KKR & Co. Inc. Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Capital Raising: Raised $28 billion in Q4, $129 billion full-year 2025 (highest in 50-year history). K Series products raised $4.5 billion in Q4, over $16 billion full-year 2025. Strategic partnership with Capital Group and ABF market shift.
• Monetizations and Deployment: 2025 monetization $2 billion, gross realized carried interest up 30%. Deployed $32 billion in Q4, $95 billion full-year 2025, up 13% YOY. Asia investment up over 70%, infrastructure investment $15 billion (record), credit deployment $44 billion.
• Acquisition of Arctos: Acquired Arctos, leading in sports franchise stakes and GP solutions ($15 billion AUM). Creates KKR Solutions vertical, expected to reach $100 billion+ AUM. Aligns with strategic M&A framework: access to large markets, long-dated capital, complementary capabilities, distribution synergy, cultural alignment.

Segment Performance

• Fee-related earnings: This quarter, fee-related earnings per share were $1.08, total operating earnings per share $1.42, and adjusted net income per share $1.12. Management fees in the quarter were $1.1 billion, up 24% YOY, with private equity, real assets, and credit each contributing approximately one-third of total management fees. Total transaction and monitoring fees were $269 million, capital markets fees $225 million, and fee-related performance revenues $34 million.
• Insurance segment: Operating earnings in Q4 were $268 million. Total insurance economics net of compensation in 2025 were $1.9 billion, up 15%.
• Strategic Holdings: Operating earnings were $44 million in Q4, with full-year 2025 more than doubling from 2024 and tracking towards over $350 million in 2026.
• Asset management investing earnings: Realized performance income was $528 million, realized investment income $27 million, total monetization over $550 million. Embedded gains at Dec 31 were $19 billion, a record.

Guidance

• Confident to meaningfully exceed fundraising and FRE per share targets.
• Presuming constructive monetization, expect $7+ per share of adjusted net income. If environment deteriorates, may delay monetization but aim for more earnings in future.
• Increase annual dividend from $0.74 to $0.78 per share, effective Q1 2026.

Risks

• Market Volatility: Impact on monetization and investment performance.
• Concentration Risks: Over-concentration in certain vintages or asset classes.
• Geopolitical and Economic Uncertainties: Tariffs, inflation, interest rates affecting portfolio performance and deployment.

Q: Glenn Schorr asked about re-underwriting private portfolios, tariffs, and AI.

A: Scott Nuttall and Robert Lewin responded, discussing low exposure to tariffs, focus on AI-driven risks and opportunities, and portfolio construction.

Q: Craig Siegenthaler inquired about record investment results and linear deployment model.

A: Craig Larson and Scott Nuttall talked about broad-based deployment, diversification, and Asia/infrastructure activity.

Q: Alexander Blostein asked about building blocks for FRE target.

A: Robert Lewin discussed management fees, capital markets, and operating leverage.

Q: Mike Brown asked about investment income.

A: Robert Lewin spoke about expected increase in realized investment income and capital allocation strategy.

Q: Benjamin Budish asked about Global Atlantic trends.

A: Robert Lewin discussed Global Atlantic's accrued income and long-term outlook.

Q: William Katz asked about wealth management flows and deployment assumptions.

A: Craig Larson and Scott Nuttall addressed wealth fund growth and deployment expectations.

Q: Brennan Hawken asked about Strategic Holdings ramp.

A: Robert Lewin talked about Strategic Holdings' growth drivers and future disclosure.

Q: Michael Cyprys asked about AI deployment in the firm and portfolio companies.

A: Craig Larson and Scott Nuttall discussed AI teams, portfolio best practices, and investment committee lessons.

Q: Patrick Davitt asked about Arctos mix and secondary growth.

A: Robert Lewin explained Arctos' sports and GP solutions mix and secondary growth potential.

Q: Brian Bedell asked about operating earnings goal and Arctos close timing.

A: Robert Lewin addressed operating earnings components and Arctos close timing.

Q: John Barnidge asked about KKR Solutions sports business size.

A: Robert Lewin and Scott Nuttall discussed KKR Solutions growth potential and sports business without league rule changes.

Q: Arnaud Giblat asked about Global Atlantic flow mix impact.

A: Robert Lewin discussed Global Atlantic's real estate mix and investment rationale.