Kkr & Co. Inc. · NYSE:KKR
Kkr & — Q1 2023 Earnings Presentation
47 slides from Kkr &'s earnings presentation, May 8, 2023
Slide 1: KKR & Co. Inc. Reports First Quarter 2023 Financial Results
KKR & Co. Inc. Reports First Quarter 2023 Financial Results May 8, 2023
Slide 2: KKR Reports First Quarter 2023 Financial Results
KKR Reports First Quarter 2023 Financial Results New York, May 8, 2023 – KKR & Co. Inc. (NYSE: KKR) today reported its first quarter 2023 results. Conference Call A conference call to discuss KKR's financial results will be held on May 8, 2023 at 12:00 p.m. ET. The conference call may be accessed by
Slide 3: Legal Disclosures
KKR Reports First 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. First Quarter Earnings
KKR & Co. Inc. First Quarter Earnings
Slide 5: KKR's First Quarter 2023 GAAP Results (Unaudited)
KKR’s First Quarter 2023 GAAP Results (Unaudited) • GAAP Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders was $322.7 million for the quarter. GAAP Stockholders’ Equity Per Outstanding Share of Common Stock was $21.54 at quarter end. ($ in thousands, except per share data) 1Q'22 1
Slide 6: KKR's First Quarter 2023 Highlights
KKR’s First Quarter 2023 Highlights • Fee Related Earnings (“FRE”) of $549 million ($0.62/adj. share) in the quarter, down 9% year-over-year • FRE was $2.1 billion in the LTM ($2.38/adj. share), down 5% year-over-year • After-tax Distributable Earnings (“DE”) of $719 million ($0.81/adj. share) in th
Slide 7: KKR's First Quarter 2023 Segment Earnings
KKR’s First Quarter 2023 Segment Earnings ($ in thousands, except per share data) 1Q'22 1Q'23 1Q'22 LTM 1Q'23 LTM Management Fees $ 624,928 $ 738,156 $ 2,256,628 $ 2,769,715 Transaction and Monitoring Fees, Net 306,038 142,179 1,174,602 612,074 Fee Related Performance Revenues 12,051 21,741 47,607 1
Slide 8: Management Fees and Fee Related Earnings
Management Fees and Fee Related Earnings Management Fees Fee Related Earnings Per Adjusted Share • Increased by 23% to $2.8 billion in the LTM • Decreased 5% year-over-year driven primarily by lower capital markets revenues reflecting reduced • Growth has been driven by an increase in Fee issuance l
Slide 9: Assets Under Management
Assets Under Management • AUM increased to $510 billion, up 6% year-over-year, with $12 billion of organic new capital raised in the quarter and $67 billion in the LTM • Fee Paying AUM of $416 billion, up 12% year-over-year, with $13 billion of organic new capital raised in the quarter and $65 billi
Slide 10: Additional Capital Detail
Additional Capital Detail • Dry Powder: Uncalled commitments of $106 billion are diversified across the firm’s strategies and are down 7% year-over-year • AUM Not Yet Paying Fees: At quarter end, there was $37 billion of committed capital with a weighted average management fee rate of ~100 bps that
Slide 11: Fund Investment Performance
Fund Investment Performance • Gross unrealized carried interest totals $4.5 billion as of March 31, 2023 Gross Return 1Q'23 LTM Private Equity Traditional Private Equity Portfolio 2% -9% Real Assets Opportunistic Real Estate Portfolio -3% -9% Infrastructure Portfolio 7% 9% Credit Leveraged Credit Co
Slide 12: Segment Detail
Segment Detail KKR
Slide 13: Asset Management Segment − Private Equity
Asset Management Segment − Private Equity • AUM: Remained flat quarter-over-quarter and decreased 5% year-over-year to $166 billion with organic new capital raised of $0.3 billion in the quarter and $12 billion in the LTM • Europe VI held its final close in 1Q bringing the total fund size, including
Slide 14: Asset Management Segment − Real Assets
Asset Management Segment − Real Assets • AUM: Increased 2% quarter-over-quarter and 29% year-over-year to $121 billion with organic new capital raised of $3 billion in the quarter and $21 billion in the LTM • New capital raised in the quarter driven by multiple Real Estate equity and credit strategi
Slide 15: Asset Management Segment − Credit and Liquid Strategies
Asset Management Segment − Credit and Liquid Strategies • AUM: Increased 2% quarter-over-quarter and 6% year-over-year to $224 billion with organic new capital raised of $9 billion in the quarter and $34 billion in the LTM • New capital raised in the quarter came from a diverse set of Leveraged Cred
Slide 16: Capital Markets and Principal Activities Segments
Asset Management Segment − Capital Markets • Transaction Fees: Totaled $102 million in the quarter and $447 million in the LTM • 1Q fees by geography and transaction type: • 45% originated in Europe with 41% and 14% from North America and Asia, respectively • Core Private Equity was the largest fee
