Kkr & Co. Inc. · NYSE:KKR
Kkr & — Investor Presentation (June 2024)
50 slides from Kkr &'s investor presentation, Jun 4, 2024
Slide 1: KKR & Co. Inc. Overview Presentation
KKR & Co. Inc. Overview February 7,Presentation 2023 – 1Q’24 June 4, 2024
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: KKR Overview
KKR Overview Established in 1976, KKR is a global investment firm with industry-leading investment experience and a strong culture committed to teamwork $578 ~2,700 Multi- 25 KKR Global 48 Years billion KKR asset offices Atlantic in AUM employees experience across Credit & across 4 across Liquid Str
Slide 4: Scaled And Diversified Assets Under Management
Scaled And Diversified Assets Under Management Assets Under Management ($ in billions) $578 $578 $553 $27 Liquid Strategies $504 $102 Alternative Credit $471 $130 Leveraged Credit +18% CAGR $71 Real Estate $252 $218 $195 $65 Infrastructure & Energy $168 $53 Growth Equity & Core PE $130 $120 $100 $10
Slide 5: Positioned For Significant Growth Ahead
Positioned For Significant Growth Ahead Purpose-built business model with three High-growth growth engines to drive recurring earnings industry with Leveraging our leadership in key core strengths Asset Strategic markets Management Insurance Holdings ✓ Growing alternatives ✓ Differentiated ✓ Leading
Slide 6: Track Record Of Growth
Track Record Of Growth AUM FPAUM Perpetual Capital ($ in billions) ($ in billions) $578 $471 • 57% of FPAUM is perpetual +29% +33% CAGR capital or long-dated strategic CAGR investor partnerships $252 (vs. 20% in 4Q’20) $186 • 91% of FPAUM is perpetual capital or has a duration of at 4Q'20 1Q'24 4Q'2
Slide 7: Significant Capital Generation
Significant Capital Generation Our Capital Allocation Toolkit We expect Strategic M&A $25+ billion of capital generation over the next 5 years(1) Insurance Our objective for capital Core Private Equity allocation is to generate recurring and durable, growth- oriented earnings per share Share Buyback
Slide 8: Attractive Financial Targets
Attractive Financial Targets 2024 through 2026 Forecast New Capital Raised (Cumulative) $300+ billion 2026 Forecast Free Related Earnings per share Implies 2023-2026E CAGR of ~20% $4.50+ Total Operating Earnings per share Most recurring portion of KKR’s earnings $7.00+ Adjusted Net Income per share
Slide 9: Our Model
Our Model
Slide 10: Purpose-Built Business Model
Purpose-Built Business Model Asset Management Insurance Strategic Holdings Multiple paths to surpass $1 Strong conviction we can double Unconstrained TAM and growth ✔ ✔ ✔ trillion of AUM in the next 5 years Global Atlantic AUM potential Scaled and diversified Core Differentiated brand, capabilities
Slide 11: Our Opportunity Set Is Bigger Given Our Model
Our Opportunity Set Is Bigger Given Our Model ($ in trillions) Strategic Holdings: Unconstrained Dramatically Expanded Total Addressable Corporate Credit Including Investment Grade ABF and Structured Products: ~$40T Market $15 Core and Core+ Real Asset Strategies $10 Existing “Traditional” Alts: $15
Slide 12: KKR's Culture And Values Drive Outcomes
KKR’s Culture And Values Drive Outcomes Teamwork Diversity Best-in-class talent Integrity One P&L and compensation pool Accountability One Collaboration Firm Business building & innovation Relationship-Driven Allows us to maximize the impact of our model Innovation Excellence 12
Slide 13: Asset Management
Asset Management
Slide 14: Strong Investment Performance
Strong Investment Performance Gross IRR Inception-to-Date (“ITD”) as of March 31, 2024 Across Select Mature Funds Represents benchmark 29% 25% 25% 24% 23% 18% 17% 17% 15% 15% 16% 15% 15% 15% 16% 12% 12% 11% 10% 10% 8% 13% 8% 7% 7% 7% 6% 5% 5% 4% 3% 3% -8% -2% Americas XII PE Europe V PE Asia III PE
