Kkr & Co. Inc. · NYSE:KKR
Kkr & — Q2 2024 Earnings Presentation
47 slides from Kkr &'s earnings presentation, Jul 31, 2024
Slide 1: KKR & Co. Inc. Reports Second Quarter 2024 Financial Results
KKR & Co. Inc. Reports Second Quarter 2024 Financial February 7,Results 2023 July 31, 2024
Slide 2: KKR Reports Second Quarter 2024 Financial Results
KKR Reports Second Quarter 2024 Financial Results New York, July 31, 2024 – KKR & Co. Inc. (NYSE: KKR) today reported its second quarter 2024 results. Conference Call A conference call to discuss KKR's financial results will be held on July 31, 2024 at 10:00 a.m. ET. The conference call may be acces
Slide 3: Legal Disclosures
KKR Reports Second Quarter 2024 Financial Results 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
Slide 4: KKR & Co. Inc. Second Quarter Earnings
KKR & Co. Inc. Second Quarter Earnings
Slide 5: Second Quarter 2024 GAAP Results (Unaudited)
Second Quarter 2024 GAAP Results (Unaudited) GAAP Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders was $0.7 billion for the quarter and $1.4 billion YTD. ($ in thousands, except per share data) 2Q'23 2Q'24 2Q'23 YTD 2Q'24 YTD Revenues Asset Management and Strategic Holdings $ 1,4
Slide 6: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights • Fee Related Earnings (“FRE”) of $755 million ($0.84/adj. share) in the quarter, up 25% year-over-year • FRE was $2.7 billion in the LTM ($2.98/adj. share), up 18% year-over-year • Total Operating Earnings ("TOE") of $1.0 billion ($1.17/adj. share) in the quarter, up
Slide 7: Second Quarter 2024 Segment Earnings
Second Quarter 2024 Segment Earnings ($ in thousands, except per share data) 2Q'23 2Q'24 2Q'23 YTD 2Q'24 YTD Management Fees $ 748,888 $ 847,307 $ 1,487,044 $ 1,662,634 Transaction and Monitoring Fees, Net 190,228 222,858 332,407 374,942 Fee Related Performance Revenues 28,352 37,145 50,093 56,246 F
Slide 8: Total Operating Earnings
Total Operating Earnings • Total Operating Earnings ("TOE") - the sum of Fee Related Earnings, Insurance Operating Earnings and Strategic Holdings Operating Earnings - represents the more recurring portion of KKR's pre-tax earnings. Over time we expect TOE to approximate 70% of Total Segment Earning
Slide 9: Asset Management Segment Detail
Asset Management Segment Detail
Slide 10: Asset Management Segment
Asset Management Segment ($ in thousands, except per share data) 2Q'23 2Q'24 2Q'23 YTD 2Q'24 YTD Management Fees $ 748,888 $ 847,307 $ 1,487,044 $ 1,662,634 Transaction and Monitoring Fees, Net 190,228 222,858 332,407 374,942 Fee Related Performance Revenues 28,352 37,145 50,093 56,246 Fee Related C
Slide 11: Management Fees and Fee Related Earnings
Management Fees and Fee Related Earnings Management Fees Fee Related Earnings Per Adjusted Share ($ in millions) • Increased by 12% to $3.2 billion in the LTM • Increased 18% year-over-year driven primarily by the • Growth has been driven by an increase in Fee Paying growth in management fees and ca
Slide 12: Assets Under Management
Assets Under Management • AUM of $601 billion, up 16% year-over-year, with $32 billion of organic new capital raised in the quarter and $108 billion in the LTM • Fee Paying AUM of $487 billion, up 16% year-over-year, with $29 billion of organic new capital raised in the quarter and $109 billion in t
Slide 13: Additional Capital Detail
Additional Capital Detail • Dry Powder: Uncalled commitments of $108 billion remain diversified across the firm’s investment strategies • AUM Not Yet Paying Fees: At quarter end, there was $53 billion of committed capital with a weighted average management fee rate of approximately 95 bps that becom
Slide 14: Fund Investment Performance
Fund Investment Performance Gross unrealized carried interest totals $7.1 billion as of June 30, 2024 Gross Return 2Q'24 LTM Private Equity Traditional Private Equity Portfolio 4% 18% Real Assets Infrastructure Portfolio 3% 17% Opportunistic Real Estate Portfolio 1% 3% Credit Leveraged Credit Compos
Slide 15: Asset Management Segment − Private Equity
Asset Management Segment − Private Equity • AUM: Increased 1% quarter-over-quarter and increased 9% year-over-year to $185 billion with organic new capital raised of $2 billion in the quarter and $6 billion YTD • New capital raised in the quarter was primarily driven by K-Series PE, private equity v
Slide 16: Asset Management Segment − Real Assets
Asset Management Segment − Real Assets • AUM: Increased 12% quarter-over-quarter and 25% year-over-year to $152 billion with organic new capital raised of $18 billion in the quarter and $24 billion YTD • $24 billion of new capital raised in 1H'24 compares to $5 billion in 1H'23 • New capital raised
Slide 17: Asset Management Segment − Credit and Liquid Strategies
