KKR Q4 2025 KKR & Co Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 KKR & Co Inc Earnings Call
Speaker #1: Ladies and gentlemen, thank you for standing by. Welcome to KKR's Q4, 2025 earnings conference call. During today's presentation, all parties will be in a listen-only mode.
Speaker #1: Following management's prepared remarks, the conference will be open for questions. If anyone conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.
Speaker #1: I will now hand the call over to Craig Larson, partner and head of investor relations for KKR. Craig, please go ahead.
Speaker #2: Thank you, fourth quarter 2025 operator. Good morning, everyone. Welcome to our earnings call. This morning, as usual, I'm joined by Rob Lewin, our Chief Financial Officer, and Scott Nuttall, our Co-Chief Executive Officer.
Craig Larson: Thank you, operator. Good morning, everyone. Welcome to our Q4 2025 Earnings Call. This morning, as usual, I'm joined by Rob Lewin, our Chief Financial Officer, and Scott Nuttall, our Co-Chief Executive Officer. We would like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our press release, which is available on the Investor Center section at kkr.com. As a reminder, we report our segment numbers on an adjusted share basis. We will refer to forward-looking statements on the call, which do not guarantee future events or performance, so please refer to our earnings release and our SEC filings for cautionary factors about these statements. Beginning first with our headline financial metrics.
Craig Larson: Thank you, operator. Good morning, everyone. Welcome to our Q4 2025 Earnings Call. This morning, as usual, I'm joined by Rob Lewin, our Chief Financial Officer, and Scott Nuttall, our Co-Chief Executive Officer. We would like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our press release, which is available on the Investor Center section at kkr.com. As a reminder, we report our segment numbers on an adjusted share basis. We will refer to forward-looking statements on the call, which do not guarantee future events or performance, so please refer to our earnings release and our SEC filings for cautionary factors about these statements. Beginning first with our headline financial metrics.
Craig Larson: Thank you, operator. Good morning, everyone. Welcome to our Q4 2025 Earnings Call. This morning, as usual, I'm joined by Rob Lewin, our Chief Financial Officer, and Scott Nuttall, our Co-Chief Executive Officer. We would like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our press release, which is available on the Investor Center section at kkr.com. As a reminder, we report our segment numbers on an adjusted share basis. We will refer to forward-looking statements on the call, which do not guarantee future events or performance, so please refer to our earnings release and our SEC filings for cautionary factors about these statements. Beginning first with our headline financial metrics.
Speaker #2: We would like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our press release, which is available on the investor center section at KKR.com.
Speaker #2: And as a reminder, we report our segment numbers on an adjusted share basis. We will refer to forward-looking statements on the call, which do not guarantee future events or performance.
Speaker #2: our earnings release and our SEC So please refer to filings for cautionary factors about these statements. So beginning first with our headline financial metrics.
Speaker #2: This quarter, we're pleased to be reporting $1.08 of fee-related earnings per share. $1.42 of total operating earnings per share. And $1.12 of share. The $1.12 figure includes the carried interest repayment obligation we reviewed on our last earnings call and excluding this, A&I per share for Q4 was $1.30.
Craig Larson: This quarter, we're pleased to be reporting $1.08 of fee-related earnings per share, $1.42 of total operating earnings per share, and $1.12 of adjusted net income per share. The $1.12 figure includes the carried interest repayment obligation we reviewed on our last earnings call, and excluding this, ANI per share for Q4 was $1.30. Management fees in the quarter were $1.1 billion. That's up 24% on a year-over-year basis, and that's driven really by all of our fundraising initiatives as well as the continued deployment across the firm. Excluding catch-up fees in both periods, management fees grew by 22%. As KKR has grown, our management fee profile has become meaningfully more diversified.
Craig Larson: This quarter, we're pleased to be reporting $1.08 of fee-related earnings per share, $1.42 of total operating earnings per share, and $1.12 of adjusted net income per share. The $1.12 figure includes the carried interest repayment obligation we reviewed on our last earnings call, and excluding this, ANI per share for Q4 was $1.30. Management fees in the quarter were $1.1 billion. That's up 24% on a year-over-year basis, and that's driven really by all of our fundraising initiatives as well as the continued deployment across the firm. Excluding catch-up fees in both periods, management fees grew by 22%. As KKR has grown, our management fee profile has become meaningfully more diversified.
Craig Larson: This quarter, we're pleased to be reporting $1.08 of fee-related earnings per share, $1.42 of total operating earnings per share, and $1.12 of adjusted net income per share. The $1.12 figure includes the carried interest repayment obligation we reviewed on our last earnings call, and excluding this, ANI per share for Q4 was $1.30. Management fees in the quarter were $1.1 billion. That's up 24% on a year-over-year basis, and that's driven really by all of our fundraising initiatives as well as the continued deployment across the firm. Excluding catch-up fees in both periods, management fees grew by 22%. As KKR has grown, our management fee profile has become meaningfully more diversified.
