Kkr & Co. Inc. · NYSE:KKR
Kkr & — Q3 2023 Earnings Presentation
45 slides from Kkr &'s earnings presentation, Nov 7, 2023
Slide 1: KKR & Co. Inc. Reports Third Quarter 2023 Financial Results
KKR & Co. Inc. Reports Third Quarter 2023 Financial Results November 7, 2023
Slide 2: KKR Reports Third Quarter 2023 Financial Results
KKR Reports Third Quarter 2023 Financial Results New York, November 7, 2023 – KKR & Co. Inc. (NYSE: KKR) today reported its third quarter 2023 results. Conference Call A conference call to discuss KKR's financial results will be held on November 7, 2023 at 10:00 a.m. ET. The conference call may be a
Slide 3: Legal Disclosures
KKR Reports Third Quarter 2023 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. Third Quarter Earnings
KKR & Co. Inc. Third Quarter Earnings
Slide 5: Third Quarter 2023 GAAP Results (Unaudited)
Third Quarter 2023 GAAP Results (Unaudited) GAAP Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders was $1.5 billion for the quarter. GAAP Stockholders’ Equity Per Outstanding Share of Common Stock was $23.07 at quarter end. ($ in thousands, except per share data) 3Q'22 3Q'23 3Q'22
Slide 6: Third Quarter 2023 Highlights
Third Quarter 2023 Highlights • Fee Related Earnings (“FRE”) of $558 million ($0.63/adj. share) in the quarter, up 3% year-over-year • FRE was $2.3 billion in the LTM ($2.55/adj. share), up 2% year-over-year Financial Measures • After-tax Distributable Earnings (“DE”) of $780 million ($0.88/adj. sha
Slide 7: Third Quarter 2023 Segment Earnings
Third Quarter 2023 Segment Earnings ($ in thousands, except per share data) 3Q'22 3Q'23 3Q'22 YTD 3Q'23 YTD Management Fees $ 670,534 $ 758,700 $ 1,950,389 $ 2,245,744 Transaction and Monitoring Fees, Net 167,455 124,014 580,794 456,421 Fee Related Performance Revenues 49,924 20,436 71,974 70,529 Fe
Slide 8: Management Fees and Fee Related Earnings
Management Fees and Fee Related Earnings Management Fees Fee Related Earnings Per Adjusted Share ($ in millions) • Increased by 16% to $3.0 billion in the LTM • Increased 2% year-over-year. The growth in • Growth has been driven by an increase in Fee Paying management fees was partially offset by a
Slide 9: Assets Under Management
Assets Under Management • AUM of $528 billion, up 6% year-over-year, with $14 billion of organic new capital raised in the quarter and $54 billion in the LTM • Fee Paying AUM of $424 billion, up 7% year-over-year, with $12 billion of organic new capital raised in the quarter and $58 billion in the L
Slide 10: Additional Capital Detail
Additional Capital Detail • Dry Powder: Uncalled commitments of $99 billion remain diversified across the firm’s investment strategies • AUM Not Yet Paying Fees: At quarter end, there was $38 billion of committed capital with a weighted average management fee rate of approximately 90 bps that become
Slide 11: Fund Investment Performance
Fund Investment Performance Gross unrealized carried interest totals $5.6 billion as of September 30, 2023 Gross Return 3Q'23 LTM Private Equity Traditional Private Equity Portfolio 5% 12% Real Assets Opportunistic Real Estate Portfolio 1% -9% Infrastructure Portfolio 3% 14% Credit Leveraged Credit
Slide 12: Segment Detail
Segment Detail
Slide 13: Asset Management Segment − Private Equity
Asset Management Segment − Private Equity • AUM: Increased 2% quarter-over-quarter and increased 5% year-over-year to $174 billion with organic new capital raised of $2 billion in the quarter and $4 billion YTD • Following quarter end, both Next Generation Technology III and Global Impact II held fi
Slide 14: Asset Management Segment − Real Assets
Asset Management Segment − Real Assets • AUM: Increased 3% quarter-over-quarter and 6% year-over-year to $125 billion with organic new capital raised of $4 billion in the quarter and $10 billion YTD • Realizations: Carried Interest in 3Q driven primarily by monetization activity in our opportunistic
Slide 15: Asset Management Segment − Credit and Liquid Strategies
Asset Management Segment − Credit and Liquid Strategies • AUM: Increased 1% quarter-over-quarter and 8% year-over-year to $229 billion with organic new capital raised of $8 billion in the quarter and $24 billion YTD • New capital raised in the quarter driven by direct lending and asset-based finance
Slide 16: Capital Markets and Principal Activities
Asset Management Segment − Capital Markets • Transaction Fees: Totaled $100 million in the quarter and $353 million YTD • Approximately 70% of transaction fees were originated in North America in the quarter • Traditional Private Equity and Infrastructure collectively contributed over 50% of transac