Asset Management Segment − Credit and Liquid Strategies • AUM: Increased 2% quarter-over-quarter and 17% year-over-year to $265 billion with organic new capital raised of $12 billion in the quarter and $33 billion YTD • $33 billion of new capital raised in 1H'24 compares to $17 billion in 1H'23 • Ne
Slide 18: Asset Management Segment − Capital Markets and Principal Activities
Asset Management Segment − Capital Markets • Transaction Fees: Totaled $192 million in the quarter and $308 million YTD • Approximately two-thirds of transaction fees were originated in North America in the quarter • Traditional private equity generated approximately one third of total fees in the q
Slide 19: Insurance Segment Detail
Ins urance Segment Detail
Slide 20: Insurance Segment
Insurance Segment • Net Investment Income: Net Investment Income of $1.5 billion in the quarter reflects growth in the investment portfolio attributable to strong net inflows. Investment portfolio yields in the quarter reflect higher levels of cash alongside more liquid investments yet to be rotated
Slide 21: Strategic Holdings Segment Detail
Strategic Holdings Segment Detail
Slide 22: Strategic Holdings Segment
Strategic Holdings Segment • Strategic Holdings Segment Earnings: Driven by dividends from our Core PE businesses • Highlights: • Expect Strategic Holdings Operating Earnings will be modest in 2024, $300+ million by 2026, $600+ million by 2028 and $1+ billion by 2030 • KKR's share of the businesses'
Slide 23: Supplemental Information
Supplemental Information
Slide 24: Duration of Capital
Duration of Capital Growth in Strategic & Perpetual Capital Assets Under Management ($ in billions) $315 53% of AUM is perpetual capital or long-dated strategic investor partnerships $65 $262 7% $62 42% 40% $250 $200 11% 93% of AUM is perpetual capital or has a duration of at least 8 years at incept
Slide 25: Assets Under Management Rollforward
Assets Under Management Rollforward Three Months Ended June 30, 2024 ($ in millions) Private Equity Real Assets Credit and Liquid Strategies Total Beginning Balance $ 182,766 $ 135,362 $ 259,505 $ 577,633 New C apital R ais ed 2,071 18,023 12,338 32,432 D is tributions and O ther (3,396) (2,223) (8,
Slide 26: Fee Paying Assets Under Management Rollforward
Fee Paying Assets Under Management Rollforward Three Months Ended June 30, 2024 ($ in millions) Private Equity Real Assets Credit and Liquid Strategies Total Beginning Balance $ 116,287 $ 115,649 $ 238,667 $ 470,603 New C apital R ais ed 2,442 15,272 11,471 29,185 D is tributions and O ther (585) (3
Slide 27: Investment Vehicle Summary
Investment Vehicle Summary Investment Period Amount ($ in millions) Start End Uncalled Remaining Remaining Commitment Invested Realized Date Date Commitments Cost Fair Value PRIVATE EQUITY BUSINESS LINE North America Fund XIII 8/2021 8/2027 $ 18,400 $ 8,200 $ 10,199 $ 12 $ 9,947 $ 12,276 Americas Fu
Slide 28: Investment Vehicle Summary (cont'd)
Investment Vehicle Summary (cont’d) Investment Period Amount ($ in millions) Start End Uncalled Remaining Remaining Commitment Invested Realized Date Date Commitments Cost Fair Value REAL ASSETS BUSINESS LINE Global Infrastructure Investors V 7/2024 7/2030 $ 8,290 $ 8,290 $ — $ — $ — $ — Global Infr
Slide 29: Investment Vehicle Summary (cont'd) & Additional AUM Detail
Investment Vehicle Summary (cont’d) & Additional AUM Detail Investment Period Amount ($ in millions) Start End Uncalled Remaining Remaining Commitment Invested Realized Date Date Commitments Cost Fair Value CREDIT AND LIQUID STRATEGIES BUSINESS LINE(1) Opportunities Fund II 11/2021 1/2026 $ 2,344 $
Slide 30: Net Cash & Investments Highlights
Net Cash & Investments Highlights • Represents Asset Management Segment investments, corporate cash, short-term investments and debt. Investments presented here excludes the Insurance and Strategic Holdings Segments • Cash and Investments total $15.5 billion at 2Q'24 • Embedded Gains total $2.8 bill
Slide 31: Stock Summary
Stock Summary From December 31, 2023 through July 26, 2024, KKR used a total of $93 million to retire equity awards representing 0.9 million shares that otherwise would have been issued to participants under KKR's equity incentive plans. During this period, retirements were made at an average cost o
Slide 32: Dividends & Other Corporate Information
Dividends & Other Corporate Information Dividends A dividend of $0.175 per share of common stock of KKR & Co. Inc. has been declared for the second quarter of 2024, which will be paid on August 27, 2024 to holders of record of common stock as of the close of business on August 12, 2024. The declarat
Slide 33: Appendix
Appendix
Slide 34: GAAP Condensed Consolidated Income Statement (Unaudited)
