6 $3 $11 $9 $10 $88 $70 $72 $67 $60 2016 2017 2018 2019 2020 81
Slide 82: Credit
Credit
Slide 83: Credit – Platform Overview
Credit – Platform Overview $164billion Assets Under Management Dislocated / Leveraged Credit Private Credit Opportunistic Credit $103 billion $52 billion $8 billion Assets Under Management Assets Under Management Assets Under Management Asset-Based Finance, Direct Lending, BDCs, Bank Loans, High Yie
Slide 84: Credit – AUM Since Inception (Before Global Atlantic)
Credit – AUM Since Inception (Before Global Atlantic) ($ in billions) AUM CAGR 22% 2004 – 2020: 33% $78 2016 – 2020: 22% $36 $17 $13 $1 2004 2008 2012 2016 2020 Leveraged Credit Private Credit Dislocated / Opportunistic Track record of exceptional AUM growth... 84
Slide 85: Revenue Profile Shows Increased Scale and Breadth
Revenue Profile Shows Increased Scale and Breadth Leveraged Credit Alternative Credit Capital Markets Realized AUM Management Fees Management Fees Transaction Fees Performance Income Distributable Global AUM Revenues Atlantic ($bn) ($mm) $164bn $480 $90 $80 $400 $70 $320 $60 $50 $240 $40 $160 $30 $2
Slide 86: Credit – Global Atlantic Doubles AUM Footprint
Credit – Global Atlantic Doubles AUM Footprint ($ in billions) 2016-2020 AUM CAGR $164 Including GA: 46% Excluding GA: 22% +2x $78 $36 $17 $13 $1 2004 2008 2012 2016 2020 PF 2020 Leveraged Credit Private Credit Dislocated / Opportunistic …with significant further ramp in AUM 86
Slide 87: Our Opportunity with GA – Virtuous Circle of Growth
Our Opportunity with GA – Virtuous Circle of Growth Insurance Assets with a need for Perpetual Capital Attractive Risk / Reward Origination Platforms Corporate Lending • Sponsors • Corporations • Intermediaries Insurance Expand Platform Origination Asset-Based Finance Scales • Consumer / Mortgage Fi
Slide 88: Credit Platform
Credit Platform $164billion Assets Under Management Early Developing Mature Scaled Platform Formation Product Buildout Building Scale Efficient Scaling Bank Loans Asset-Based Finance CLOs Credit High Yield Asia Credit Europe Direct Lending BDCs Mezzanine Public Opportunistic Credit US Direct Lending
Slide 89: Credit Platform
Credit Platform $164billion Assets Under Management Early Developing Mature Scaled Platform Formation Product Buildout Building Scale Efficient Scaling Bank Loans Asset-Based Finance CLOs Credit High Yield Asia Credit Europe Direct Lending BDCs Mezzanine Public Opportunistic Credit US Direct Lending
Slide 90: Asia Credit
Asia Credit Large Addressable Asia represents 60% of Global GDP Growth Market but only 8% of Global Private Credit AUM Private Equity becoming more prevalent, Growing Capital Needs SMEs underserved by traditional providers Global credit expertise + KKR Positioning preeminent Asia franchise Named 202
Slide 91: Credit Platform
Credit Platform $164billion Assets Under Management Early Developing Mature Scaled Platform Formation Product Buildout Building Scale Efficient Scaling Bank Loans Asset-Based Finance CLOs Credit High Yield Asia Credit Europe Direct Lending BDCs Mezzanine Public Opportunistic Credit US Direct Lending
Slide 92: Leveraged Credit − Following Bank Loan Playbook In High Yield
Leveraged Credit − Following Bank Loan Playbook In High Yield ($ in billions) Bank Loan Assets Under Management $35 +2.4x Bank Loans $14 Top Quartile Performance 1-Year | 3-Year | 5-Year | 7-Year 2015 2020 High Yield Assets Under Management High Yield $7 Top Quartile Performance 1-Year | 3-Year | 5-
Slide 93: Dislocated / Opportunistic Credit
Dislocated / Opportunistic Credit $8billion Dislocation Fund I Platform Assets Under Management 52% Gross IRR ITD • Raised ~$4 billion over 4 months in 2020 through both fund and SMA format • ~40% of LPs are new to KKR Opportunistic Strategy Flexible and nimble pool of capital Increased allocation C
Slide 94: Credit Platform
Credit Platform $164billion Assets Under Management Early Developing Mature Scaled Platform Formation Product Buildout Building Scale Efficient Scaling Bank Loans Asset-Based Finance CLOs Credit High Yield Asia Credit Europe Direct Lending BDCs Mezzanine Public Opportunistic Credit US Direct Lending
Slide 95: KKR’s Private Credit Asset-Based Finance Platform
KKR’s Private Credit Asset-Based Finance Platform… Gross $4 billion Deployed Across 13% IRR ITD vs. 8% BAML Global High Yield Index 40 Investments Since 2016 Consumer / Mortgage Finance Contractual Cash Flows • Auto lending • Home improvement • Financial contracts • Risk transfer loans transactions
