KKR Investments Portfolio Strategy

 

KKR & Co, Inc the global investment management firm has staked its future on its insurance business. KKR collects the insurance premiums from its Global Atlantic insurance business line and uses them for long-term capital investments in private equity, private credit and lending and real estate.

This kind of strategy will drive KKR's future, in Wolfteam Ltd.'s view.

A proprietary investment of sort, since the insurance premiums were not raised from investors in the first place. Second quarter 2024 earnings statement excerpt:

($ 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

The size of the insurance premiums is reflected in the revenues from the Asset Management and Strategic Holdings and Insurance business. The insurance business dwarfs Asset Management and Strategic holdings with 10.3 billion USD in revenue compared to 3.5 billion USD revenue for Asset Management. All this is before international GAAP is applied to net revenue premiums.

The Private Equity business line is the biggest revenue generator netted for KKR & Co:

($ in thousands) 2Q'23 2Q'24 2Q'23 YTD 2Q'24 YTD
Management Fees $ 320,081 $ 350,650 $ 636,422 $ 693,135
Transaction and Monitoring Fees, Net 33,142 16,640 67,416 32,445
Fee Related Performance Revenues — — — —
Fee Related Revenues $ 353,223 $ 367,290 $ 703,838 $ 725,580
Realized Performance Income $ 146,232 $ 327,943 $ 309,284 $ 593,240
Capital Metrics:
Assets Under Management $ 170,139,000 $ 185,265,000 $ 170,139,000 $ 185,265,000
Fee Paying Assets Under Management $ 103,730,000 $ 118,240,000 $ 103,730,000 $ 118,240,000
New Capital Raised (AUM) $ 1,992,000 $ 2,071,000 $ 2,341,000 $ 5,661,000
Capital Invested $ 3,207,000 $ 2,578,000 $ 6,070,000 $ 3,728,000
Uncalled Commitments $ 61,171,000 $ 54,925,000 $ 61,171,000 $ 54,925,000