KKR Investment Portfolio

KKR & Co, Inc the global investment management firm has most of its assets under management in private equity, followed by real estate and private credit and liquid strategies business line. KKR's asset management mix is the sole reason of its out-performance, in Wolfteam Ltd.'s view.

The earnings from the three segments follow a similar order.

The revenue from the insurance unit, not netted, however, dwarfs the other three segments.

The following is an excerpt from KKR's second quarter 2024 earnings statement.

($ in thousands, except per share data) 2Q'23 2Q'24 2Q'23 YTD 2Q'24 YTD
Revenues
Asset Management and Strategic Holdings $ 1,451,344 $ 1,560,449 $ 2,577,378 $ 3,516,917
Insurance 2,175,174 2,611,461 4,176,622 10,311,731
Total Revenues $ 3,626,518 $ 4,171,910 $ 6,754,000 $ 13,828,648
Expenses
Asset Management and Strategic Holdings $ 970,293 $ 1,222,960 $ 1,781,801 $ 2,840,929
Insurance 2,152,189 2,723,369 4,200,764 10,418,344
Total Expenses $ 3,122,482 $ 3,946,329 $ 5,982,565 $ 13,259,273
Total Investment Income (Loss) - Asset Management and Strategic Holdings $ 946,977 $ 984,624 $ 1,088,013 $ 2,003,881
Income Tax E xpens e (B enefit) 324,955 216,969 473,702 486,170
R edeemable Noncontrolling Interes ts (1,740) 29,666 (9,043) 62,344
Noncontrolling Interes ts 266,086 295,644 193,083 674,602
P referred S tock D ividends 17,249 — 34,499 —
Net Income (Loss) - KKR Common Stockholders $ 844,463 $ 667,926 $ 1,167,207 $ 1,350,140
Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock
Basic $ 0.98 $ 0.75 $ 1.36 $ 1.52
Diluted $ 0.94 $ 0.72 $ 1.32 $ 1.45
Weighted Average Shares of Common Stock Outstanding
Basic 861,553,274 887,394,513 861,332,121 886,200,169
Diluted 912,147,881 932,046,386 913,068,567 928,593,777

GAAP reconciled the revenues from insurance are much less, because they are netted from costs.

KKR are using the stable, long-term premiums from the insurance segment to finance investments in private equity, real estate and private credit.

The strategy works quite well as evidenced by the 106.89 billion market capitalization of KKR.

That said, private equity remains the largest business line in terms of core revenue, followed by real estate and private credit and the principal activities business.

KKR has raised multitudes of funds with emphasis on North America, but also some very large European and Asian funds. KKR has raised large technology and healthcare funds.