Speaker #2: Management fees in the quarter were $1.1 billion—that's up 24% on a year-over-year basis, and that's driven really by all of our fundraising initiatives, as well as the continued deployment across the firm.
Speaker #2: Excluding catch-up fees in both periods, management fees grew by 22%. And as KKR has grown, our management fee profile has become meaningfully more diversified.
Speaker #2: Looking at full year 2025, management fees were 4.1 billion, with private equity, real assets, and credit each contributing approximately one-third of total fees. Total transaction and monitoring fees were $269 million in the quarter, capital markets fees came in at $225 million, driven by activity—excuse me—across private equity, credit, and infrastructure.
Craig Larson: Looking at full year 2025, management fees were $4.1 billion, with private equity, real assets, and credit each contributing approximately 1/3 of total fees. Total transaction and monitoring fees were $269 million in the quarter. Capital markets fees came in at $225 million, driven by activity, excuse me, across private equity, credit, and infrastructure. Fee-related performance revenues in the quarter were $34 million. Turning to expenses, fee-related compensation was again at the midpoint of our guided range, or 17.5%, and other operating expenses for the quarter came in at $205 million.
Craig Larson: Looking at full year 2025, management fees were $4.1 billion, with private equity, real assets, and credit each contributing approximately 1/3 of total fees. Total transaction and monitoring fees were $269 million in the quarter. Capital markets fees came in at $225 million, driven by activity, excuse me, across private equity, credit, and infrastructure. Fee-related performance revenues in the quarter were $34 million. Turning to expenses, fee-related compensation was again at the midpoint of our guided range, or 17.5%, and other operating expenses for the quarter came in at $205 million.
Craig Larson: Looking at full year 2025, management fees were $4.1 billion, with private equity, real assets, and credit each contributing approximately 1/3 of total fees. Total transaction and monitoring fees were $269 million in the quarter. Capital markets fees came in at $225 million, driven by activity, excuse me, across private equity, credit, and infrastructure. Fee-related performance revenues in the quarter were $34 million. Turning to expenses, fee-related compensation was again at the midpoint of our guided range, or 17.5%, and other operating expenses for the quarter came in at $205 million.
Speaker #2: Million. Turning to expenses, the quarter was $34 million. And fee-related performance revenues in the fee-related compensation was again at the midpoint of our guided range, at 17.5%.
Speaker #2: And other operating expenses for the quarter came in at $205 million. So in total, fee-related earnings were $972 15% year-over-year. And our FRE margin was a healthy million, which is up 68% for the quarter, and just over 69% for the full year 2025.
Craig Larson: So in total, fee-related earnings were $972 million, which is up 15% year-over-year, and our FRE margin was a healthy 68% for the quarter and just over 69% for the full year 2025. Insurance segment operating earnings in Q4 were $268 million. As a reminder, we report the insurance investment portfolio largely based on cash outcomes. So to give you a sense of the embedded profitability here, our insurance operating earnings would have been approximately $100 million higher in Q4 if we'd included the impact of marks on our investments, where a significant portion of the return relates to appreciation and not just cash yields, with around 50 of that $100 million coming from a portfolio that was purchased in the quarter that was subsequently marked up.
Craig Larson: So in total, fee-related earnings were $972 million, which is up 15% year-over-year, and our FRE margin was a healthy 68% for the quarter and just over 69% for the full year 2025. Insurance segment operating earnings in Q4 were $268 million. As a reminder, we report the insurance investment portfolio largely based on cash outcomes. So to give you a sense of the embedded profitability here, our insurance operating earnings would have been approximately $100 million higher in Q4 if we'd included the impact of marks on our investments, where a significant portion of the return relates to appreciation and not just cash yields, with around 50 of that $100 million coming from a portfolio that was purchased in the quarter that was subsequently marked up.
Craig Larson: So in total, fee-related earnings were $972 million, which is up 15% year-over-year, and our FRE margin was a healthy 68% for the quarter and just over 69% for the full year 2025. Insurance segment operating earnings in Q4 were $268 million. As a reminder, we report the insurance investment portfolio largely based on cash outcomes. So to give you a sense of the embedded profitability here, our insurance operating earnings would have been approximately $100 million higher in Q4 if we'd included the impact of marks on our investments, where a significant portion of the return relates to appreciation and not just cash yields, with around 50 of that $100 million coming from a portfolio that was purchased in the quarter that was subsequently marked up.
Speaker #2: Insurance segment operating earnings in Q4 were $268 million. As a reminder, we report the insurance investment portfolio largely based on cash outcomes. So to give you a sense of the embedded profitability here, our insurance operating earnings would have been approximately $100 million higher in Q4 if we'd included the impact of marks on our investments where a significant portion of the return relates to appreciation and not just cash yields, with around 50 of that $100 million coming from a portfolio that was purchased in the quarter that was subsequently marked out.
Speaker #2: So said another way, if you included what we think of as the more recurring performance in the portfolio, insurance operating earnings would have been approximately $320 million in Q4.