Slide 96: …Even Better Positioned Together with Global Atlantic
…Even Better Positioned Together with Global Atlantic Multiple Solutions, KKR One Provider Improves Strategic Consumer / Mortgage Finance Positioning and Growth Trajectory Expands Product Contractual Cash Flows ~$20billion Offering and Platform Breadth Assets Under Management • Additional scale acro
Slide 97: Credit Platform
Credit Platform $164billion Assets Under Management Early Developing Mature Scaled Platform Formation Product Buildout Building Scale Efficient Scaling Bank Loans Asset-Based Finance CLOs Credit High Yield Asia Credit Europe Direct Lending BDCs Mezzanine Public Opportunistic Credit US Direct Lending
Slide 98: Direct Lending – Leading, Global Platform
Direct Lending – Leading, Global Platform Investment Performance $17 billion 17% Assets Under Management 2005 Inception Date(1) 4% 5% ~220 Direct Lending Fund Transactions Completed Lending Partners III S&P / LSTA US Barclays US 84% Leveraged Loan Aggregate Index Sole or Lead Role Index KKR Gross IR
Slide 99: Wide Breadth of Products Across Geographies and Structures
Wide Breadth of Products Across Geographies and Structures 2007 Current CLOs CLOs Loans Loans KKR Financial Holdings (KFN) Opportunistic Credit High Yield Structured Credit BDCs US Direct Lending US & Europe Asset-Based Finance Asia Mezzanine Dislocated / Opportunistic Asia Credit AUM $11bn $78bn $1
Slide 100: Credit – Strategic Growth Plan
Credit – Strategic Growth Plan Expand on success in loans, Leveraged Credit drive growth in high yield Expand into Asia Credit, continue investment Private Credit in Asset-Based finance origination Dislocated / Build on investment success Opportunistic Credit Global Atlantic Execute on Global Atlant
Slide 101: Real Assets
Real Assets KKR
Slide 102: Real Assets Platform
Real Assets Platform $47billion Assets Under Management Real Estate Equity Real Estate Credit $11 billion $15 billion Assets Under Management Assets Under Management Infrastructure Energy $17 billion $3 billion Assets Under Management Assets Under Management 102
Slide 103: Real Assets Platform
Real Assets Platform $47billion Assets Under Management Perpetual Capital Early Developing Maturing Scaled Platform Formation Product Buildout Building Scale Efficient Scaling RE Equity Opportunistic Europe RE Opportunistic Core+ Real Estate Opportunistic Asia RE Americas RE Private 40 Act Vehicle I
Slide 104: Real Estate – AUM Continues to Scale
Real Estate – AUM Continues to Scale ($ in billions) $27 $15 RE Credit $4 $11 RE Equity $4 2015 July 2018 April 2021 Investor Day Investor Day 104
Slide 105: Real Estate – Equity Strategies
Real Estate – Equity Strategies Opportunistic Americas Opportunistic Europe REPA funds REPE funds Opportunistic Asia Core+ Real Estate AREP fund KPPA fund 105
Slide 106: Real Estate – Equity Strategies
Real Estate – Equity Strategies Our More Mature Strategies Are Performing Well REPA REPA II REPE Vintage 2013 2017 2016 Gross IRR / MOIC 16% / 1.4x 21% / 1.2x 15% / 1.4x Distributions to Paid-In (DPI) 134% 31% 29% Recent and Ongoing Fundraising Momentum Across The Platform ($ in billions) Final clos
Slide 107: Real Estate Equity – Capital Deployment
Real Estate Equity – Capital Deployment ($ in billions) $2.2 $1.4 $1.2 $0.4 $0.3 $0.2 2015 2016 2017 2018 2019 2020 107
Slide 108: Real Estate – Credit Strategies
Real Estate – Credit Strategies CMBS B-Piece Mortgage REIT RECOP funds NYSE: KREF Conduit CMBS Primarily senior, transitional loans Stabilized Opportunistic RESTAC fund ROX fund Single Asset Single Borrow CMBS Opportunistic / Dislocated Loans Global Atlantic further expands Real Estate Credit’s prod
Slide 109: Real Estate – Credit Strategies
Real Estate – Credit Strategies Our More Mature Strategies Are Performing Well RECOP RECOP II KREF(2) Vintage 2017 2019 Market Capitalization $1.1bn Gross IRR / MOIC 7% / 1.2x 8%(1) / 1.1x Price-to-Book 1x Gross Current Yield 9.8% 9.6% Dividend Yield 8.9% Recent and Ongoing Fundraising Momentum Acro
Slide 110: Real Estate – Credit Strategies Expand With Global Atlantic
Real Estate – Credit Strategies Expand With Global Atlantic Multiple Solutions, KKR One Provider Opportunistic RE Credit Improves Strategic Positioning and Growth Mortgage REIT Trajectory Commercial (transitional loans) Mortgage Loans Stabilized First Mortgage Loans Expands Product CMBS B-Piece Offe
Slide 111: Real Assets AUM Growth
