Kkr & Co. Inc. · NYSE:KKR
Kkr & — Q3 2024 Earnings Presentation
46 slides from Kkr &'s earnings presentation, Oct 24, 2024
Slide 1: KKR & Co. Inc. Reports Third Quarter 2024 Financial Results
KKR & Co. Inc. Reports Third Quarter 2024 Financial February 7,Results 2023 October 24, 2024
Slide 2: KKR Reports Third Quarter 2024 Financial Results
KKR Reports Third Quarter 2024 Financial Results New York, October 24, 2024 – KKR & Co. Inc. (NYSE: KKR) today reported its third quarter 2024 results. Conference Call A conference call to discuss KKR's financial results will be held on October 24, 2024 at 10:00 a.m. ET. The conference call may be a
Slide 3: Legal Disclosures
KKR Reports Third 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. Third Quarter Earnings
KKR & Co. Inc. Third Quarter Earnings
Slide 5: Third Quarter 2024 GAAP Results (Unaudited)
Third Quarter 2024 GAAP Results (Unaudited) GAAP Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders was $0.7 billion for the quarter and $2.0 billion YTD. ($ in thousands, except per share data) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD Revenues Asset Management and Strategic Holdings $ 1,66
Slide 6: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights • Third quarter was strong as both FRE and TOE had their highest quarters in KKR's history • Fee Related Earnings (“FRE”) of $1.0 billion ($1.12/adj. share) in the quarter, up 79% year-over-year • FRE was $3.1 billion in the LTM ($3.47/adj. share), up 37% year-over-year
Slide 7: Third Quarter 2024 Segment Earnings
Third Quarter 2024 Segment Earnings ($ in thousands, except per share data) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD Management Fees $ 758,700 $ 892,629 $ 2,245,744 $ 2,555,263 Transaction and Monitoring Fees, Net 124,014 467,145 456,421 842,087 Fee Related Performance Revenues 20,436 56,655 70,529 112,901 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 durable and recurring portion of KKR's total segment earnings • The majority of the increase in TOE over the las
Slide 9: Asset Management Segment Detail
Asset Management Segment Detail
Slide 10: Asset Management Segment
Asset Management Segment ($ in thousands, except per share data) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD Management Fees $ 758,700 $ 892,629 $ 2,245,744 $ 2,555,263 Transaction and Monitoring Fees, Net 124,014 467,145 456,421 842,087 Fee Related Performance Revenues 20,436 56,655 70,529 112,901 Fee Related
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 13% to $3.3 billion in the LTM • Increased 36% 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 $624 billion, up 18% year-over-year, with $24 billion of organic new capital raised in the quarter and $118 billion in the LTM • Fee Paying AUM of $506 billion, up 19% year-over-year, with $25 billion of organic new capital raised in the quarter and $122 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 90 bps that becom
Slide 14: Fund Investment Performance
Fund Investment Performance Gross unrealized carried interest totals $7.9 billion as of September 30, 2024 Gross Return 3Q'24 LTM Private Equity Traditional Private Equity Portfolio 5% 17% Real Assets Infrastructure Portfolio 6% 18% Opportunistic Real Estate Portfolio 2% 3% Credit Leveraged Credit C
Slide 15: Asset Management Segment − Private Equity
Asset Management Segment − Private Equity • AUM: Increased 3% quarter-over-quarter and increased 10% year-over-year to $190 billion with organic new capital raised of $2 billion in the quarter and $8 billion YTD • New capital raised in the quarter was primarily driven by K-Series PE, private equity
Slide 16: Asset Management Segment − Real Assets
Asset Management Segment − Real Assets • AUM: Increased 7% quarter-over-quarter and 31% year-over-year to $163 billion with organic new capital raised of $10 billion in the quarter and $34 billion YTD • New capital raised in the quarter was widespread and included Global Infrastructure V, Global Atl
Slide 17: Asset Management Segment − Credit and Liquid Strategies
Asset Management Segment − Credit and Liquid Strategies • AUM: Increased 3% quarter-over-quarter and 18% year-over-year to $271 billion with organic new capital raised of $11 billion in the quarter and $44 billion YTD • New capital raised in the quarter was primarily driven by inflows at Global Atla
Slide 18: Asset Management Segment − Capital Markets and Principal Activities
Asset Management Segment − Capital Markets • Transaction Fees: Totaled $424 million in the quarter and $731 million YTD. 3Q is the largest amount of transaction fees generated in KKR's history • Approximately half of transaction fees were originated in North America in the quarter • Infrastructure g
Slide 19: Insurance Segment Detail
Insurance Segment Detail
Slide 20: Insurance Segment
Insurance Segment • Insurance Operating Earnings: Insurance Operating Earnings of $308 million in the quarter benefited from approximately $50 million primarily related to the impact of Global Atlantic's annual actuarial assumption review • Net Investment Income: Net Investment Income of $1.6 billio