Craig Larson: So said another way, if you included what we think of as the more recurring performance in the portfolio, Insurance Operating Earnings would have been approximately $320 million in Q4. And one more point on Global Atlantic. I'd like to turn your attention to page 20 in our earnings release. We introduced and walked through this supplemental page on our last earnings call. As a reminder here, insurance segment operating earnings alone do not capture the impact of Global Atlantic, recognizing the economics that show up in our asset management segment. So on this page, on the right-hand side, we detail the management fees we receive under our investment management agreement, fees from Ivy-related vehicles, where we have over $50 billion of AUM that wouldn't exist without GA, as well as GA-related capital market fees.
Craig Larson: So said another way, if you included what we think of as the more recurring performance in the portfolio, Insurance Operating Earnings would have been approximately $320 million in Q4. And one more point on Global Atlantic. I'd like to turn your attention to page 20 in our earnings release. We introduced and walked through this supplemental page on our last earnings call. As a reminder here, insurance segment operating earnings alone do not capture the impact of Global Atlantic, recognizing the economics that show up in our asset management segment. So on this page, on the right-hand side, we detail the management fees we receive under our investment management agreement, fees from Ivy-related vehicles, where we have over $50 billion of AUM that wouldn't exist without GA, as well as GA-related capital market fees.
Craig Larson: So said another way, if you included what we think of as the more recurring performance in the portfolio, Insurance Operating Earnings would have been approximately $320 million in Q4. And one more point on Global Atlantic. I'd like to turn your attention to page 20 in our earnings release. We introduced and walked through this supplemental page on our last earnings call. As a reminder here, insurance segment operating earnings alone do not capture the impact of Global Atlantic, recognizing the economics that show up in our asset management segment. So on this page, on the right-hand side, we detail the management fees we receive under our investment management agreement, fees from Ivy-related vehicles, where we have over $50 billion of AUM that wouldn't exist without GA, as well as GA-related capital market fees.
Speaker #2: And one more point on global Atlantic. I'd like to turn your attention to page 20 in our earnings release. We introduced and walked through the supplemental page on our last earnings call.
Speaker #2: As a reminder here, insurance segment operating earnings alone do not capture the impact of global Atlantic recognizing the economics that show up in our asset management segment.
Speaker #2: So on this page on the right-hand side, we detail the management fees we receive under our investment management agreement, fees from IV-related vehicles, where we have over $50 billion of AUM that wouldn't exist without GA, as well as GA-related capital markets fees.
Speaker #2: Taken together, as you see on the page, total insurance economics in 2025 were $1.9 billion net of compensation, and that figure is up 15% for the year.
Craig Larson: Taken together, as you see on the page, total insurance economics in 2025 were $1.9 billion net of compensation, and that figure is up 15% for the year. Strategic Holdings operating earnings were $44 million in Q4, and on a full year basis, they've more than doubled compared to 2024. And perhaps more importantly, we continue to track nicely towards our expected $350+ million of operating earnings looking forward to 2026. So putting that all together, total operating earnings came in at $1.42 per share, and these more durable and recurring earnings drove 85% of our total pre-tax segment earnings, again, looking at the last twelve months. Now, moving on to investing earnings within our asset management segment. Realized Performance Income was $528 million.
Craig Larson: Taken together, as you see on the page, total insurance economics in 2025 were $1.9 billion net of compensation, and that figure is up 15% for the year. Strategic Holdings operating earnings were $44 million in Q4, and on a full year basis, they've more than doubled compared to 2024. And perhaps more importantly, we continue to track nicely towards our expected $350+ million of operating earnings looking forward to 2026. So putting that all together, total operating earnings came in at $1.42 per share, and these more durable and recurring earnings drove 85% of our total pre-tax segment earnings, again, looking at the last twelve months. Now, moving on to investing earnings within our asset management segment. Realized Performance Income was $528 million.
Craig Larson: Taken together, as you see on the page, total insurance economics in 2025 were $1.9 billion net of compensation, and that figure is up 15% for the year. Strategic Holdings operating earnings were $44 million in Q4, and on a full year basis, they've more than doubled compared to 2024. And perhaps more importantly, we continue to track nicely towards our expected $350+ million of operating earnings looking forward to 2026. So putting that all together, total operating earnings came in at $1.42 per share, and these more durable and recurring earnings drove 85% of our total pre-tax segment earnings, again, looking at the last twelve months. Now, moving on to investing earnings within our asset management segment. Realized Performance Income was $528 million.
Speaker #2: Strategic holdings operating earnings were $44 million in Q4, and on a full year basis, they've more than doubled compared to 2024. And perhaps more importantly, we continue to track nicely towards our expected $350-plus million of operating earnings looking forward to 2026.
Speaker #2: So putting that all together, total operating earnings came in at $1.42 per share. And these more durable and recurring earnings drove 85% of our total pre-tax segment earnings again looking at the last 12 months.