Slide 17: Insurance Segment
Insurance Segment • Net Investment Income: Net Investment Income of $1,356 million in the quarter, reflecting higher yields and more normalized liquidity balances • 3Q'22 Net Investment Income included $28 million of variable investment income, while there was none in 3Q'23 • Net Cost of Insurance:
Slide 18: Book Value
Book Value • Book Value Per Adjusted Share: Increased 10% year-over-year to $29.68 • Net Cash and Total Investments of $22.02 per adjusted share at 3Q'23, compared to $20.41 at 3Q'22 • Total Cash and Investments: $28 billion at quarter end • Global Atlantic Book Value: Reflects our ~63% economic own
Slide 19: Investments Detail
Investments Detail ($ in millions) 3Q'23 Investment Holdings by Asset Class Investments Fair Value Other Alternative 7% Core Private Equity $ 6,483 Credit 5% Traditional Private Equity 3,887 Core Private Leveraged Credit Equity Growth Equity 1,077 6% 34% Private Equity Total 11,447 Real Estate 1,782
Slide 20: Capital Detail
Capital Detail
Slide 21: Duration of Capital
Duration of Capital Growth in Strategic & Perpetual Capital Assets Under Management ($ in billions) $266 51% of AUM is perpetual capital or long-dated strategic $244 investor partnerships $62 $57 8% 39% 41% $204 $186 12% 92% of AUM is perpetual capital or has a duration of at least 8 years at incept
Slide 22: Assets Under Management Rollforward
Assets Under Management Rollforward Three Months Ended September 30, 2023 ($ in millions) Private Equity Real Assets Credit and Liquid Strategies Total Beginning Balance $ 170,139 $ 121,616 $ 226,768 $ 518,523 New Capital Raised 1,854 4,107 7,668 13,629 Distributions and Other (3,061) (2,026) (5,830
Slide 23: Fee Paying Assets Under Management Rollforward
Fee Paying Assets Under Management Rollforward Three Months Ended September 30, 2023 ($ in millions) Private Equity Real Assets Credit and Liquid Strategies Total Beginning Balance $ 103,730 $ 106,118 $ 210,146 $ 419,994 New Capital Raised 1,926 4,091 6,179 12,196 Distributions and Other (970) (1,86
Slide 24: Supplemental Information
Supplemental Information
Slide 25: Investment Vehicle Summary
Investment Vehicle Summary Investment Period Amount ($ in millions) Percentage Start End Uncalled Committed Remaining Remaining Commitment Invested Realized Date Date Commitments by General Cost Fair Value Partner PRIVATE EQUITY BUSINESS LINE North America Fund XIII 8/2021 8/2027 $ 18,400 $ 10,570 3
Slide 26: Investment Vehicle Summary (cont'd)
Investment Vehicle Summary (cont’d) Investment Period Amount ($ in millions) Percentage Start End Uncalled Committed Remaining Remaining Commitment Invested Realized Date Date Commitments by General Cost Fair Value Partner REAL ASSETS BUSINESS LINE Energy Income and Growth Fund II 8/2018 8/2022 $ 99
Slide 27: Investment Vehicle Summary (cont'd) & Additional AUM Detail
Investment Vehicle Summary (cont’d) & Additional AUM Detail Investment Period Amount ($ in millions) Percentage Start End Uncalled Committed Remaining Remaining Commitment Invested Realized Date Date Commitments by General Cost Fair Value Partner CREDIT AND LIQUID STRATEGIES BUSINESS LINE(1) Opportu
Slide 28: Stock Summary
Stock Summary From December 31, 2022 through November 3, 2023, KKR used a total of $306 million to repurchase 5.4 million shares in the open market and to retire equity awards representing 0.8 million shares that otherwise would have been issued to participants under KKR's equity incentive plans. Du
Slide 29: Investments Detail – Core Private Equity
Investments Detail – Core Private Equity Growth in Balance Sheet Fair Value Background on Core Private Equity ($ in billions) • Core Private Equity is a long duration investment strategy Embedded Gains with a more modest risk return profile compared to Cost traditional PE; we are seeking mid-to-high
Slide 30: Dividends & Other Corporate Information
Dividends & Other Corporate Information Dividends The declaration and payment of any future dividends on common stock will be subject to the discretion of the board of directors of KKR & Co. Inc. based on a number of factors, including KKR’s future financial performance and other considerations that
Slide 31: Appendix
Appendix
Slide 32: GAAP Condensed Consolidated Income Statement (Unaudited)
GAAP Condensed Consolidated Income Statement (Unaudited) ($ in thousands) 3Q'22 3Q'23 3Q'22 YTD 3Q'23 YTD Revenues Asset Management Fees and Other $ 673,929 $ 655,367 $ 2,069,704 $ 2,086,830 Capital Allocation-Based Income (Loss) (572,863) 1,009,645 (2,442,080) 2,155,560 101,066 1,665,012 (372,376)