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 and the sale of a Core PE business • Highlights: • Expect Strategic Holdings Operating Earnings will be modest in 2024, $300+ million by 2026, $600+ million by 2028 and $1+ billion by 20
Slide 23: Supplemental Information
Supplemental Information
Slide 24: Duration of Capital
Duration of Capital Growth in Strategic & Perpetual Capital Assets Under Management ($ in billions) $328 53% of AUM is perpetual capital or long-dated strategic investor partnerships $69 $266 7% $62 42% 40% $259 $204 11% 93% of AUM is perpetual capital or has a duration of at least 8 years at incept
Slide 25: Assets Under Management Rollforward
Assets Under Management Rollforward Three Months Ended September 30, 2024 ($ in millions) Private Equity Real Assets Credit and Liquid Strategies Total Beginning Balance $ 185,265 $ 151,549 $ 264,527 $ 601,341 New Capital Raised 2,490 10,463 10,940 23,893 Distributions and Other (3,832) (3,120) (6,8
Slide 26: Fee Paying Assets Under Management Rollforward
Fee Paying Assets Under Management Rollforward Three Months Ended September 30, 2024 ($ in millions) Private Equity Real Assets Credit and Liquid Strategies Total Beginning Balance $ 118,240 $ 126,574 $ 242,506 $ 487,320 New Capital Raised 2,679 11,147 11,169 24,995 Distributions and Other (1,984) (
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 $ 6,142 $ 12,428 $ 182 $ 12,132 $ 15,243 Americas
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 $ 10,314 $ 10,314 $ — $ — $ — $ — Global In
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 $ 2,361 $
Slide 30: Strong Financial Profile
Strong Financial Profile • KKR & Co. Inc. is 'A' rated by both S&P and Fitch • Average maturity of debt is approximately 15 years with an after-tax weighted average fixed coupon of 3%(1) • Debt capacity includes a $2.75 billion undrawn revolving credit facility Key Asset Management Highlights - Thir
Slide 31: 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 third quarter of 2024, which will be paid on November 19, 2024 to holders of record of common stock as of the close of business on November 4, 2024. The declar
Slide 32: Stock Summary
Stock Summary From December 31, 2023 through October 18, 2024, KKR used a total of $125 million to retire equity awards representing 1.2 million shares that otherwise would have been issued to participants under KKR's equity incentive plan. During this period, retirements were made at an average cos
Slide 33: Appendix
Appendix
Slide 34: GAAP Condensed Consolidated Income Statement (Unaudited)
GAAP Condensed Consolidated Income Statement (Unaudited) ($ in thousands) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD Revenues Asset Management and Strategic Holdings Fees and Other $ 655,367 $ 1,105,666 $ 2,086,830 $ 2,621,516 Capital Allocation-Based Income (Loss) 1,009,645 1,163,424 2,155,560 3,164,491 1,665
Slide 35: Reconciliation of GAAP to Non-GAAP Shares (Unaudited)
Reconciliation of GAAP to Non-GAAP Shares (Unaudited) 3Q'23 4Q'23 1Q'24 2Q'24 3Q'24 GAAP Shares of Common Stock Outstanding 884,585,205 885,005,588 885,010,967 887,439,098 887,448,993 Adjustments: Exchangeable Securities and Other 3,909,477 4,463,644 5,768,290 7,005,071 6,996,738 Adjusted Shares 888
Slide 36: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) ($ in thousands) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD 3Q'23 LTM 3Q'24 LTM Net Income (Loss) - KKR Common Stockholders $ 1,472,878 $ 654,550 $ 2,640,085 $ 2,004,690 $ 2,761,195 $ 3,045,119 Preferred Stock Dividends 17,248 — 51,747 — 68,997 — Net Inco
Slide 37: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) ($ in thousands) 3Q'23 3Q'24 3Q'23 YTD 3Q'24 YTD Total Operating Earnings $ 767,552 $ 1,315,021 $ 2,293,775 $ 3,326,784 Total Investing Earnings 297,498 318,433 677,095 751,576 Depreciation and Amortization 12,885 13,013 34,370 38,065 Adjusted
Slide 38: Reconciliation of GAAP to Non-GAAP Measures (Unaudited)
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) ($ in thousands) 3Q'24 KKR & Co. Inc. Stockholders' Equity - Common Stock - GAAP $ 24,137,685 Asset Management and Strategic Holdings Net Assets and Other(1) (20,362,391) (2) Accumulated Other Comprehensive Income and Other (Insurance) 5,057,87
Slide 39: Important Information − Endnotes
Important Information − Endnotes Notes 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 September 30, 2024, unless o
Slide 40: Important Information − Endnotes (cont'd)
Important Information − Endnotes (cont’d) Notes to Page 18 – Strategic Holdings Segment Notes to Page 22 – Fee Paying Assets Under Management Rollforward • The adjusted revenue and adjusted EBITDA information represents the measures • For the three months ended September 30, 2024, Distributions and
Slide 41: 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 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) 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 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) 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 44: 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 45: 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 46: 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