Speaker #2: Now moving on to investing earnings within our asset management segment, realized performance income was $528 million. That excludes the impact of the carried interest repayment obligation.
Craig Larson: That excludes the impact of the carried interest repayment obligation, and realized investment income was 27, bringing total monetization activity to north of $550 million. This activity was driven by a combination of public secondary sales, strategic transactions, dividends, and interest income, as well as the annual performance fee for Marshall Wace. After interest expense and taxes, adjusted net income was just over $1 billion for Q4, or the $1.12 per share figure I mentioned a few minutes ago. Turning to investment performance. Page 10 of the earnings release details the continued performance we're seeing across asset classes, both in Q4 as well as over 2025. And given our investment performance really over a long period of time, in turn, you're seeing record-embedded gains across the firm. Now, this is an important point for us.
Craig Larson: That excludes the impact of the carried interest repayment obligation, and realized investment income was 27, bringing total monetization activity to north of $550 million. This activity was driven by a combination of public secondary sales, strategic transactions, dividends, and interest income, as well as the annual performance fee for Marshall Wace. After interest expense and taxes, adjusted net income was just over $1 billion for Q4, or the $1.12 per share figure I mentioned a few minutes ago. Turning to investment performance. Page 10 of the earnings release details the continued performance we're seeing across asset classes, both in Q4 as well as over 2025. And given our investment performance really over a long period of time, in turn, you're seeing record-embedded gains across the firm. Now, this is an important point for us.
Craig Larson: That excludes the impact of the carried interest repayment obligation, and realized investment income was 27, bringing total monetization activity to north of $550 million. This activity was driven by a combination of public secondary sales, strategic transactions, dividends, and interest income, as well as the annual performance fee for Marshall Wace. After interest expense and taxes, adjusted net income was just over $1 billion for Q4, or the $1.12 per share figure I mentioned a few minutes ago. Turning to investment performance. Page 10 of the earnings release details the continued performance we're seeing across asset classes, both in Q4 as well as over 2025. And given our investment performance really over a long period of time, in turn, you're seeing record-embedded gains across the firm. Now, this is an important point for us.
Speaker #2: $27, bringing total monetization activity to north of And realized investment income was $550 million. This activity was driven by a combination of public secondary sales and strategic transactions, dividends, and interest income, as well as the annual performance fee from Marshall Wase.
Speaker #2: After interest expense and taxes, adjusted net income was just over a billion for Q4, or the $1.12 per share figure I mentioned a few minutes ago.
Speaker #2: Turning to investment performance, page 10 of the earnings release details the continued performance we're seeing across asset classes both in Q4 as well as over 2025.
Speaker #2: And given our investment performance really over a long period of time, in turn, you're seeing record embedded gains across the firm. Now, this is an important point for us.
Speaker #2: Total embedded gains—so that's gross carry together with the gains that sit on our balance sheet across asset management and strategic holdings—were $19 billion at 12/31.
Craig Larson: Total embedded gains, so that's gross carry, together with the gains that sit on our balance sheet across Asset Management and Strategic Holdings, were $19 billion at 31 December. That's a record figure for us. Even with the gains that we've been realizing, total embedded gains have continued to scale at a healthy rate. That $19 billion number is up 19% compared to one year ago, and it's up over 50% compared to two years ago. Now let's turn to fundraising, which has continued to be a real bright spot for us. We raised $28 billion of new capital in the quarter, bringing full-year capital raise to $129 billion. That's the highest fundraising year in our 50-year history, and is almost double where we were as a firm two years ago.
Craig Larson: Total embedded gains, so that's gross carry, together with the gains that sit on our balance sheet across Asset Management and Strategic Holdings, were $19 billion at 31 December. That's a record figure for us. Even with the gains that we've been realizing, total embedded gains have continued to scale at a healthy rate. That $19 billion number is up 19% compared to one year ago, and it's up over 50% compared to two years ago. Now let's turn to fundraising, which has continued to be a real bright spot for us. We raised $28 billion of new capital in the quarter, bringing full-year capital raise to $129 billion. That's the highest fundraising year in our 50-year history, and is almost double where we were as a firm two years ago.
Craig Larson: Total embedded gains, so that's gross carry, together with the gains that sit on our balance sheet across Asset Management and Strategic Holdings, were $19 billion at 31 December. That's a record figure for us. Even with the gains that we've been realizing, total embedded gains have continued to scale at a healthy rate. That $19 billion number is up 19% compared to one year ago, and it's up over 50% compared to two years ago. Now let's turn to fundraising, which has continued to be a real bright spot for us. We raised $28 billion of new capital in the quarter, bringing full-year capital raise to $129 billion. That's the highest fundraising year in our 50-year history, and is almost double where we were as a firm two years ago.
Speaker #2: That's a record figure for us. And even with the gains that we've been realizing, total embedded gains have continued to scale at a healthy rate.
Speaker #2: That $19 billion number is up 19% compared to one year ago. And it's up over 50% compared to two years ago. Now let's be a real bright spot for us.