Slide 15: Differentiated Value Creation Toolkit
Differentiated Value Creation Toolkit CAPSTONE KKR ADVISORS KKR CAPITAL MARKETS GLOBAL MACRO KKR GLOBAL INSTITUTE ASSET ALLOCATION PUBLIC POLICY & GLOBAL CLIENT SUSTAINABILITY SOLUTIONS 15
Slide 16: Focus On Sustainability: Value Creation, Value Protection
Focus On Sustainability: Value Creation, Value Protection OUR FOCUS AREAS TO CREATE & PROTECT VALUE HOW WE INVEST GLOBAL AMBITIONS ESG Integration SELECT HIGHLIGHTS Support improved performance across our Integrating material ESG considerations into the control investments in these areas: 45BN+ inve
Slide 17: Increased Diversification Across Products And Geographies
Increased Diversification Across Products And Geographies… 2010 Today • North America PE • North America PE • Health Care Growth • Europe PE • Europe PE • Global Impact • Asia PE • Asia PE • Customized Portfolio Solutions • Middle Market (Ascendant) • K-Series – Private Wealth: Private Equity • Core
Slide 18: Diversified & Fast-Growing Management Fee Profile
…Has Led To A Diversified & Fast-Growing Management Fee Profile Other(1) ~30% CAGR Core PE Growth Equity Real Estate Infrastructure Alternative Credit Leveraged Credit Traditional PE Distinct strategies in Americas, Europe and Asia 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 202
Slide 19: Lifecycle Of Our Products
Lifecycle Of Our Products Early Developing Maturing Scaled Platform Formation Product Buildout Building Scale Scale Benefits Private Health Care Growth North America PE Equity Middle Market PE Technology Growth Global Impact Europe PE Core PE Customized Portfolio Solutions Asia PE Core+ Real Estate
Slide 20: Lifecycle Of Our Products
Lifecycle Of Our Products Early Developing Maturing Scaled Platform Formation Product Buildout Building Scale Scale Benefits Private Health Care Growth North America PE Equity Middle Market PE Technology Growth 50%+ Global Impact Europe PE Core PE Customized Portfolio Solutions Asia PE Core+ Real Es
Slide 21: 30+ Strategies Targeted To Raise Capital In The Next 12-18 Months
30+ Strategies Targeted To Raise Capital In The Next 12-18 Months Including three major flagship strategies Private Equity Real Assets Credit Insurance Infrastructure & Real Estate as an asset class • North America Private • Global Infrastructure • Global Leveraged Credit • Reinsurance Sidecar Equit
Slide 22: K-Series Deep Dive
K-Series Deep Dive K-Series Scaled Across Each Asset Class Growing K-Series AUM ($ in billions) 4x Since Private Equity Infrastructure 4Q’22 ~$9 Real Estate Credit $2.8 Private Wealth Strategy 1 KKR Brand: Alts Pioneer & Alts Excellence K-Series: Differentiated Products $4.0 2 Customized For Wealth
Slide 23: Insurance
Insurance
Slide 24: Overview Of Global Atlantic
Overview Of Global Atlantic Leading insurance company with a 20-year track record of serving the retirement & life insurance needs of individuals & institutions • Founded at Goldman Sachs in 2004 and separated as an independent company in 2013 • In February 2021, initially acquired by KKR as a major
Slide 25: Global Atlantic Assets Under Management Has Grown
Global Atlantic Assets Under Management Has Grown Global Atlantic Assets Under Management ($ in billions) $177 $161 +27% CAGR $139 $123 $98 $72 July 8, 2020 February 1, 2021 2021 2022 2023 1Q'24 (at Announcement) (at Closing) Note: CAGR represents the rate from 2Q’20 Global Atlantic AUM of $73 billi
Slide 26: Multiplier Effect: Scaling GA And Asset Management In Tandem
Multiplier Effect: Scaling GA And Asset Management In Tandem …And GA Helps Scale KKR Helps Scale GA Originations… …And Third Party Insurance Capital KKR Existing Platforms… ($ in billions) ($ in billions) ($ in billions) KKR AUM of Asset Classes Average Annual Asset Originations(1) Third Party Insur