Real Assets AUM Growth ($ in billions) Infrastructure $47 Real Estate Global Atlantic – Real Estate $3 Energy $12 +41% CAGR $28 $3 $15 $22 $3 $9 $15 $6 $12 $3 $3 $6 $17 $4 $15 $13 $5 $6 2016 2017 2018 2019 2020 111
Slide 112: Capital Markets
Capital Markets KKR
Slide 113: Capital Markets Platform
Capital Markets Platform $480million 2020 KCM Transaction Fees Early Developing Maturing Scaled Platform Formation Product Buildout Building Scale Scale Benefits Capabilities Product KKR Capital Markets Opportunities Growth Equity Revenue Third Party Real Estate Infrastructure Private Equity Core Pr
Slide 114: A Differentiated Capital Markets Franchise
A Differentiated Capital Markets Franchise Capital Markets Transaction Fees ($ in millions) Average $631 $490 $480 $440 $410 $218 $191 $182 $171 $172 $129 $143 $105 $66 $34 $18 $1 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 First Five Years Second Five Years Today 23 Deals
Slide 115: Capital Markets Fees Continue to Diversify
Capital Markets Fees Continue to Diversify First Five Years Second Five Years 2017-2020 2% 2% 2% 8% 4% 4% 9% 3% Fee Contribution By Strategy 27% 14% 50% 65% 89% 20% 0% 1% Energy / Other / Traditional PE Growth Equity Third Party Infrastructure Core PE Real Estate Balance Sheet 10% Fee Contribution 1
Slide 116: Diversification Has Driven Growth and Stability
Diversification Has Driven Growth and Stability ($ in millions) Capital Markets Transaction Fees $490 $37 $22 $15 $71 2.7x $97 $5 $182 $6 $3 $51 $243 $122 2016 2017-2020 Average PE Growth Equity Third Party Infrastructure Energy / Real Estate Other / Balance Sheet Core 116
Slide 117: Key Business Drivers
Key Business Drivers Our Growth Drivers... Create Opportunities For... • The scaling of our investing businesses • Higher revenue • Deployment activity • Greater diversification • Monetization activity • Size of portfolio – financings, refinancings, repricings, acquisition • More ways to win finance
Slide 118: Deployment Brings Additional Capital Markets Opportunities
Deployment Brings Additional Capital Markets Opportunities Capital Deployment Across The Firm +19% CAGR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Capital Markets Transaction Fees 3-Year Rolling Average +25% CAGR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 118
Slide 119: KCM is Scaling Across Our Businesses – Transaction Fees
KCM is Scaling Across Our Businesses – Transaction Fees ($ in millions) Asia Infrastructure Average Average $68 $71 $30 $13 $8 $1 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Core Private Equity Third-Party Average $97 $46 $41 $55 $32
Slide 120: Scaled Third Party Business With A Lead Left Franchise
Scaled Third Party Business With A Lead Left Franchise Third Party Transactions Third Party Clients Transacting (Each Sponsor Counted Only 1x Per Year) 84 47 76 43 41 57 51 25 24 8 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 120
Slide 121: Unique Differentiators
Unique Differentiators KKR
Slide 122: Unique Differentiators
Unique Differentiators 1. 1 Global Atlantic 2. 2 Our Asia Franchise 1. 3 Winning In Technology 4 ESG – Building on our Strong Capabilities 2. 5 Our Brand, Track Record and Opportunity with Individual Investors 1. 6 Our People & Culture 2. 122
Slide 123: Global Atlantic
Global Atlantic KKR
Slide 124: Overview of Global Atlantic
1 Overview of Global Atlantic Leading U.S. insurance company focused on attractive life and annuity markets • Founded at Goldman Sachs in 2004 and separated as an independent company in 2013 • Acquired by KKR as a majority owned subsidiary in 2021; ~39% owned by third-party investors and employees •
Slide 125: Journey to Date – Active Management Across Market Cycles
1 Journey to Date – Active Management Across Market Cycles $98bn Assets Under Management Record 4Q Results (+$15bn Closed AUM Acquisition of Closed between Global Atlantic largest Closed KKR signing (Feb 1, 2021) reinsurance $1bn to closing) transaction Ivy ($9bn Co-Invest GAAP Vehicle LLC Achieved
Slide 126: How Global Atlantic Manages its Business
1 How Global Atlantic Manages its Business 1 • Global Atlantic has two channels to grow assets: individual and institutional Growing Assets • Growth in assets increases Global Atlantic’s opportunity to serve customers and clients and increases their ability to earn income 2 Easy to understand, sprea
Slide 127: Overview of Individual Business
1 Overview of Individual Business • Operate in attractive, fastest growing markets(1) Franchise Highlights • ~$220bn industry annuity sales(2) $8.1bn • 55% fixed annuity sales(2) Average Annual Sales(4) 10% • Rank as a top carrier in target markets(2) • Top 5 fixed annuity carrier Fixed-Rate Annuity
