KKR (KKR) Bernstein 42nd Annual Strategic Decisions Conference summary

Market environment and performance

• Despite negative sentiment, recent results show record fee-related earnings, net income, and 23% growth in management fees over the last 12 months.

• Monetization-related revenue rose over 50% in Q1, with all operating metrics up 20%+ year-over-year.

• Inflation and rates are expected to remain higher for longer, but the current environment is viewed as normal compared to historical averages.

• The firm maintains a constructive outlook, citing global investment opportunities across asset classes.

• Portfolio is mature, diversified, and global, supporting strong realization activity.

Portfolio realizations and deployment

• Recent exits include OneStream Software (4.5x), CoolIT Systems (15x), Atlantic Aviation (2x), Hyundai Marine (7x), and Kokusai Electric (20x).

• Realizations are broad-based: to financial sponsors, strategics, and public markets.

• Monetization delays in the industry are attributed to overpaying for assets in 2021-2022, leading to longer hold periods.

• Linear pacing and diversification in deployment are emphasized to avoid concentration risk.

Retail and wealth management

• Wealth business represents 5% of AUM, growing 80% in the last year to $38 billion.

• Seven out of eight vehicles had positive inflows in Q1; outflows were minimal and related to structural changes.

• 85% of capital in this channel is in private equity and infrastructure, with net growth continuing.

• New products with Capital Group target lower net worth clients, structured as interval funds with a 60/40 public/private split.

• Distribution outside the U.S. is about 50% built, with significant growth potential in Europe and Asia.