Slide 27: KKR Asset-Based Finance Platform Deep Dive
KKR Asset-Based Finance Platform Deep Dive Highlights Asset-Based Finance Touches Our Daily Lives, Globally ✔ $54 billion of AUM $5.2 trillion addressable market, ✔ growing to $7.7 trillion Aircraft Leasing Auto Lending Equipment Leases Home Improvement Loans High Grade ABF strategy targets ✔ 150-20
Slide 28: Asset-Based Finance: KKR Captive Origination Platforms
Asset-Based Finance: KKR Captive Origination Platforms 19 Origination Platforms | 6,700+ Platform Employees | $20 billion Average Originations Per Year Over 2022-2023 KKR ABF platforms have unparalleled presence by geography… …and by asset type Number of platforms by asset type 2 2 7 19 (In Asia) 4
Slide 29: Successful KKR-GA Track Record Enhanced Under 100% Ownership
Successful KKR-GA Track Record Enhanced Under 100% Ownership Paths to Unlocking More Value in 2024+ Investment • Align KKR investing businesses, capital markets distribution, and balance sheet capacity within GA to drive Collaboration origination and investment outcomes International • Develop and e
Slide 30: Strategic Holdings
Strategic Holdings
Slide 31: An Observation: The Asset Management Industry
An Observation: The Asset Management Industry Market Capitalization ($ in billions) $889 $884 Public Asset Managers Globally Note: Market capitalization as of June 4, 2024. Asset Managers inclusive of 3i Group, Affiliated Managers Group, AllianceBernstein, Amundi, Apollo, Ares, BlackRock, Blackstone
Slide 32: What Is Core PE?
What Is Core PE? Strategic Holdings will consist of KKR’s direct interest in our Core Private Equity strategy Key Characteristics of a Core Private Equity Business Long Duration Lower Leverage Over Hold Period High-Quality Management More Limited External Exposures Cash Generative More Limited Disru
Slide 33: We Have Built An Attractive, Diversified Strategy
We Have Built An Attractive, Diversified Strategy Industry Diversification(1) Health Care 13% Business Services 33% TMT 13% Infrastructure 13% Consumer 29% Note: See Appendix for endnotes for footnote references and important information about the core private equity strategy. 33
Slide 34: Strong Growth In Our Core PE Businesses
Strong Growth In Our Core PE Businesses… Revenue Growth EBITDA Growth ($ in millions) ($ in millions) ~16% Annualized Like-for-Like Growth Since 2018(1) ~16% Annualized Like-for-Like Growth Since 2018(1) $3,570 $866 $2,895 $702 $622 $2,300 $1,798 $459 $1,380 $344 $988 $256 $285 $93 2017 2018 2019 20
Slide 35: Highly Visible And Recurring Earnings for KKR
…Results In Highly Visible And Recurring Earnings for KKR Projected Strategic Holdings Operating Earnings(1) ($ in millions) $1,000+ $600+ $300+ $15 2023 2026E 2028E 2030E Note: Past performance is no guarantee of future results. Projected Strategic Holdings Operating Earnings (presented above for 2
Slide 36: Our Model – Three Growth Engines
Our Model – Three Growth Engines Asset Management Insurance Strategic Holdings Multiple paths to Strong conviction $1+ billion annual surpass $1 trillion of we can double Global Operating Earnings by AUM in the next Atlantic AUM again 2030E 5 years Note: The figures and statements above are forward-
Slide 37: Appendix I
Appendix I
Slide 38: Our Earnings Framework
Our Earnings Framework Strategic Expected Insurance Fee Related Holdings Total Operating to be More Operating Stable & Earnings Operating Earnings Recurring Earnings Earnings Net of Compensation and Operating Expenses Net Realized Net Realized Driven by Performance Investment Total Investing Monetiz
Slide 39: Total Operating Earnings – Durable, Recurring And Growth-Oriented
