Is Your Retirement Plan Investing in Your Favorite Football Team?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 7 hours ago
0mins
Should l Buy KKR?
Source: Barron's
- Fan Ownership: Pro football fans may unknowingly own a piece of their favorite team, in addition to their season tickets and merchandise.
- Team Merchandise: Fans often invest in various team-related items, such as jerseys and stadium cushions, which enhance their connection to the team.
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Analyst Views on KKR
Wall Street analysts forecast KKR stock price to rise
9 Analyst Rating
9 Buy
0 Hold
0 Sell
Strong Buy
Current: 103.600
Low
145.00
Averages
159.67
High
176.00
Current: 103.600
Low
145.00
Averages
159.67
High
176.00
About KKR
KKR & Co. Inc. is a global investment firm that offers alternative asset management as well as capital markets and insurance solutions. The Company’s segments include Asset Management, Insurance and Strategic Holdings. Asset Management segment offers a range of investment management services to investment funds, vehicles and accounts and provides capital markets services to portfolio companies and third parties. Asset Management segment includes five business lines: Private Equity, Real Assets, Credit and Liquid Strategies, Capital Markets and Principal Activities. Insurance segment is operated by Global Atlantic, which is a United States retirement and life insurance company that provides a suite of protection, legacy and savings products and reinsurance solutions to clients across individual and institutional markets. Global Atlantic offers individuals fixed-rate annuities and others. Strategic Holdings segment represents its participation in its core private equity strategy.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Is Your Retirement Plan Investing in Your Favorite Football Team?
- Fan Ownership: Pro football fans may unknowingly own a piece of their favorite team, in addition to their season tickets and merchandise.
- Team Merchandise: Fans often invest in various team-related items, such as jerseys and stadium cushions, which enhance their connection to the team.
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- Emerging Lexicon: Individual investors need to adapt to a new vocabulary related to private investments as a new category of funds is being introduced.
- Access for Retail Clients: Financial advisors are now able to assist retail clients in investing in assets that were previously accessible mainly to institutional investors.
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Credit Market Risks Amid AI Disruption
- Rising Default Risks: UBS analysts project that corporate loan defaults could reach between $75 billion and $120 billion over the next year, particularly impacting software and data services firms owned by private equity, thereby exacerbating instability in the credit markets.
- Delayed Market Reaction: Analysts note that the market has been slow to respond to the rapid advancements in AI technology, with many investors failing to timely recalibrate their views on credit evaluations, leading to an underestimation of credit risks that could trigger broader credit tightening.
- Potential Credit Crisis: In a worst-case scenario, default rates could double the baseline estimates, resulting in a sharp decline in liquidity in the credit markets, creating what is known as a 'tail risk' that could severely impact many companies.
- Industry Classification Impact: Mish categorizes companies into three groups, indicating that creators of foundational large language models like Anthropic and OpenAI are likely to emerge as winners, while high-debt private equity-owned software firms face greater survival pressures and may be eliminated in the AI transformation.
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AI Trade Sentiment Reverses, Four Major Industries Hit Hard
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- Brokerage Pressure: Investment banks and brokerage firms are under pressure following the rollout of AI tools by fintech firm Altruist, with forward P/E ratios declining from 24.7 to 15.9, as the market fears that AI could replace traditional advisors in the future, leading to long-term margin compression.
- Insurance Broker Anxiety: Insurance brokers are facing disruption due to the integration of AI-driven tools, with the S&P Insurance Brokers industry index down 4% year-to-date; while the insurance sector remains relationship-driven, there are concerns that AI could erode commissions, impacting brokers' income stability.
- Asset Management Damage: Alternative asset managers are indirectly affected by significant exposure to private software companies, with many large firms down double digits year-to-date, as declining public software valuations raise concerns about their private portfolios, shrinking exit opportunities.
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Japan's LDP Secures Overwhelming Election Victory
- Election Impact: Japan's Prime Minister Sanae Takaichi and her ruling LDP secured a supermajority in the election, controlling over two-thirds of the Lower House, which allows her to freely pursue an agenda of increased spending and suspension of certain food taxes, likely stimulating economic growth further.
- Market Surge: Following the election results, Japanese stocks reached a record high, with the yen strengthening to 156.88 per dollar, reflecting renewed investor confidence and indicating positive market expectations regarding Takaichi's policies.
- U.S. Market Rebound: Major U.S. indexes rebounded post-election, with the S&P 500 rising 1.97% and the Nasdaq Composite climbing 2.18%, driven by strong performances from tech stocks like Nvidia and Oracle, which bolstered global investor confidence.
- Private Credit Concerns: The private credit market faces renewed uncertainty as AI pressures software companies, raising investor concerns about borrower business models and potentially increasing default risks, which could impact overall financial stability.
See More
Private Credit Markets Face AI Disruption Risks
- Increased Pressure on Software Sector: The introduction of new AI tools by Anthropic has triggered a sell-off in software data provider shares, intensifying uncertainty in the private credit market, particularly regarding lending risks to software companies.
- Decline in Asset Management Stocks: Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, and KKR and TPG saw declines of nearly 10% and 7%, respectively, reflecting investor concerns about AI's potential impact on cash flows and default risks.
