KKR Strategy And Warren Buffett's Berkshire Hathaway

KKR & Co Inc, the private equity investment investment group is trying to model its structure along the lines of Warren Buffett's investment conglomerate Berkshire Hathaway, by using the stable premiums coming from insurance to invest long-term in private equity and credit and thus yield better than the private equity industry results, in Wolfteam, Ltd.'s view.

Revenues from insurance for KKR surpass asset management revenues by almost three times in the last reported 2nd quarter of 2024.

($ 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 912,147,881 932,046,386 913,068,567 928,593,77

The stable insurance premiums ensure a stable business model for KKR. By getting the stable flows of insurance premiums KKR can invest in its private equity and private credit/lending business with a long-term perspective.

This long-term value creation is reflected in the 102.26 billion USD market capitalization of KKR. KKR's 8 billion USD revenue and net profit of 2.5 billion USD on average for the last 5 years also speaks volumes of the shrewd execution of the management strategy of KKR.

Warren Buffett on a yearly weighted average is arguably the world's richest man for the last 20 years. Which speaks volumes of Buffett's insurance lead business strategy application at the lead and controlled by Warren Buffett Berkshire Hathaway holding. Far from a copycat KKR & Co, Inc is executing a shrewd insurance lead private equity and private credit lead business and asset management strategy.