Total Operating Earnings – Durable, Recurring And Growth-Oriented Fee Related Insurance Strategic Holdings Total Operating Earnings Operating Earnings Operating Earnings Earnings We expect approximately 70% of pre-tax earnings to be more recurring in nature Note: These figures and statements are est
Slide 40: First Quarter 2024 Segment Earnings
First Quarter 2024 Segment Earnings ($ in thousands, except per share data) 1Q'23 1Q'24 1Q'23 LTM 1Q'24 LTM Management Fees $ 738,156 $ 815,327 $ 2,769,715 $ 3,107,496 Transaction and Monitoring Fees, Net 142,179 152,084 612,074 730,559 Fee Related Performance Revenues 21,741 19,101 100,355 91,787 F
Slide 41: Appendix II
Appendix II
Slide 42: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) ($ in thousands) FY'20 1Q'23 1Q'24 1Q'23 LTM 1Q'24 LTM Net Income (Loss) - KKR Common Stockholders $ 1,945,954 $ 322,744 $ 682,214 $ (258,134) $ 4,039,984 Preferred Stock Dividends 56,555 17,250 — 69,000 34,497 Net Income (Loss) Attributable to
Slide 43: Reconciliation of GAAP to Non-GAAP Shares (Unaudited)
Reconciliation of GAAP to Non-GAAP Shares (Unaudited) 1Q'23 1Q'24 1Q'23 LTM 1Q'24 LTM Weighted Average GAAP Shares of Common Stock Outstanding - Basic 861,108,510 885,005,824 815,810,479 873,421,040 Adjustments: Weighted Average KKR Holdings Units — — 43,222,533 — Weighted Average Exchangeable Secur
Slide 44: Important Information – Endnotes
Important Information – Endnotes Notes to Page 3 – KKR Overview Fund III is compared to MSCI Asia; Core Investment Vehicles is compared to a blend of MSCI World Quality and MSCI ACWI Minimum Volatility; Next Generation Technology Growth Fund II is compared • KKR offices excludes offices that are not
Slide 45: Important Information – Endnotes (cont'd)
Important Information – Endnotes (cont’d) Note to Page 27 – KKR Asset-Based Finance Platform Deep Dive • Source on ABF total addressable market: Integer Advisors and KKR research estimates based on shadow banking data from the Financial Stability Board. Notes to Page 33 – We Have Built An Attractive
Slide 46: Non-GAAP and Segment Definitions
Non-GAAP and Segment Definitions The key non-GAAP and other operating and performance measures that follow are used by management deductions from equity-based compensation were to be excluded from Income Taxes on Adjusted in making operational and resource deployment decisions as well as in assessin
Slide 47: Non-GAAP and Segment Definitions (cont'd)
Non-GAAP and Segment Definitions (cont’d) • Insurance Operating Earnings is the segment profitability measure used to make operating Strategic Holdings Operating Earnings currently consists of earnings derived from dividends that decisions and to assess the performance of the Insurance segment. This
Slide 48: Important Information – Other Legal Disclosures
Important Information – Other Legal Disclosures Presentation of Performance Information Forward-Looking Statements Past performance is not a guarantee of future results. Information about any fund or strategy and This presentation contains certain forward-looking statements pertaining to KKR, includ
Slide 49: Important Information – Other Legal Disclosures (cont'd)
Important Information – Other Legal Disclosures (cont’d) Forward-Looking Statements (cont’d) requirements and sources of liquidity; assets we refer to as “perpetual capital” being subject to material reduction; high variability in earnings and cash flow; “clawback” provisions in our governing These
Slide 50: Important Information – Other Legal Disclosures (cont'd)
Important Information – Other Legal Disclosures (cont’d) Website From time to time, we may use our website as a channel of distribution of material information. Financial and other material information regarding KKR is routinely posted on and accessible at www.kkr.com. Financial and other important