KKR Portfolio Strategy

KKR Inc., the global alternative asset manager has investment focus in technology, infrastructure and insurance. Much of the private equity funds raised by KKR Inc are focused at technology and infrastructure investments, according to Wolfteam Ltd.'s calculations and analysis. In addition KKR is using the insurance premiums fees it gets from the insurance firms it owns  to invest in its private equity, real assets, credit and liquid strategies and principal investments business lines.

Below is an excerpt from KKR's second quarter 2024 earnings report press release detailing its insurance segment performance:

INSURANCE SEGMENT

• Net Investment Income: Net Investment Income of $1.5 billion in the quarter reflects growth in the investment portfolio
attributable to strong net inflows. Investment portfolio yields in the quarter reflect higher levels of cash alongside more liquid
investments yet to be rotated, as well as recent deployment in investments with lower near-term yields
• Net Cost of Insurance: Net Cost of Insurance totaled $1.1 billion in the quarter, driven primarily by new business growth and the
associated higher funding costs, as well the routine run off of older business that was originated in a lower cost environment
• Highlights:
• Global Atlantic AUM totals $183 billion, of which $139 billion is Credit AUM
• Inflows in the quarter were primarily driven by individual sales and flow reinsurance
• Global Atlantic, together with KKR, completed multiple strategic "firsts" in the quarter and shortly after quarter end, including:
first real estate equity multifamily investment, first investment with the infrastructure team and first capital markets
transaction fee generative investment
• KKR owned 100% of Global Atlantic beginning 1Q'24. The financial results for all quarters prior to 2024 reflect KKR's ~63%
ownership
Insurance Segment

Global Atlantic, the insurance subsidiary of KKR has 183 billion USD of assets under management, 139 billion USD of which are invested in credit AUM.

Here are KKR's second quarter 2024 results in detail:

($ 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

Private equity remains the leading segment in terms of collected fees for KKR:

Fee Paying Assets Under Management Rollforward
($ in millions) Private Equity Real Assets Credit and Liquid Strategies Total
Beginning Balance $ 116,287 $ 115,649 $ 238,667 $ 470,603
New C apital R ais ed 2,442 15,272 11,471 29,185
D is tributions and O ther (585) (3,794) (9,087) (13,466)
C hange in Value 96 (553) 1,455 998
Ending Balance $ 118,240 $ 126,574 $ 242,506 $ 487,320

AUM: Increased 1% quarter-over-quarter and increased 9% year-over-year to $185 billion with organic new capital raised of $2
billion in the quarter and $6 billion YTD
• New capital raised in the quarter was primarily driven by K-Series PE, private equity vehicles designed for private wealth
clients, and Ascendant, a U.S. middle market traditional private equity strategy
• Realizations: Carried Interest in 2Q driven primarily by traditional private equity secondary sales, strategic transactions and
offshore K-Series investment performance
• Capital Invested: $3 billion in the quarter and $4 billion YTD. In 2Q, deployment was driven by traditional private equity in the
U.S. and as of today, approximately $9 billion of investments are expected to close in 2H'24
• Performance: The traditional private equity portfolio appreciated 18% in the LTM
Asset Management Segment − Private Equity
($ 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
Note: See Appendix for endnotes about our private equity business line and other important information.

KKR invests its private equity funds assets predominantly in technology and infrastructure. The insurance premium fees go predominantly into credit and lending. KKR uses its insurance premiums, which are long-term in nature to invest in its credit and lending and private equity business lines for long-term capital appreciation, akin to the same strategy employed by Warren Buffett controlled Berkshire Hathaway, which plows the insurance fees it collects from its insurance business lines into its energy, retail, manufacturing and even public stocks like Apple, Coca Cola, Bank of America, Occidental Petroleum etc.