Slide 128: Overview of Institutional Business
1 Overview of Institutional Business • Operate in attractive, large markets Franchise Highlights • $3.4tn Life & Annuity general account reserves(1) $3.9bn Average Block Size(4) • $100bn+ assets transferred via reinsurance in 2020(2) 2 – 3 Block Deals p.a.(4) • $25bn+ pension liabilities transferred
Slide 129: KKR & Global Atlantic Partnership Drive Potential for Growth
1 KKR & Global Atlantic Partnership Drive Potential for Growth Large & Growing Leading U.S. Leading Global Opportunity Set Insurance Platform Investment Firm Global Atlantic’s key competitive strengths… … are enhanced by KKR • Historically low U.S. Treasury Diversified Business with a • With KKR, Gl
Slide 130: Forward Growth Opportunities
1 Forward Growth Opportunities Multiple $1bn+ Growth Opportunities Margins & Capital FY 2020 Global Atlantic Volumes FY 2020 Top Industry Player Volumes ($bn) ($bn) $9.9 $28.8 $5.5 $6.0 $8.1 Investment Opportunities $15.5 Ability to improve inforce and new business pricing and results by leveraging
Slide 131: Global Atlantic is “Set Up to Win” with KKR
1 Global Atlantic is “Set Up to Win” with KKR Compelling Fundamentals Leading Life & Annuity Franchise • Multiple $1bn growth opportunities • Scale and margin expansion KKR Origination & Capital Capabilities Strong AUM + AOE + Long-Term Book Value Growth Opportunity Note: Represents Global Atlantic
Slide 132: Unique Differentiators
Unique Differentiators 1. 1 Global Atlantic 2. 2 Our Asia Franchise 1. 3 Winning In Technology 4 ESG – Building on our Strong Capabilities 2. 5 Our Brand, Track Record and Opportunity with Individual Investors 1. 6 Our People & Culture 2. 132
Slide 133: Favorable Long-Term Macro Fundamentals in Asia
2 Favorable Long-Term Macro Fundamentals in Asia Asia’s Dominance Will Continue to Grow Favorable Population Dynamics in Asia (in millions) Contribution to Global Real GDP Growth (%) Millennials (b. 1980-1994) (Average 2021E to 2025E) 9% 834 10% Asia Millennial US Population is Asia accounts 30% Eur
Slide 134: Industry Leading Asia-Pacific Investment Platform
2 Industry Leading Asia-Pacific Investment Platform GREATER CHINA KOREA (18) (30) INDIA (42) JAPAN (27) SOUTHEAST ASIA (27) AUSTRALIA (25) Additional Regional / Generalists (25) Total: 194 Note: Headcount numbers include Senior and Industry Advisors. Senior and Industry Advisors are engaged as consu
Slide 135: Exceptional Private Equity Track Record
2 Exceptional Private Equity Track Record 22.0% 18.9% $22.2bn 5.9% 2.3x Gross IRR Net IRR MSCI APAC Invested across 86 Fully realized deals Gross MOIC for fully Pan Asia private realized deals equity deals (2.1x net) 18.8% Gross IRR (13.7% Net IRR) 1.7x Gross Multiple (1.5x Net Multiple) including p
Slide 136: Meaningful Platform Extension Opportunities
2 Meaningful Platform Extension Opportunities Asia Private Equity Asia $1.7bn Real ($ in billions) $15.0 raised Estate Asia $3.9bn Infra raised $9.0 $5.8 Asia Upcoming Credit Opportunity $4.0 Asia Upcoming Growth Opportunity Asia I Asia Asia Asia II III IV Note: Asia IV and Asia Infra include AUM pl
Slide 137: Asia Platform AUM Growth
2 Asia Platform AUM Growth ($ in billions) Asia Credit Private Equity Asia NGT Growth Infrastructure $37 Real Estate $2 $4 +39% CAGR $20 $18 $17 $1 $32 $10 $18 2016 2017 2018 2019 2020 Note: Only includes funds exclusive to Asia-Pacific. 137
Slide 138: Unique Differentiators
Unique Differentiators 1. 1 Global Atlantic 2. 2 Our Asia Franchise 1. 3 Winning In Technology 4 ESG – Building on our Strong Capabilities 2. 5 Our Brand, Track Record and Opportunity with Individual Investors 1. 6 Our People & Culture 2. 138
Slide 139: A Top-Down, Theme Based Approach
3 A Top-Down, Theme Based Approach E-Commerce & Digitalization Rise of the Savings & Tax Global Deferral Millennial Health & ESG Macro Themes Wellness Personal Nesting Safety Resiliency & Preparedness 139
Slide 140: An Integrated Approach to Technology Investing
3 An Integrated Approach to Technology Investing Deep origination and execution expertise Ability to leverage existing portfolio knowledge and understand a variety of transforming business models Global reach and unified team Build out of growth equity platform to be closer to sources of disruption
Slide 141: Over $6 Billion Invested Behind Enterprise Software