GAAP Condensed Consolidated Income Statement (Unaudited) ($ in thousands) 2Q'23 2Q'24 2Q'23 YTD 2Q'24 YTD Revenues Asset Management and Strategic Holdings Fees and Other $ 754,447 $ 822,324 $ 1,431,463 $ 1,515,850 Capital Allocation-Based Income (Loss) 696,897 738,125 1,145,915 2,001,067 1,451,344 1
Slide 35: GAAP Condensed Consolidated Balance Statement (Unaudited)
GAAP Condensed Consolidated Balance Statement (Unaudited) ($ in thousands) 4Q'23 2Q'24 Assets Asset Management and Strategic Holdings Cash and Cash Equivalents $ 8,393,892 $ 7,829,321 Investments 98,634,801 102,046,987 Other Assets 6,538,674 6,865,896 113,567,367 116,742,204 Insurance Cash and Cash
Slide 36: Reconciliation of GAAP to Non-GAAP Shares (Unaudited)
Reconciliation of GAAP to Non-GAAP Shares (Unaudited) 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 GAAP Shares of Common Stock Outstanding 857,987,641 884,585,205 885,005,588 885,010,967 887,439,098 Adjustments: Exchangeable Securities and Other 30,804,276 3,909,477 4,463,644 5,768,290 7,005,071 Adjusted Shares 88
Slide 37: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) ($ in thousands) 2Q'23 2Q'24 2Q'23 YTD 2Q'24 YTD 2Q'23 LTM 2Q'24 LTM Net Income (L os s ) - K K R C ommon S tockholders $ 844,463 $ 667,926 $ 1,167,207 $ 1,350,140 $ 1,320,954 $ 3,863,447 Preferred Stock Dividends 17,249 — 34,499 — 68,999 17,24
Slide 38: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) ($ in thousands) 2Q'23 2Q'24 2Q'23 YTD 2Q'24 YTD Total Operating Earnings $ 772,533 $ 1,049,462 $ 1,526,223 $ 2,011,763 Total Investing Earnings 153,088 240,603 379,597 433,143 Depreciation and Amortization 11,051 12,549 21,485 25,052 Adjusted
Slide 39: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) ($ in thousands) 2Q'24 KKR & Co. Inc. Stockholders' Equity - Common Stock - GAAP $ 21,673,103 Asset Management and Strategic Holdings Net Assets and Other(1) (19,978,651) (2) Accumulated Other Comprehensive Income and Other (Insurance) 6,622,83
Slide 40: Important Information − Endnotes
Important Information − Endnotes Note to All Pages • The leveraged credit composite refers to the composite of certain investment portfolios made in KKR’s collateralized loan obligations and U.S. and European leveraged credit • All figures in this presentation are as of June 30, 2024, unless otherwi
Slide 41: Important Information − Endnotes (cont'd)
Important Information − Endnotes (cont’d) Notes to Page 18 – Strategic Holdings Segment • For the six months ended June 30, 2024, Distributions and Other includes net changes • The adjusted revenue and adjusted EBITDA information represents the measures in fee base of certain Real Assets funds of $2
Slide 42: Important Information − Non-GAAP and Other Measures
Important Information − Non-GAAP and Other Measures Non-GAAP and Segment Measures • Adjusted Net Income is a performance measure of KKR’s earnings, which is derived from KKR’s reported segment results. ANI is used to assess the performance of KKR’s The key non-GAAP and other operating and performanc
Slide 43: Important Information − Non-GAAP and Other Measures (cont'd)
Important Information − Non-GAAP and Other Measures (cont’d) Non-GAAP and Segment Measures (cont’d) at contract issuance on payout annuities. Insurance Operating Earnings includes (i) realized gains and losses not related to asset/liability matching investment strategies • Total Segment Earnings is
Slide 44: Important Information − Non-GAAP and Other Measures (cont'd)
Important Information − Non-GAAP and Other Measures (cont’d) Non-GAAP and Segment Measures (cont’d) ownership interest in such entities multiplied by such entity’s respective AUM. KKR's definition of AUM (i) is not based on any definition of AUM that may be set forth in the • Total Operating Earning
Slide 45: Important Information − Other Legal Disclosures
Important Information − Other Legal Disclosures Website Past Performance and Investment Returns From time to time, KKR may use its website as a channel of distribution of material company Past performance is not a guarantee of future results. Information about any fund or information. Financial and
Slide 46: Important Information − Other Legal Disclosures (cont'd)
Important Information − Other Legal Disclosures (cont’d) Forward Looking Statements Expected dividend amounts and investment returns in the new business segment Strategic Holdings may be materially less than our current expectations or not materialize at all, and This presentation contains certain f
Slide 47: Important Information − Other Legal Disclosures (cont'd)
Important Information − Other Legal Disclosures (cont’d) Forward Looking Statements (cont'd) successfully; Global Atlantic’s actual or perceived financial strength and ratings of Global Atlantic and its subsidiaries; business Global Atlantic reinsures and business it Without limiting the statements