Speaker #2: We raised $28 billion of new capital in the quarter, bringing full-year capital raised to $129 billion. That's the highest fundraising year in our 50-year history.
Speaker #2: We raised $28 billion of new capital in the quarter, bringing full year capital raise to $129 billion. That's the highest fundraising year in our turn to fundraising, which has continued to almost double where we were as a firm two years ago.
Speaker #2: And we're seeing continued demand really across the full breadth of asset classes and regions. Momentum continues to be strong in credit, with a record 68 billion raised across the platform in 2025, driven by our insurance business more broadly.
Craig Larson: And we're seeing continued demand really across the full breadth of asset classes and regions. Momentum continues to be strong in credit, with a record $68 billion raised across the platform in 2025, driven by our asset-based finance business as well as our insurance business more broadly. And spending a minute on Global Atlantic's third-party capital fundraising, we held the final close of our Ivy 3 sidecar vehicle in the quarter, bringing total capital raised here to $4.5 billion... and when you combine this with the $2 billion commitment from Japan Post Insurance that we discussed last quarter, we now have approximately $6.5 billion of third-party capital capacity. And for some context, Ivy II raised a total of $2.7 billion of third-party capital in 2023.
Craig Larson: And we're seeing continued demand really across the full breadth of asset classes and regions. Momentum continues to be strong in credit, with a record $68 billion raised across the platform in 2025, driven by our asset-based finance business as well as our insurance business more broadly. And spending a minute on Global Atlantic's third-party capital fundraising, we held the final close of our Ivy 3 sidecar vehicle in the quarter, bringing total capital raised here to $4.5 billion... and when you combine this with the $2 billion commitment from Japan Post Insurance that we discussed last quarter, we now have approximately $6.5 billion of third-party capital capacity. And for some context, Ivy II raised a total of $2.7 billion of third-party capital in 2023.
Craig Larson: And we're seeing continued demand really across the full breadth of asset classes and regions. Momentum continues to be strong in credit, with a record $68 billion raised across the platform in 2025, driven by our asset-based finance business as well as our insurance business more broadly. And spending a minute on Global Atlantic's third-party capital fundraising, we held the final close of our Ivy 3 sidecar vehicle in the quarter, bringing total capital raised here to $4.5 billion... and when you combine this with the $2 billion commitment from Japan Post Insurance that we discussed last quarter, we now have approximately $6.5 billion of third-party capital capacity. And for some context, Ivy II raised a total of $2.7 billion of third-party capital in 2023.
Speaker #2: And spending a minute on fundraising, we held the final close of global Atlantic's third-party capital our IV3 sidecar vehicle in the quarter, bringing total capital raised here at a $4.5 billion.
Speaker #2: And when you combine this with the $2 billion commitment from Japan Post Insurance that we discussed last quarter, we now have approximately $6.5 billion of third-party capital capacity.
Speaker #2: And for some context, $2.7 billion of third-party IV2 raised a total of capital in 2023. So you've seen a meaningful increase in scale. Reinforcing our view that client demand for insurance-related strategies just continues to deepen.
Craig Larson: So you've seen a meaningful increase in scale, reinforcing our view that client demand for insurance-related strategies just continues to deepen. And as a reminder here, the Ivy sidecar vehicles pay fee and carry, similar to a drawdown credit or private equity fund, and also allow us to grow GA in a capital-efficient way. And once this $6.5 billion of capital is fully deployed, we would expect it to translate into more than $65 billion of fee-paying AUM over time. Now turning to activity in private equity and real assets. Our North America Private Equity Fund now has over $19 billion of committed capital, and we're less than 1 year since its first close, already eclipsing the prior fund. And our Global Infrastructure Flagship Fund now has nearly $16 billion of commitments, also on track to be larger than its predecessor.
Craig Larson: So you've seen a meaningful increase in scale, reinforcing our view that client demand for insurance-related strategies just continues to deepen. And as a reminder here, the Ivy sidecar vehicles pay fee and carry, similar to a drawdown credit or private equity fund, and also allow us to grow GA in a capital-efficient way. And once this $6.5 billion of capital is fully deployed, we would expect it to translate into more than $65 billion of fee-paying AUM over time. Now turning to activity in private equity and real assets. Our North America Private Equity Fund now has over $19 billion of committed capital, and we're less than 1 year since its first close, already eclipsing the prior fund. And our Global Infrastructure Flagship Fund now has nearly $16 billion of commitments, also on track to be larger than its predecessor.
Craig Larson: So you've seen a meaningful increase in scale, reinforcing our view that client demand for insurance-related strategies just continues to deepen. And as a reminder here, the Ivy sidecar vehicles pay fee and carry, similar to a drawdown credit or private equity fund, and also allow us to grow GA in a capital-efficient way. And once this $6.5 billion of capital is fully deployed, we would expect it to translate into more than $65 billion of fee-paying AUM over time. Now turning to activity in private equity and real assets. Our North America Private Equity Fund now has over $19 billion of committed capital, and we're less than 1 year since its first close, already eclipsing the prior fund. And our Global Infrastructure Flagship Fund now has nearly $16 billion of commitments, also on track to be larger than its predecessor.