- Rising Default Risks: UBS Group has warned that in an aggressive disruption scenario, default rates in U.S. private credit could rise to 13%, significantly higher than the projected stress for leveraged loans and high-yield bonds, estimated at 8% and 4%, respectively.
- Liquidity Issues Intensified: Although strains in private credit predate AI concerns, Jeffrey C. Hooke noted that existing liquidity and loan extension issues have been exacerbated by recent developments, adding new challenges to an already pressured sector.
See More
Is Your Retirement Plan Investing in Your Favorite Football Team?
- Fan Ownership: Pro football fans may unknowingly own a piece of their favorite team, in addition to their season tickets and merchandise.
- Team Merchandise: Fans often invest in various team-related items, such as jerseys and stadium cushions, which enhance their connection to the team.
See More
What Exactly Is an Evergreen Fund?
- Emerging Lexicon: Individual investors need to adapt to a new vocabulary related to private investments as a new category of funds is being introduced.
- Access for Retail Clients: Financial advisors are now able to assist retail clients in investing in assets that were previously accessible mainly to institutional investors.
See More
Credit Market Risks Amid AI Disruption
- Rising Default Risks: UBS analysts project that corporate loan defaults could reach between $75 billion and $120 billion over the next year, particularly impacting software and data services firms owned by private equity, thereby exacerbating instability in the credit markets.
- Delayed Market Reaction: Analysts note that the market has been slow to respond to the rapid advancements in AI technology, with many investors failing to timely recalibrate their views on credit evaluations, leading to an underestimation of credit risks that could trigger broader credit tightening.
- Potential Credit Crisis: In a worst-case scenario, default rates could double the baseline estimates, resulting in a sharp decline in liquidity in the credit markets, creating what is known as a 'tail risk' that could severely impact many companies.
- Industry Classification Impact: Mish categorizes companies into three groups, indicating that creators of foundational large language models like Anthropic and OpenAI are likely to emerge as winners, while high-debt private equity-owned software firms face greater survival pressures and may be eliminated in the AI transformation.
See More
AI Trade Sentiment Reverses, Four Major Industries Hit Hard
- Software Sector Hit: The iShares Tech-Expanded Software Sector ETF (NYSE:IGV) has plummeted nearly 20% year-to-date, making it the worst-performing industry, as fears mount that AI tools could disintermediate traditional software providers, causing forward P/E ratios for application software to drop from 35.3 to 23.7 and systems software from 35.5 to 23.3, reflecting market concerns over future earnings durability.
- Brokerage Pressure: Investment banks and brokerage firms are under pressure following the rollout of AI tools by fintech firm Altruist, with forward P/E ratios declining from 24.7 to 15.9, as the market fears that AI could replace traditional advisors in the future, leading to long-term margin compression.
- Insurance Broker Anxiety: Insurance brokers are facing disruption due to the integration of AI-driven tools, with the S&P Insurance Brokers industry index down 4% year-to-date; while the insurance sector remains relationship-driven, there are concerns that AI could erode commissions, impacting brokers' income stability.
- Asset Management Damage: Alternative asset managers are indirectly affected by significant exposure to private software companies, with many large firms down double digits year-to-date, as declining public software valuations raise concerns about their private portfolios, shrinking exit opportunities.
See More
Japan's LDP Secures Overwhelming Election Victory
- Election Impact: Japan's Prime Minister Sanae Takaichi and her ruling LDP secured a supermajority in the election, controlling over two-thirds of the Lower House, which allows her to freely pursue an agenda of increased spending and suspension of certain food taxes, likely stimulating economic growth further.
- Market Surge: Following the election results, Japanese stocks reached a record high, with the yen strengthening to 156.88 per dollar, reflecting renewed investor confidence and indicating positive market expectations regarding Takaichi's policies.
- U.S. Market Rebound: Major U.S. indexes rebounded post-election, with the S&P 500 rising 1.97% and the Nasdaq Composite climbing 2.18%, driven by strong performances from tech stocks like Nvidia and Oracle, which bolstered global investor confidence.
- Private Credit Concerns: The private credit market faces renewed uncertainty as AI pressures software companies, raising investor concerns about borrower business models and potentially increasing default risks, which could impact overall financial stability.
See More
Private Credit Markets Face AI Disruption Risks
- Increased Pressure on Software Sector: The introduction of new AI tools by Anthropic has triggered a sell-off in software data provider shares, intensifying uncertainty in the private credit market, particularly regarding lending risks to software companies.
- Decline in Asset Management Stocks: Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, and KKR and TPG saw declines of nearly 10% and 7%, respectively, reflecting investor concerns about AI's potential impact on cash flows and default risks.
- Rising Default Risks: UBS Group has warned that in an aggressive disruption scenario, default rates in U.S. private credit could rise to 13%, significantly higher than the projected stress for leveraged loans and high-yield bonds, estimated at 8% and 4%, respectively.
- Liquidity Issues Intensified: Although strains in private credit predate AI concerns, Jeffrey C. Hooke noted that existing liquidity and loan extension issues have been exacerbated by recent developments, adding new challenges to an already pressured sector.
See More