Slide 17: Insurance Segment
Insurance Segment • As detailed within a Form 8-K filed on May 3, 2023, KKR has restated its Insurance Segment results to reflect the impacts of LDTI. All of the results below reflect these restated results. In addition, to enhance comparability to other alternative asset managers, KKR now reports i
Slide 18: Book Value
Book Value • Book Value Per Adjusted Share: Declined 4% year-over-year • Net Cash and Total Investments of $19.52 per adjusted share at 1Q'23, compared to $22.42 at 1Q'22 • Total Cash and Investments: $25 billion at quarter end • Global Atlantic Book Value: Reflects our 63% economic ownership ($ in
Slide 19: Investments Detail
Investments Detail ($ in millions) 1Q'23 Investment Holdings by Asset Class Investments Fair Value Leveraged Credit Traditional Private Equity $ 3,391 6% Alternative Credit Infrastructure 5% Core Private Equity 5,701 8% Other Growth Equity 876 11% Private Equity Total 9,968 Real Estate 10% Energy 84
Slide 20: Capital Detail
Capital Detail KKR
Slide 21: Duration of Capital
Duration of Capital Strategic & Perpetual Capital Assets Under Management ($ in billions) 51% of AUM is perpetual capital or long-dated $258 strategic investor partnerships $221 $61 9% $56 39% 40% $197 12% $165 91% of AUM is perpetual capital or has a duration of at least 8 years at inception 1Q'22
Slide 22: Assets Under Management Rollforward
Assets Under Management Rollforward Three Months Ended March 31, 2023 Credit and Liquid ($ in millions) Private Equity Real Assets Total Strategies Beginning Balance $ 165,147 $ 118,592 $ 220,158 $ 503,897 New Capital Raised 349 2,613 8,715 11,677 (1) Distributions and Other (1,227) (1,547) (6,558)
Slide 23: Fee Paying Assets Under Management Rollforward
Fee Paying Assets Under Management Rollforward Three Months Ended March 31, 2023 Credit and Liquid ($ in millions) Private Equity Real Assets Total Strategies Beginning Balance $ 102,261 $ 103,532 $ 206,130 $ 411,923 New Capital Raised 1,407 3,434 8,496 13,337 (1) Distributions and Other (1,401) (1,
Slide 24: Supplemental Information
Supplemental Information KKR
Slide 25: Investment Vehicle Summary
Investment Vehicle Summary Investment Amount Period ($ 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 $ 12,250 3
Slide 26: Investment Vehicle Summary (cont'd)
Investment Vehicle Summary (cont’d) Investment Amount Period ($ in millions) Percentage Start End Commitmen Uncalled Committed Remaining Remaining Invested Realized Date Date t Commitments by General Cost Fair Value Partner REAL ASSETS BUSINESS LINE Energy Income and Growth Fund II 8/2018 8/2022 $ 9
Slide 27: Investment Vehicle Summary (cont'd) & Additional AUM Detail
Investment Vehicle Summary (cont’d) & Additional AUM Detail Investment Amount Period ($ in millions) Percentage Start End Uncalled Committed Remaining Remaining Commitment Invested Realized Date Date Commitments by General Cost Fair Value Partner (1) CREDIT AND LIQUID STRATEGIES BUSINESS LINE Disloc
Slide 28: Stock Summary
Stock Summary From December 31, 2022 through May 5, 2023, KKR used a total of approximately $32 million to retire equity awards representing 0.6 million shares that otherwise would have been issued to participants under KKR's equity incentive plans. During this period, retirements were made at an av
Slide 29: Investments Detail – Core Private Equity
Investments Detail – Core Private Equity Growth in Balance Sheet Fair Value Background on Core Private Equity ($ in billions) • Core Private Equity is a long duration investment strategy with a more Cost modest risk return profile compared to traditional PE; we are seeking mid- to-high teens gross I
Slide 30: Dividends
Dividends The declaration and payment of any future dividends on preferred or 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 the board deems relevant,
Slide 31: Appendix
Appendix KKR
Slide 32: GAAP Condensed Consolidated Income Statement (Unaudited)
GAAP Condensed Consolidated Income Statement (Unaudited) ($ in thousands) 1Q'22 1Q'23 1Q'22 LTM 1Q'23 LTM Revenues Asset Management Fees and Other $ 780,511 $ 677,016 $ 3,137,354 $ 2,718,132 Capital Allocation-Based Income (Loss) (945,743) 449,018 3,212,024 (1,105,748) (165,232) 1,126,034 6,349,378
Slide 33: GAAP Condensed Consolidated Balance Sheet (Unaudited)
GAAP Condensed Consolidated Balance Sheet (Unaudited) ($ in thousands) 4Q'22 1Q'23 Assets Asset Management Cash and Cash Equivalents $ 6,705,325 $ 5,576,121 Investments 92,375,463 97,949,918 Other Assets 7,114,360 7,057,818 106,195,148 110,583,857 Insurance Cash and Cash Equivalents 6,118,231 3,713,
Slide 34: Reconciliation of GAAP to Non-GAAP Shares (Unaudited)