Speaker #2: And as a reminder here, the IV sidecar vehicles pay fee and carry, similar to a drawdown credit or private equity fund, and also allow us to grow GA in a capital-efficient way.
Speaker #2: And once this $6.5 billion of capital is fully deployed, we would expect it to translate into more than $65 billion of fee-paying AUM over time.
Speaker #2: Now turning to activity in private equity and real assets. Our North America private equity fund now has over $19 billion of committed capital, and we're less than one year since its first close, already eclipsing the prior fund.
Speaker #2: And our global infrastructure flagship fund now has nearly $16 billion of commitments, also on track to be larger than its predecessor. In our view, the momentum and success we've seen despite a more challenging fundraising environment is a real testament to our differentiated linear pacing, as well as the ability to return capital to our investors.
Craig Larson: In our view, the momentum and success we've seen, despite a more challenging fundraising environment, is a real testament to our differentiated investment performance, our focus on linear pacing, as well as the ability to return capital to our investors. Notably, flagships represented only 14% of our total 2025 fundraising, which speaks also to the breadth and diversity of our business across our fundraising activity. More broadly, in infrastructure, we've already raised nearly $4 billion of capital for the latest vintage of our Asia Infrastructure Fund, and we expect this to be larger than its $6 billion predecessor. Looking at another important piece of our capital raising efforts, private wealth. Our K-Series suite of products brought in $4.5 billion in Q4 and over $16 billion in full year 2025, which is nearly 2 times the amount raised in 2024.
Craig Larson: In our view, the momentum and success we've seen, despite a more challenging fundraising environment, is a real testament to our differentiated investment performance, our focus on linear pacing, as well as the ability to return capital to our investors. Notably, flagships represented only 14% of our total 2025 fundraising, which speaks also to the breadth and diversity of our business across our fundraising activity. More broadly, in infrastructure, we've already raised nearly $4 billion of capital for the latest vintage of our Asia Infrastructure Fund, and we expect this to be larger than its $6 billion predecessor. Looking at another important piece of our capital raising efforts, private wealth. Our K-Series suite of products brought in $4.5 billion in Q4 and over $16 billion in full year 2025, which is nearly 2 times the amount raised in 2024.
Craig Larson: In our view, the momentum and success we've seen, despite a more challenging fundraising environment, is a real testament to our differentiated investment performance, our focus on linear pacing, as well as the ability to return capital to our investors. Notably, flagships represented only 14% of our total 2025 fundraising, which speaks also to the breadth and diversity of our business across our fundraising activity. More broadly, in infrastructure, we've already raised nearly $4 billion of capital for the latest vintage of our Asia Infrastructure Fund, and we expect this to be larger than its $6 billion predecessor. Looking at another important piece of our capital raising efforts, private wealth. Our K-Series suite of products brought in $4.5 billion in Q4 and over $16 billion in full year 2025, which is nearly 2 times the amount raised in 2024.
Speaker #2: fundraising, which speaks also to the breadth and diversity of our business across our fundraising And notably, activity. More broadly in infrastructure, we've already raised nearly $4 billion of capital for the latest vintage of our Asia infrastructure fund, and we expect this to be larger than its $6 billion predecessor.
Speaker #2: And looking at another important piece of our capital-raising efforts, private wealth. Our K-Series suite of products brought in $4.5 billion in Q4 and over $16 billion in full year 2025, which is nearly two times the amount raised in '24.
Speaker #2: AUM across our K-Series billion. That's including activity that vehicles is now over $35 closed January 1st. And that compares to $18 billion a year ago.
Craig Larson: AUM across our K-Series vehicles is now over $35 billion. That's including activity that closed 1 January, and that compares to $18 billion a year ago. Also in December, we completed the conversion of an existing vehicle to KKR Asset-Based Finance Fund, or KABF. Today, the ABF market is larger than the direct lending, syndicated lending, and high yield bond markets combined. The shift in our investment approach here now offers individual investors the opportunity to access this high growth and, in our view, really differentiated asset class. We also continue to feel really excited about our strategic partnership with Capital Group. The 2 credit products we launched last April are getting on more platforms. We filed in equity products, and we're making progress on a target date fund solution, as well as public-private model, model portfolios.
Craig Larson: AUM across our K-Series vehicles is now over $35 billion. That's including activity that closed 1 January, and that compares to $18 billion a year ago. Also in December, we completed the conversion of an existing vehicle to KKR Asset-Based Finance Fund, or KABF. Today, the ABF market is larger than the direct lending, syndicated lending, and high yield bond markets combined. The shift in our investment approach here now offers individual investors the opportunity to access this high growth and, in our view, really differentiated asset class. We also continue to feel really excited about our strategic partnership with Capital Group. The 2 credit products we launched last April are getting on more platforms. We filed in equity products, and we're making progress on a target date fund solution, as well as public-private model, model portfolios.