3 Over $6 Billion Invested Behind Enterprise Software Global Software Spend ($bn)(1) SaaS(3) Models Continue to Take Share() $530 47% % of Total Software Spend $495 44% $458 40% $424 $391 36% $352 32% $324 29% 25% 2016 2017 2018E 2019E 2020E 2021E 2022E Application Software Infrastructure Software 2
Slide 142: Over $4 Billion Invested Behind Consumer Internet
3 Over $4 Billion Invested Behind Consumer Internet People are Spending More Time Online(1) Global Internet Access Continues to Grow(2) Time Spent Online (Hours/Days) 50% 6.0 40% 5.7 Penetration (%) 5.4 4.9 5.1 0.4 0.6 4.4 0.4 3.7 0.3 0.3 30% 0.3 2.2 2.1 2.2 2.2 0.3 2.3 2.5 20% 2.6 2.8 3.1 3.3 2.3 2
Slide 143: Private Equity – Digital / Tech Presence
3 Private Equity – Digital / Tech Presence Americas Europe Asia Core 2018 to 2020 46% Deployment 38% 34% Behind Digital / 26% Technology Themes Note: Percentages represent deployment by respective strategy focused on digital / technology themes as determined to qualify by KKR as a percentage of tota
Slide 144: Real Assets – Digital / Tech Presence
3 Real Assets – Digital / Tech Presence Real Estate Equity Infrastructure 2018 to 2020 49% Deployment Behind Digital / 25% Technology Themes • Industrial and logistics assets • Telecom infrastructure / wireless towers • E-commerce Key Themes penetration • Fiber to the home • Technology innovation hu
Slide 145: Unique Differentiators
Unique Differentiators 1. 1 Global Atlantic 2. 2 Our Asia Franchise 1. 3 Winning In Technology 4 ESG – Building on our Strong Capabilities 2. 5 Our Brand, Track Record and Opportunity with Individual Investors 1. 6 Our People & Culture 2. 145
Slide 146: A Top-Down, Theme Based Approach
4 A Top-Down, Theme Based Approach E-Commerce & Digitalization Rise of the Savings & Tax Global Deferral Millennial Health & ESG Macro Themes Wellness Personal Nesting Safety Resiliency & Preparedness 146
Slide 147: ESG Management Is In Our DNA
4 ESG Management Is In Our DNA KKR believes that managing ESG issues in our investments can help generate strong returns for our investors while also having a positive impact on society 2008 2009 Launched Green Became signatory to the United 2010 2011 2012 Portfolio Program Nations-backed Principles
Slide 148: Over $7 Billion Invested Behind ESG Themes
4 Over $7 Billion Invested Behind ESG Themes Industrial & Environmental Next Generation Energy Infrastructure Solutions Management Responsible Production Learning Resources & Financial Inclusion & Consumption Workforce Development Note: Represents investments from January 1, 2008 to December 31, 202
Slide 149: Our Employee Engagement Model
4 Our Employee Engagement Model Employee Engagement in Action Since 2011, KKR’s U.S. Industrials private equity We believe broad-based team has focused on employee engagement as a key engagement & alignment driver in building stronger companies. The can drive breakthrough centerpiece of the strategy
Slide 150: Unique Differentiators
Unique Differentiators 1. 1 Global Atlantic 2. 2 Our Asia Franchise 1. 3 Winning In Technology 4 ESG – Building on our Strong Capabilities 2. 5 Our Brand, Track Record and Opportunity with Individual Investors 1. 6 Our People & Culture 2. 150
Slide 151: The Largest Markets Remain Underpenetrated
5 The Largest Markets Remain Underpenetrated Total Client Assets in the Market Percentage of Assets in Alternatives ($ in trillions) Pension Funds Insurance Sovereign Wealth Funds Individual Investors 52% $345 64% $279 $215 30% $175 $160 $121 <5% 2004 2007 2012 2016 2020E 2025E Pension Endowment Ind
Slide 152: Unique Differentiators
Unique Differentiators 1. 1 Global Atlantic 2. 2 Our Asia Franchise 1. 3 Winning In Technology 4 ESG – Building on our Strong Capabilities 2. 5 Our Brand, Track Record and Opportunity with Individual Investors 1. 6 Our People & Culture 2. 152
Slide 153: KKR’s Culture and Values
6 KKR’s Culture and Values Teamwork Diversity Integrity Accountability One Firm Relationship-Driven Innovation Excellence 153
Slide 154: KKR’s Culture and Values Drive Outcomes
6 KKR’s Culture and Values Drive Outcomes Teamwork Diversity Business Building One Integrity Innovation Firm Accountability Connect The Dots Relationship-Driven Best-in-Class Talent Innovation Excellence 154
Slide 155: Robert H. Lewin
Robert H. Lewin Chief Financial Officer
Slide 156: Financial Review Outline
Financial Review Outline 1 Financial Model • Fee Related Earnings • Realized Performance Earnings • Realized Investment Earnings • Insurance Operating Earnings • Distributable Earnings Opportunity 2 KKR Balance Sheet • Unique Attributes • Capitalizing on Our Model • BVPS Opportunity 156