Slide 33: GAAP Condensed Consolidated Balance Statement (Unaudited)
GAAP Condensed Consolidated Balance Statement (Unaudited) ($ in thousands) 4Q'22 3Q'23 Assets Asset Management Cash and Cash Equivalents $ 6,705,325 $ 6,977,836 Investments 92,375,463 103,801,213 Other Assets 7,114,360 6,770,909 106,195,148 117,549,958 Insurance Cash and Cash Equivalents 6,118,231 4
Slide 34: Reconciliation of GAAP to Non-GAAP Shares (Unaudited)
Reconciliation of GAAP to Non-GAAP Shares (Unaudited) 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 GAAP Shares of Common Stock Outstanding 859,833,444 861,110,478 861,104,000 857,987,641 884,585,205 Adjustments: Exchangeable Securities and Other 29,288,380 29,517,712 29,517,712 30,804,276 3,909,477 Adjusted Shares
Slide 35: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) ($ in thousands) 3Q'22 3Q'23 3Q'22 YTD 3Q'23 YTD 3Q'22 LTM 3Q'23 LTM Net Income (Loss) - KKR Common Stockholders $ 32,637 $ 1,472,878 $ (711,774) $ 2,640,085 $ (189,141) $ 2,761,195 Preferred Stock Dividends 17,250 17,248 51,750 51,747 69,000 6
Slide 36: Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (cont'd)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (cont’d) ($ in thousands) 3Q'22 3Q'23 3Q'22 YTD 3Q'23 YTD Fee Related Earnings $ 541,763 $ 557,525 $ 1,607,920 $ 1,708,412 Insurance Segment Operating Earnings 168,835 210,027 493,397 585,363 Realized Performance Income 497,860 329,266 1,837,92
Slide 37: Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (cont'd)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (cont’d) ($ in thousands, except share and per share amounts) 4Q'18 4Q'19 4Q'20 4Q'21 4Q'22 3Q'22 3Q'23 KKR & Co. Inc. Stockholders' Equity - Common Stock $ 8,167,056 $ 10,324,936 $ 12,118,472 $ 16,542,643 $ 17,691,975 $ 17,495,190 $ 20,407,773
Slide 38: Third Quarter 2023 Segment Earnings – Detailed View
Third Quarter 2023 Segment Earnings – Detailed View ($ in thousands) 3Q'22 3Q'23 3Q'22 YTD 3Q'23 YTD Management Fees $ 670,534 $ 758,700 $ 1,950,389 $ 2,245,744 Transaction and Monitoring Fees, Net 167,455 124,014 580,794 456,421 Fee Related Performance Revenues 49,924 20,436 71,974 70,529 Fee Relat
Slide 39: Important Information − Endnotes
Important Information − Endnotes Note to All Pages • Infrastructure Portfolio refers to the portfolio of investments held by KKR’s flagship core plus infrastructure equity funds. This portfolio does not include investments from KKR’s • All figures in this presentation are as of September 30, 2023, u
Slide 40: Important Information − Endnotes (cont'd)
Important Information − Endnotes (cont’d) Notes to Page 15 – Investments Detail Notes to Page 19 – Fee Paying Assets Under Management Rollforward • Investments is a term used solely for purposes of financial presentation of a portion of • For the three months ended September 30, 2023, Distributions
Slide 41: Important Information − Non-GAAP and Other Measures
Important Information − Non-GAAP and Other Measures Non-GAAP and Segment Measures Income taxes on Insurance Segment Operating Earnings represent the total current and deferred tax expense or benefit on income before taxes adjusted to eliminate the The key non-GAAP and other operating and performance
Slide 42: 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) Insurance Segment Operating Earnings includes (i) realized gains and losses not related to asset/liability matching investments strategies and (ii) the investment management • Distributable Operating
Slide 43: Important Information − Non-GAAP and Other Measures (cont'd)
Important Information − Non-GAAP and Other Measures (cont’d) Other Terms and Capital Metrics Capital invested includes investments made using investment financing arrangements like credit facilities, as applicable. Capital invested excludes (i) investments in certain • Adjusted shares represents sha
Slide 44: Important Information − Other Legal Disclosures
Important Information − Other Legal Disclosures Website The performance information relating to KKR’s historical investments is not intended to be indicative of any fund’s or strategy’s future results or the future results of KKR. Certain funds From time to time, KKR may use its website as a channel
Slide 45: Important Information − Other Legal Disclosures (cont'd)
Important Information − Other Legal Disclosures (cont’d) Forward Looking Statements The following factors, among others, could cause actual results to vary from the forward- looking statements: failure to realize the anticipated benefits within the expected This presentation contains certain forward