Craig Larson: AUM across our K-Series vehicles is now over $35 billion. That's including activity that closed 1 January, and that compares to $18 billion a year ago. Also in December, we completed the conversion of an existing vehicle to KKR Asset-Based Finance Fund, or KABF. Today, the ABF market is larger than the direct lending, syndicated lending, and high yield bond markets combined. The shift in our investment approach here now offers individual investors the opportunity to access this high growth and, in our view, really differentiated asset class. We also continue to feel really excited about our strategic partnership with Capital Group. The 2 credit products we launched last April are getting on more platforms. We filed in equity products, and we're making progress on a target date fund solution, as well as public-private model, model portfolios.
Speaker #2: And also in December, we completed the conversion of an existing vehicle to KKR asset-based finance fund, or KABF. Today, the ABF market is larger than the direct lending syndicated lending and high-yield bond markets combined.
Speaker #2: And the shift in our investment approach here now offers individual investors the opportunity to view, really differentiated asset class. We also continue to feel really excited about our strategic partnership with Capital Group.
Speaker #2: The two credit products we launched last April are getting on more platforms. We filed an equity product. And we're making progress on a target date bond solution as well as public-private model portfolios.
Speaker #2: So, putting all of our capital-raising together, we've already raised over $240 billion—or over 80% of the $300-plus billion fundraising target that we outlined for the '24 through '26 period at our investor day in April of 2024.
Craig Larson: Putting all of our capital raising together, we've already raised over $240 billion, or over 80% of the $300+ billion fundraising target that we outlined for the 2024 through 2026 period at our Investor Day in April 2024. Then finally, consistent with our historical practice, we intend to increase our annual dividend from $0.74 to $0.78 per share, which will go into effect alongside our Q1 2026 earnings. This will now be the seventh consecutive year that we increased our dividends since C Corp conversion. With that, I'm pleased to turn things over to Rob.
Craig Larson: Putting all of our capital raising together, we've already raised over $240 billion, or over 80% of the $300+ billion fundraising target that we outlined for the 2024 through 2026 period at our Investor Day in April 2024. Then finally, consistent with our historical practice, we intend to increase our annual dividend from $0.74 to $0.78 per share, which will go into effect alongside our Q1 2026 earnings. This will now be the seventh consecutive year that we increased our dividends since C Corp conversion. With that, I'm pleased to turn things over to Rob.
Craig Larson: Putting all of our capital raising together, we've already raised over $240 billion, or over 80% of the $300+ billion fundraising target that we outlined for the 2024 through 2026 period at our Investor Day in April 2024. Then finally, consistent with our historical practice, we intend to increase our annual dividend from $0.74 to $0.78 per share, which will go into effect alongside our Q1 2026 earnings. This will now be the seventh consecutive year that we increased our dividends since C Corp conversion. With that, I'm pleased to turn things over to Rob.
Speaker #2: And then finally, consistent with our historical practice, we intend to increase our annual dividend from 74 to 78 cents per share, which will go into effect alongside our first quarter of '26 earnings.
Speaker #2: This will now be the seventh consecutive year that we've increased our dividend since C Corp conversion. And with that, I'm pleased to turn things over to Rob.
Speaker #2: Thanks a lot, Craig. And thank you, everyone, for joining strong 2025, and results—especially our Q4 our fourth quarter indicators—give us continued confidence as we head into the new year.
Robert Lewin: Thanks a lot, Craig, and thank you everyone for joining our call this morning. We had a strong 2025, and our Q4 results, especially our key forward indicators, give us continued confidence as we head into the new year. 2026 is a special year at KKR, as we will be celebrating our 50th anniversary on 1 May. And while we have been in this business for five decades, we still feel like a very young firm. With our three growth engines, asset management, insurance, and strategic holdings, positioning us extremely well over the long term. A critical element of our success is our highly collaborative culture, which allows us to maximize the impact of our business model and to attract and retain best-in-class talent across everything that we do.
Robert Lewin: Thanks a lot, Craig, and thank you everyone for joining our call this morning. We had a strong 2025, and our Q4 results, especially our key forward indicators, give us continued confidence as we head into the new year. 2026 is a special year at KKR, as we will be celebrating our 50th anniversary on 1 May. And while we have been in this business for five decades, we still feel like a very young firm. With our three growth engines, asset management, insurance, and strategic holdings, positioning us extremely well over the long term. A critical element of our success is our highly collaborative culture, which allows us to maximize the impact of our business model and to attract and retain best-in-class talent across everything that we do.
Robert Lewin: Thanks a lot, Craig, and thank you everyone for joining our call this morning. We had a strong 2025, and our Q4 results, especially our key forward indicators, give us continued confidence as we head into the new year. 2026 is a special year at KKR, as we will be celebrating our 50th anniversary on 1 May. And while we have been in this business for five decades, we still feel like a very young firm. With our three growth engines, asset management, insurance, and strategic holdings, positioning us extremely well over the long term. A critical element of our success is our highly collaborative culture, which allows us to maximize the impact of our business model and to attract and retain best-in-class talent across everything that we do.