Slide 157: Our Financial Model
1 OUR FINANCIAL MODEL 157
Slide 158: We Have Been Operating At A High Level
We Have Been Operating At A High Level Deployment Record deployment in 2020 Using Our Model Performance BVPS +20% in 2020 & Differentiated investment Acquisition of Global Atlantic performance across strategies Fundraising Monetizations Unrealized carry and Record fundraising embedded balance sheet
Slide 159: The Financial Model – Earnings Streams
The Financial Model – Earnings Streams Compensation Fee Related 1 Fee Related Revenues Earnings Occupancy & Other Operating Expenses Realized Realized 2 Performance Income Compensation Performance Earnings Realized Realized 3 Investment Income Compensation Investment Earnings KKR’s Pro Rata 4 Insura
Slide 160: Fee Related Revenue
1 Fee Related Revenue ($ in millions) Attributes $2,314 Management Fees $2,114 $200 • Long-term, committed FPAUM leads to predictable management fee revenue $152 $152 $1,866 Capital Markets Fees $154 $480 $480 Additional Fees • Monitoring and Transaction Fees, $410 net of Fee Credits Fee Related Per
Slide 161: Fee Related Revenue – Growth Drivers
1 Fee Related Revenue – Growth Drivers ($ in millions) Growth Drivers $2,114 + Increasing Fee Paying AUM $152 $1,866 + Scaling new businesses and $154 $480 expanding perpetual capital base $410 + Management fees from Global Atlantic + Transaction activity $1,442 $1,249 + $20 billion in capital commi
Slide 162: Management Fees – Long Term Visibility & Stability
1 Management Fees – Long Term Visibility & Stability Long Duration of Capital Translates To Management Fee Visibility Multi-Decade Strategic 8+ Year Duration Capital Subject to Perpetual Capital Investor Partnerships at Inception Periodic Redemption Assets Under Management 14% 34% 42% 10% 44% of AUM
Slide 163: Perpetual Capital Drives Stability and Growth
1 Perpetual Capital Drives Stability and Growth (AUM, $ in billions) BDCs Additional Vehicles (Credit, Real Estate, Infrastructure, Energy) Global Atlantic $120 $98 $7 $6 $16 $4 July 2018 Investor Day April 2021 Investor Day Perpetual capital now 34% of AUM and 42% of FPAUM 163
Slide 164: Powerful Management Fee Profile as Businesses Scale…
1 Powerful Management Fee Profile as Businesses Scale… Annual Management Fees By Strategy Core Private Equity Growth Equity Real Estate Infrastructure Alternative Credit Leveraged Credit Traditional PE 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Note: 2018-2020 reflect recast reporting. S
Slide 165: …With An Expected Acceleration
1 …With An Expected Acceleration Annual Management Fees By Strategy Core Private Equity Growth Equity Real Estate Infrastructure Alternative Credit Leveraged Credit Traditional PE 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E 2022E Note: 2018-2020 reflect recast reporting. See Appendi
Slide 166: A Differentiated Capital Markets Franchise
1 A Differentiated Capital Markets Franchise Capital Markets Transaction Fees Avenues for Growth ($ in millions) Average $631 Real Assets $490 $480 $440 Core Private $410 Equity Structured $218 Finance $191 $182 $171 $172 $129 $143 $105 $66 $34 Asia $18 $1 2007 2008 2009 2010 2011 2012 2013 2014 201
Slide 167: Fee Related Expenses
1 Fee Related Expenses We Have Two Forms of Expenses Allocated to Fee Revenues Compensation Other Operating Expenses ($ in millions) Margin (% of Fee Revenues) $354 $347 $333 18% 19% 16% 20-25% of Fee Revenues 2018 2019 2020 Given expected investments in areas like technology and distribution, we ex
Slide 168: High Visibility Into Powerful Step-Up in FRE
1 High Visibility Into Powerful Step-Up in FRE Recent Fundraising changes to Investment pipeline Capital compensation Adviser to growth and Markets framework and Global Atlantic visibility increased transparency $2+ FRE per share in 2022 Note: Per share represents per adjusted share. Our expectation
Slide 169: Realized Performance Income
2 Realized Performance Income ($ in millions) Attributes $2,237 • Our share of realized gains from third party capital we manage • 60-70% compensation margin, exclusively success-based $1,071 Carried Interest • Directly tied to realization activity in funds in position to pay carry $1,166 $1,083 Inc
Slide 170: Realized Performance Income – Growth Drivers
2 Realized Performance Income – Growth Drivers ($ in millions) Growth Drivers + Managing over 2x more carry eligible AUM than $1,166 5 years ago $1,083 $123 + Investment performance of funds + Realization activity of funds and strategies $1,071 $1,042 + Opportunity to realize over $4 billion of gros