Reconciliation of GAAP to Non-GAAP Shares (Unaudited) 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 GAAP Shares of Common Stock Outstanding 590,472,444 859,833,444 859,833,444 861,110,478 861,104,000 Adjustments: KKR Holdings Units 258,726,163 — — — — Exchangeable Securities and Other 28,199,255 29,288,380 29,288,3
Slide 35: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) ($ in thousands) 1Q'22 1Q'23 1Q'22 LTM 1Q'23 LTM Net Income (Loss) - KKR Common Stockholders $ (9,786) $ 322,744 $ 2,884,119 $ (258,134) Preferred Stock Dividends 17,250 17,250 97,306 69,000 Net Income (Loss) Attributable to Noncontrolling Inte
Slide 36: Reconciliation of GAAP to Non-GAAP Measures (cont'd)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (cont’d) ($ in thousands) 1Q'22 1Q'23 1Q'22 LTM 1Q'23 LTM Fee Related Earnings $ 604,922 $ 548,578 $ 2,211,146 $ 2,111,007 Insurance Segment Operating Earnings 143,947 205,112 847,444 785,927 Realized Performance Income 609,207 175,398 2,579,49
Slide 37: Reconciliation of GAAP to Non-GAAP Measures (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 1Q'22 1Q'23 KKR & Co. Inc. Stockholders' Equity - Common Stock $ 8,167,056 $ 10,324,936 $ 12,118,472 $ 16,542,643 $ 17,691,975 $ 14,962,912 $ 18,546,889
Slide 38: KKR's First Quarter 2023 Segment Earnings – Detailed View
KKR’s First Quarter 2023 Segment Earnings – Detailed View ($ in thousands) 1Q'22 1Q'23 1Q'22 LTM 1Q'23 LTM Management Fees $ 624,928 $ 738,156 $ 2,256,628 $ 2,769,715 Transaction and Monitoring Fees, Net 306,038 142,179 1,174,602 612,074 Fee Related Performance Revenues 12,051 21,741 47,607 100,355
Slide 39: Important Information − Endnotes
Important Information − Endnotes Notes to page 2 – KKR's First Quarter 2023 Highlights • Net Cash and Total Investments is calculated as Cash and Short-term Investments, less Debt Obligations – KKR and KFN, plus Investments and Global Atlantic Book Value. Please see the endnote for page 15 for infor
Slide 40: Important Information − Endnotes (cont'd)
Important Information − Endnotes (cont’d) Notes to page 13 – Insurance Segment • Net investment income represents income earned on invested assets, net of investment-related expenses, including investment management fees paid to KKR. • Net cost of insurance represents the net cost of funding institu
Slide 41: Important Information − Endnotes (cont'd)
Important Information − Endnotes (cont’d) Notes to page 17 – Duration of Capital • Please see endnote for page 5 for information about the term "perpetual capital." • "Other" in the chart primarily includes hedge fund partnerships and certain leveraged credit funds. Notes to pages 21 to 23 – Investm
Slide 42: Important Information – Non-GAAP and Other Measures
Important Information – Non-GAAP and Other Measures Non-GAAP and Segment Measures The key non-GAAP and other operating and performance measures that follow are used by management in making operational and resource deployment decisions as well as assessing the performance of KKR's business. They incl
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) • Book Value is a non-GAAP performance measure of the net assets of KKR and is used by management primarily in assessing the unrealized value of KKR’s net assets presented on a basis that (i) excludes
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) • Fee Related Earnings (“FRE”) is a performance measure used to assess the Asset Management segment’s generation of profits from revenues that are measured and received on a recurring basis and are no
Slide 45: Important Information – Non-GAAP and Other Measures (cont'd)
Important Information – Non-GAAP and Other Measures (cont’d) Other Measures and Terms (cont’d) • Capital Invested is the aggregate amount of capital invested by (i) KKR’s investment funds and Global Atlantic insurance companies, (ii) KKR's Principal Activities business line as a co-investment, if an
Slide 46: Important Information – Other Legal Disclosures
Important Information – Other Legal Disclosures Website From time to time, KKR may use its website as a channel of distribution of material company information. Financial and other important information regarding KKR is routinely posted and accessible on the Investor Center for KKR & Co. Inc. at htt
Slide 47: Important Information – Other Legal Disclosures (cont'd)
Important Information – Other Legal Disclosures (cont'd) Forward Looking Statements This presentation contains certain forward-looking statements pertaining to KKR, including investment funds, vehicles and accounts managed by KKR and the insurance companies managed by Global Atlantic. You can identi