Kkr & Co. Inc. · NYSE:KKR
Kkr & — Q4 2023 Earnings Presentation
45 slides from Kkr &'s earnings presentation, Feb 6, 2024
Slide 1: KKR & Co. Inc. Reports Fourth Quarter 2023 Financial Results
KKR & Co. Inc. Reports Fourth Quarter 2023 Financial February 7,Results 2023 February 6, 2024
Slide 2: KKR Reports Fourth Quarter 2023 Financial Results
KKR Reports Fourth Quarter 2023 Financial Results New York, February 6, 2024 – KKR & Co. Inc. (NYSE: KKR) today reported its fourth quarter 2023 results. Conference Call A conference call to discuss KKR's financial results will be held on February 6, 2024 at 10:00 a.m. ET. The conference call may be
Slide 3: Legal Disclosures
KKR Reports Fourth 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. Fourth Quarter Earnings
KKR & Co. Inc. Fourth Quarter Earnings
Slide 5: Fourth Quarter 2023 GAAP Results (Unaudited)
Fourth Quarter 2023 GAAP Results (Unaudited) GAAP Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders was $3.7 billion for the full year 2023. GAAP Stockholders’ Equity Per Outstanding Share of Common Stock was $25.83 at year end. ($ in thousands, except per share data) 4Q'22 4Q'23
Slide 6: Fourth Quarter 2023 Highlights
Fourth Quarter 2023 Highlights • Fee Related Earnings (“FRE”) of $675 million ($0.76/adj. share) in the quarter, up 21% year-over-year • FRE was $2.4 billion for the year ($2.68/adj. share), up 10% year-over-year Financial Measures • After-tax Distributable Earnings (“DE”) of $888 million ($1.00/adj
Slide 7: Fourth Quarter 2023 Segment Earnings
Fourth Quarter 2023 Segment Earnings ($ in thousands, except per share data) 4Q'22 4Q'23 FY'22 FY'23 Management Fees $ 706,098 $ 784,581 $ 2,656,487 $ 3,030,325 Transaction and Monitoring Fees, Net 195,139 264,233 775,933 720,654 Fee Related Performance Revenues 18,691 23,898 90,665 94,427 Fee Relat
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 14% to $3.0 billion for the year • Increased 9% year-over-year driven by the growth in • Growth has been driven by an increase in Fee Paying management fees AUM from organi
Slide 9: Assets Under Management
Assets Under Management • AUM of $553 billion, up 10% year-over-year, with $31 billion of organic new capital raised in the quarter and $69 billion for the year • Fee Paying AUM of $446 billion, up 8% year-over-year, with $32 billion of organic new capital raised in the quarter and $71 billion for t
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 year end, there was $39 billion of committed capital with a weighted average management fee rate of greater than 90 bps that becomes pa
Slide 11: Fund Investment Performance
Fund Investment Performance Gross unrealized carried interest totals $6.0 billion as of December 31, 2023 Gross Return 4Q'23 FY'23 Private Equity Traditional Private Equity Portfolio 3% 16% Real Assets Opportunistic Real Estate Portfolio -1% -2% Infrastructure Portfolio 5% 18% Credit Leveraged Credi
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 7% year-over-year to $176 billion with organic new capital raised of $3 billion in the quarter and $7 billion for the year • Both Next Generation Technology III and Global Impact II held final closes in
Slide 14: Asset Management Segment − Real Assets
Asset Management Segment − Real Assets • AUM: Increased 5% quarter-over-quarter and 10% year-over-year to $131 billion with organic new capital raised of $6 billion in the quarter and $16 billion for the year • Following year end, Asia Pacific Infrastructure Investors II held its final close; the fu
Slide 15: Asset Management Segment − Credit and Liquid Strategies
Asset Management Segment − Credit and Liquid Strategies • AUM: Increased 7% quarter-over-quarter and 12% year-over-year to $245 billion with organic new capital raised of $22 billion in the quarter and $47 billion for the year • New capital raised in the quarter driven by inflows at Global Atlantic,
Slide 16: Capital Markets and Principal Activities Segments
Asset Management Segment − Capital Markets • Transaction Fees: Totaled $225 million in the quarter and $578 million for the year • Approximately 70% of transaction fees were originated in North America in the quarter • Traditional Private Equity and Core Private equity each generated approximately a
Slide 17: Insurance Segment
Insurance Segment • Net Investment Income: Net Investment Income of $1,466 million in the quarter reflects higher yields, growth in the investment portfolio attributable to strong net flows and variable investment income from a realized gain on the sale of a solar developer • Net Cost of Insurance:
Slide 18: Book Value
Book Value • Book Value Per Adjusted Share: Increased 13% year-over-year to $30.95 • Net Cash and Total Investments of $23.27 per adjusted share at 4Q'23, compared to $19.52 at 4Q'22 • Total Cash and Investments: $29 billion at year end ($ in millions, except per share data) 4Q'22 4Q'23 Book Value P
Slide 19: Investments Detail
Investments Detail ($ in millions) 4Q'23 Investment Holdings by Asset Class Investments Fair Value Other Alternative 8% Core Private Equity $ 6,669 Credit Traditional Private Equity 2,844 5% Core Private Growth Equity 1,278 Leveraged Credit Equity 7% 36% Private Equity Total 10,791 Real Estate 1,799
Slide 20: Capital Detail
Capital Detail
Slide 21: Duration of Capital
Duration of Capital Growth in Strategic & Perpetual Capital Assets Under Management ($ in billions) 52% of AUM $287 is perpetual capital or long-dated strategic investor partnerships $252 $63 8% $58 41% 40% $224 $194 11% 92% of AUM is perpetual capital or has a duration of at least 8 years at incept
Slide 22: Assets Under Management Rollforward
Assets Under Management Rollforward Three Months Ended December 31, 2023 ($ in millions) Private Equity Real Assets Credit and Liquid Strategies Total Beginning Balance $ 173,573 $ 124,730 $ 229,408 $ 527,711 New Capital Raised 2,706 6,452 22,219 31,377 Distributions and Other (3,259) (2,232) (8,003
Slide 23: Fee Paying Assets Under Management Rollforward
Fee Paying Assets Under Management Rollforward Three Months Ended December 31, 2023 ($ in millions) Private Equity Real Assets Credit and Liquid Strategies Total Beginning Balance $ 104,835 $ 108,067 $ 210,722 $ 423,624 New Capital Raised 4,055 5,981 22,133 32,169 Distributions and Other (1,230) (2,
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 $ 10,563 1
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 February 2, 2024, 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) 4Q'22 4Q'23 FY'22 FY'23 Revenues Asset Management Fees and Other $ 751,923 $ 877,039 $ 2,821,627 $ 2,963,869 Capital Allocation-Based Income (Loss) (58,429) 687,877 (2,500,509) 2,843,437 693,494 1,564,916 321,118 5,807,306 Ins
Slide 33: GAAP Condensed Consolidated Balance Statement (Unaudited)
GAAP Condensed Consolidated Balance Statement (Unaudited) ($ in thousands) 4Q'22 4Q'23 Assets Asset Management Cash and Cash Equivalents $ 6,705,325 $ 8,393,892 Investments 92,375,463 98,634,801 Other Assets 7,114,360 6,538,674 106,195,148 113,567,367 Insurance Cash and Cash Equivalents 6,118,231 11
Slide 34: Reconciliation of GAAP to Non-GAAP Shares (Unaudited)
Reconciliation of GAAP to Non-GAAP Shares (Unaudited) 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 GAAP Shares of Common Stock Outstanding 861,110,478 861,104,000 857,987,641 884,585,205 885,005,588 Adjustments: Exchangeable Securities and Other 29,517,712 29,517,712 30,804,276 3,909,477 4,463,644 Adjusted Shares
Slide 35: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) ($ in thousands) 4Q'22 4Q'23 FY'22 FY'23 Net Income (Loss) - KKR Common Stockholders $ 121,110 $ 1,040,429 $ (590,664) $ 3,680,514 Preferred Stock Dividends 17,250 — 69,000 51,747 Net Income (Loss) Attributable to Noncontrolling Interests (118,
Slide 36: Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (cont’d)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (cont’d) ($ in thousands) 4Q'22 4Q'23 FY'22 FY'23 Fee Related Earnings $ 559,431 $ 675,374 $ 2,167,351 $ 2,383,786 Insurance Segment Operating Earnings 231,365 231,274 724,762 816,637 Realized Performance Income 338,733 411,391 2,176,658 1,065,
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 4Q'23 KKR & Co. Inc. Stockholders' Equity - Common Stock $ 8,167,056 $ 10,324,936 $ 12,118,472 $ 16,542,643 $ 17,691,975 $ 22,858,694 Series C Mandatory
Slide 38: Fourth Quarter 2023 Segment Earnings – Detailed View
Fourth Quarter 2023 Segment Earnings – Detailed View ($ in thousands) 4Q'22 4Q'23 FY'22 FY'23 Management Fees $ 706,098 $ 784,581 $ 2,656,487 $ 3,030,325 Transaction and Monitoring Fees, Net 195,139 264,233 775,933 720,654 Fee Related Performance Revenues 18,691 23,898 90,665 94,427 Fee Related Comp
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 December 31, 2023, un
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 December 31, 2023, Distributions a
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 capital invested, uncalled commitments, cash and short-term investments, Fee Related Earnings, adjusted EBITDA, book value, debt levels, outstanding shares of common stock of This presentation contains certain forwar