Slide 171: Carry Eligible AUM Has Grown, Driving Deployment
2 Carry Eligible AUM Has Grown, Driving Deployment ($ in billions) Carry Eligible AUM Deployment $180 $40 $164 $135 $30 $119 $120 $114 $86 $20 $77 $60 $10 $0 $- 2015 2016 2017 2018 2019 2020 Note: Does not include incentive fee eligible AUM. 171
Slide 172: Realized Investment Income
3 Realized Investment Income ($ in millions) Attributes $2,335 • 100% of gains / losses on balance sheet investments • Directly tied to realization activity (interest, dividends, realized gains) • 10-20% compensation margin Net Realized Gains $1,691 Interest Income and Dividends Net Unrealized Gains
Slide 173: Realized Investment Income – Growth Drivers
3 Realized Investment Income – Growth Drivers ($ in millions) Growth Drivers $686 $645 + Rotation from a historical compounder of gains to realizing a greater share of those gains $496 $360 + Continued investment performance + Retained earnings drive additional deployment opportunities $285 + Oppo
Slide 174: Well-Positioned to Realize Performance and Investment Income
3 Well-Positioned to Realize Performance and Investment Income Large Future Carried Interest Potential Large Future Investment Income Potential ($ in millions, unless otherwise noted) ($ in millions, unless otherwise noted) Realized Carried Interest Realized Investment Income Gross Unrealized Carrie
Slide 175: The Financial Model – Earnings Streams
4 The Financial Model – Earnings Streams Compensation Fee Related Fee Related Revenues Earnings Occupancy & Other Operating Expenses Realized Realized Performance Compensation Performance Income Earnings Realized Realized Investment Compensation Investment Income Earnings KKR’s Pro Rata Insurance Ow
Slide 176: Global Atlantic 2020 Segment Adjusted Operating Earnings
4 Global Atlantic 2020 Segment Adjusted Operating Earnings ($ in thousands) 2020 Net Investment Income $3,099 Net Cost of Insurance (2,030) General, Administrative and Other (443) Income (loss) attributable to NCI (244) Segment Adjusted Operating Earnings $382 Note: Global Atlantic’s 2020 Segment Ad
Slide 177: We Expect Significant Acceleration of After-tax DE
We Expect Significant Acceleration of After-tax DE Fee Related Earnings $2+ FRE per share in 2022 Latent Earnings $9.1 billion total unrealized gains (carry + balance sheet) Global Atlantic $98 billion perpetual capital After-tax $4-5 per share Distributable Earnings Expected annual After-tax DE in
Slide 178: Our Balance Sheet
2 OUR BALANCE SHEET 178
Slide 179: Book Value Per Adjusted Share Growth Has Accelerated
Book Value Per Adjusted Share Growth Has Accelerated Returned ~70% of earnings through Fixed distribution policy variable distribution policy ($2.95 per adjusted share paid in ($7.17 per adjusted share paid in dividends) distributions(1)) $23.09 $19.24 +17% CAGR $15.57 $14.20 $12.48 $12.18 $12.15 $1
Slide 180: Unique Attributes of Our Balance Sheet
Unique Attributes of Our Balance Sheet Access to best-in-class global investment teams No fixed costs allocated to balance sheet % Modest and success-based compensation margin of 10-20% $4.4 billion of embedded gains Access to long-dated, low-cost capital 180
Slide 181: How We Use The Balance Sheet – Capitalizing On Our Model
How We Use The Balance Sheet – Capitalizing On Our Model Share Repurchases Strategic M&A Capital Markets Opportunistic Investments KKR Funds and Strategies 181
Slide 182: Example 1: Strategic M&A – Global Atlantic
Example 1: Strategic M&A – Global Atlantic Diligence / Negotiation Equity Syndication Process S&P 500 $4,000 August 2020 Debt and mandatory convertible preferred issuances $3,500 February 1, 2021 Acquisition closes; ~60% stake for $3 billion $3,000 $2,500 July 7, 2020 KKR commits to all cash transac
Slide 183: Example 1: Strategic M&A – Global Atlantic
Example 1: Strategic M&A – Global Atlantic Implied Return On purchase price: 17% On KKR Equity: 43% ~$500+mm After-tax DE Contribution from Global Atlantic $1.15 billion Mandatory Preferred Equity Offering ~$3 billion Global Atlantic Purchase Price Note: Our expectation about the impact of Global At
Slide 184: Example 2: Core Private Equity – Launching New Businesses
Example 2: Core Private Equity – Launching New Businesses Capitalizes on lower-risk opportunities to compound capital over 10-15 years Our Playbook Alignment Leverage Global Capital Markets With LPs Sourcing Platform Activity $3.5 billion balance sheet Limited incremental costs to Significant Core-d
