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01/11 03:24
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call indicates strong financial performance with a 22% increase in fee-related revenues and a 40% rise in monetization activity. Dividend increases and robust AUM growth, particularly in Asia, are positive signals. Management's optimistic guidance on management fee growth and strategic focus on long-term performance further supports a positive outlook. While some responses in the Q&A lacked clarity, the overall sentiment remains positive, suggesting a 2% to 8% stock price increase over the next two weeks.
Fee-related earnings per share $0.92, up 22% year-over-year.
Total operating earnings per share $1.24, up 16% year-over-year.
Adjusted net income per share $1.15, up 19% year-over-year.
Management fees $917 million, up 13% year-over-year driven by fundraising and deployment activities.
Total transaction and monitoring fees $262 million, with capital markets transaction fees at $229 million driven by activity in new and existing portfolio companies.
Fee-related performance revenues $21 million for the quarter.
Total fee-related revenues $1.2 billion, up 22% year-over-year.
Fee-related earnings $823 million, with an FRE margin of 69%.
Insurance segment operating earnings $259 million, in line with expectations.
Strategic holdings operating earnings $31 million, in line to modestly ahead of guidance.
Realized performance income $348 million, contributing to total monetization activity of $566 million, up almost 40% year-over-year.
Private equity portfolio performance Up 4% in the quarter and up 11% over the last 12 months.
Opportunistic real estate portfolio performance Up 2% in the quarter and up 5% over the last 12 months.
Infrastructure performance Up 4% in the quarter and appreciated 13% over the last 12 months.
Leveraged credit composite performance Flat in the quarter and up 7% over the last 12 months.
Alternative credit composite performance Up 3% in the quarter and up 11% over the last 12 months.
Dividend per share Increased to $0.74 per share on an annualized basis, up from $0.50 per share.
Gross unrealized performance income $8.7 billion, up over 25% year-on-year.
Committed but uncalled capital $116 billion, up almost 50% compared to one year ago.
K-Series suite AUM $22 billion, compared to $9 billion a year ago.
New Core Private Equity Investment: Acquisition of Karo Healthcare, increasing strategic holdings portfolio to 19 companies.
K-Series Suite of Vehicles: AUM increased to $22 billion from $9 billion year-over-year.
Private Credit Solutions: Launched two public private credit solutions in partnership with Capital Group.
North America Private Equity Strategy: Raised $31 billion in new capital, with $14 billion from North America 14.
Global Investment Activity: Closed or committed to over $30 billion in new investments, with over half outside the U.S.
Fee-Related Earnings: Fee-related earnings per share increased to $0.92, up 22% year-over-year.
Management Fees: Management fees in Q1 were $917 million, up 13% year-over-year.
Insurance Segment Operating Earnings: Reported $259 million in insurance segment operating earnings, in line with expectations.
Investment Strategy: Focus on global and diversified investment opportunities, particularly in Japan.
Capital Raising Strategy: Maintained conviction in fundraising outlook despite market volatility.
Tariffs Impact: 90% of KKR's AUM has limited to no first-order impact from announced tariffs. However, there are pockets of exposure in the credit portfolio, and individual instances of direct tariff impact may occur.
Supply Chain Challenges: KKR has been actively implementing mitigating measures for supply chain diversification and resilience, which have been a focus since the global pandemic.
Market Volatility: The current market volatility presents both challenges and opportunities. While some sale processes may be delayed, KKR is optimistic about deployment and monetization opportunities.
Capital Raising Efforts: Despite market volatility, KKR remains confident in its fundraising outlook, with no changes to targets and a strong commitment to capital raising.
Economic Factors: The firm is navigating economic uncertainty and volatility, which may impact investment processes but also presents opportunities for attractive investments.
Strategic Holdings Segment: KKR closed on the purchase of additional stakes in three existing core private equity businesses, further enhancing their strategic holdings segment. They also announced the acquisition of Karo Healthcare, increasing their portfolio to 19 companies.
Investment Deployment: KKR has committed over $30 billion in new investments since the start of the year, with more than half outside the U.S., including significant investments in Japan.
Insurance Strategy: KKR is evolving its insurance strategy to include longer-dated alternatives, aiming to drive up overall returns while reducing leverage over time.
K-Series Suite of Vehicles: The K-Series suite of vehicles has grown to $22 billion in AUM, up from $9 billion a year ago, indicating strong traction in private wealth.
Global Atlantic Partnership: KKR's partnership with Japan Post Insurance is expanding, with a new investment of $1 to $2 billion expected.
Q2 Monetization Expectations: KKR expects to generate at least $250 million in monetization-related revenue in Q2, with a total of over $800 million in pending monetizations.
Insurance Operating Earnings Guidance: Insurance operating earnings are expected to remain around $250 million in the next few quarters.
Long-term Financial Guidance: KKR maintains its 2026 guidance across fundraising and financial metrics, indicating confidence in future performance.
Management Fees Stability: Over 90% of KKR's capital is perpetual or committed for an average of eight years, providing stability and visibility for management fees.
Future Capital Raising Outlook: KKR remains confident in its ability to raise scaled capital, with no changes to its fundraising targets despite current market volatility.
Dividend Increase: The dividend was increased to $0.74 per share on an annualized basis, or $18.5 per share per quarter, marking the sixth consecutive year of dividend increases since the corporate structure change.
Share Repurchase Program: None
The earnings call highlights strong financial performance with record fundraising and investment, significant embedded gains, and a robust insurance segment. The Q&A section supports this with positive growth prospects in Asia, strong ROE projections, and confidence in achieving future targets. Despite some uncertainties in management responses, the overall sentiment remains positive, supported by optimistic guidance and strategic growth plans.
KKR's earnings call highlights strategic growth, strong investment management fees, and expanding global partnerships. Despite some management vagueness, the overall sentiment is positive, with robust financial metrics, optimistic guidance, and strategic positioning in emerging markets and technologies. The Q&A section reinforced confidence in asset-based finance and long-term opportunities in private markets. These factors suggest a positive stock price movement.
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