KKR & Co Inc, KKR the second largest private equity, private credit, real estate, infrastructure asset management firm in the world invests large part of its newly raised assets in artificial intelligence, AI technology related investments.
Also large part of KKR's newly raised assets in the last 7 years have been invested in AI technology related assets like private equity leveraged buyouts of AI technology companies, private credit lending to AI technology companies, investing in AI data centers real estate and energy companies AI related infrastructure.
The KKR private equity AI buyouts are leveraged, because only around 30 % of the deals are financed with equity down payment, the rest is debt via high yield bonds or bank lending. The KKR private credits to AI technology companies are also essentially leveraged since the private credits are given out at 7 % to 15 % interest rates. There is also secularization investing. KKR's real estate AI data centers and AI related investments are also leveraged because they are usually to a large extent financed with debt.
On top of that all AI technology investments are operationally leveraged since usually little hard assets are needed and the initial amount of capital is not great. With the advent of AI data centers, however, such businesses are becoming very capital intensive.
That said, AI is still operationally leveraged.
KKR has made a large, concentrated bet on AI. Since the investments of KKR in AI are double leveraged, once using borrowed financial means to invest in AI, the second part AI is operationally leveraged, if it wins, KKR stands to win big.
In an artificial intelligence, AI positive case, KKR's market capitalization could reach 302 billion USDs.
If on the other hand the current AI boom turns out to be a bubble and bursts with the Nasdaq Composite falling from peak to trough more than 65 %, KKR's market capitalization could fall to 50 billion USDs, from KKR's current 118 billion USDs market capitalization, according to Wolfteam Ltd.'s projections and estimates.
No comments:
Post a Comment