Slide 185: Example 3: Share Buybacks
Example 3: Share Buybacks Since 2015 we have used $1.5 billion to repurchase or retire 75 million shares at a weighed average cost of $20.36 per share Note: As of April 1, 2021. 185
Slide 186: Key Drivers of Future Book Value Per Share Growth
Key Drivers of Future Book Value Per Share Growth Performance of asset management business Balance sheet investment performance Global Atlantic All of which generates retained earnings that allows us to grow, reinvest and compound 186
Slide 187: Opportunity For Substantial Growth In Book Value
Opportunity For Substantial Growth In Book Value Book Value Implied per Share CAGR 5 years ~$45 14% 10 years ~$85 KKR BVPS CAGR since 2016 17% Note: Figures are for illustrative, informational purposes only and are not representative of any actual results. This information is not intended to forecas
Slide 188: Closing Remarks
Closing Remarks KKR
Slide 189: We Have Four Main Takeaways For You Today
WE HAVE FOUR MAIN TAKEAWAYS FOR YOU TODAY SCALING IS HAPPENING FASTER THAN EXPECTED AND OUR 1 FRE OPPORTUNITY IS SIGNIFICANT AND HIGHLY VISIBLE DIFFERENTIATED INVESTMENT PERFORMANCE + 2 SIGNIFICANT INVESTED CAPITAL = LATENT EARNINGS POWER THE GLOBAL ATLANTIC ACQUISITION 3 INCREASES OUR OPPORTUNITY S
Slide 190: Appendix
Appendix KKR
Slide 191: Recast Summary Financial Results
Recast Summary Financial Results ($ in millions, except per share amounts and unless otherwise stated) 2019 2020 Management Fees $1,249 $1,442 Transaction and Monitoring Fees, Net $564 $632 Fee Related Performance Revenues $53 $40 Fee Related Compensation ($432) ($486) Other Operating Expenses ($354
Slide 192: Insurance Segment Line Item Descriptions
Insurance Segment Line Item Descriptions Net Investment Income • Investment income earned on invested assets, net of investment-related expenses, including investment management fees paid to KKR. Net investment income does not include the impact of realized gains and losses from insurance asset / li
Slide 193: Reconciliation of KKR & Co. Inc. Stockholders’ Equity to Book Value per Adjusted Share
Reconciliation of KKR & Co. Inc. Stockholders’ Equity – Series I and II Preferred Stock, Common Stock (GAAP Basis) to Book Value per Adjusted Share As Of December 31, 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 KKR & Co. Inc. Stockholders' Equity – Series I and II $ 1,326,493 $ 1,328,698
Slide 194: Reconciliation of Net Income to After-tax Distributable Earnings
Reconciliation of Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders (GAAP Basis) to After-tax Distributable Earnings Twelve Months Ended December 31, 2019 2020 Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders (GAAP) $ 1,971,685 $ 1,945,954 Preferred Stock Divid
Slide 195: Important Information
Important Information This Appendix contains important information that an investor should carefully review and consider in connection with this presentation. Please also refer to the important information contained in the section entitled “Legal Disclosures” located at the beginning of this present
Slide 196: Important Information (cont’d.)
Important Information (cont’d.) Investments is a term used solely for purposes of financial presentation of a portion of KKR’s balance sheet and includes majority ownership of subsidiaries that operate KKR’s asset management and broker-dealer businesses, including the general partner interests of KK
Slide 197: Important Information (cont’d.)
Important Information (cont’d.) Forward Looking Statements This presentation contains certain forward-looking statements pertaining to KKR (including Global Atlantic), including investment funds, vehicles and accounts managed by KKR and the insurance companies managed by Global Atlantic. You can ide
Slide 198: Important Information (cont’d.)
Important Information (cont’d.) Estimates and Assumptions Target, goal, hypothetical or estimated results, projections and other comparable phrases and concepts are hypothetical in nature and are shown for illustrative, informational purposes only. Except as otherwise specifically stated, this infor
Slide 199: Important Information (cont’d.)
Important Information (cont’d.) Fees and Other Earnings from Global Atlantic The estimates and expectations about the fees earned by KKR from managing Global Atlantic’s investments and earnings received by KKR from its ownership of Global Atlantic in the future depend on many assumptions about futur