Speaker #2: 2026 is especially year at KKR. As we will be celebrating our 50th anniversary on May 1st, and while we have been in this business for five decades, we still feel like a very young firm.
Speaker #2: With our three growth engines, asset management, insurance, and strategic holdings, positioning us extremely well over the long term. A critical element of our success is our highly collaborative culture.
Speaker #2: Which allows us to maximize the impact of our business model and to attract and retain best-in-class talent across everything that we do. Our business model and our culture—which both reinforce and perpetuate each other—are what give us our confidence not only as we look to 10 years and 2026, but over the next 5, to reviewing some key operating metrics from the quarter.
Robert Lewin: Our business model and our culture, which both reinforce and perpetuate each other, are what gives us our confidence, not only as we look to 2026, but over the next 5 to 10 years and beyond. I'm going to begin today by reviewing some key operating metrics from the quarter and the very tangible signs of momentum that we are seeing across our businesses. Craig already walked you through our strong capital raising, so I will start with monetizations. We remain very pleased with our overall performance and continue to see the benefits of our focus on linear deployment and disciplined portfolio construction. In 2025, we generated $2.7 billion of gross monetization activity. That is excluding the carried interest repayment obligation that we discussed on our last call.
Robert Lewin: Our business model and our culture, which both reinforce and perpetuate each other, are what gives us our confidence, not only as we look to 2026, but over the next 5 to 10 years and beyond. I'm going to begin today by reviewing some key operating metrics from the quarter and the very tangible signs of momentum that we are seeing across our businesses. Craig already walked you through our strong capital raising, so I will start with monetizations. We remain very pleased with our overall performance and continue to see the benefits of our focus on linear deployment and disciplined portfolio construction. In 2025, we generated $2.7 billion of gross monetization activity. That is excluding the carried interest repayment obligation that we discussed on our last call.
Robert Lewin: Our business model and our culture, which both reinforce and perpetuate each other, are what gives us our confidence, not only as we look to 2026, but over the next 5 to 10 years and beyond. I'm going to begin today by reviewing some key operating metrics from the quarter and the very tangible signs of momentum that we are seeing across our businesses. Craig already walked you through our strong capital raising, so I will start with monetizations. We remain very pleased with our overall performance and continue to see the benefits of our focus on linear deployment and disciplined portfolio construction. In 2025, we generated $2.7 billion of gross monetization activity. That is excluding the carried interest repayment obligation that we discussed on our last call.
Speaker #2: And the very tangible signs beyond. businesses. Craig already walked you through our strong capital I'm going to begin today by of momentum that we are seeing across our performance and continue to see the benefits of our focus on linear deployment and disciplined portfolio monetizations.
Speaker #2: construction. In 2025, we generated We remain very pleased with our overall activity. That $2.7 billion of gross monetization is excluding the carried interest repayment obligation that we discussed on our last call.
Robert Lewin: Gross realized carried interest increased approximately 30% year-over-year, and that growth came on top of what was already a very solid level of monetizations for us in 2024. Even with our healthy momentum on monetizations, our embedded gains currently stand at $18.6 billion, as Craig noted just a moment ago. That is up from $15.6 billion a year ago, or 19%. Our portfolio is in very good shape, and ultimately, that is the most important indicator for future monetizations. Turning to deployment. We invested $32 billion of capital in the quarter and $95 billion over the course of 2025, 18% compared to 2024. Our deployment was driven by a number of our key focus areas, including Asia, infrastructure, and asset-based finance.
Robert Lewin: Gross realized carried interest increased approximately 30% year-over-year, and that growth came on top of what was already a very solid level of monetizations for us in 2024. Even with our healthy momentum on monetizations, our embedded gains currently stand at $18.6 billion, as Craig noted just a moment ago. That is up from $15.6 billion a year ago, or 19%. Our portfolio is in very good shape, and ultimately, that is the most important indicator for future monetizations. Turning to deployment. We invested $32 billion of capital in the quarter and $95 billion over the course of 2025, 18% compared to 2024. Our deployment was driven by a number of our key focus areas, including Asia, infrastructure, and asset-based finance.
Robert Lewin: Gross realized carried interest increased approximately 30% year-over-year, and that growth came on top of what was already a very solid level of monetizations for us in 2024. Even with our healthy momentum on monetizations, our embedded gains currently stand at $18.6 billion, as Craig noted just a moment ago. That is up from $15.6 billion a year ago, or 19%. Our portfolio is in very good shape, and ultimately, that is the most important indicator for future monetizations. Turning to deployment. We invested $32 billion of capital in the quarter and $95 billion over the course of 2025, 18% compared to 2024. Our deployment was driven by a number of our key focus areas, including Asia, infrastructure, and asset-based finance.
Speaker #2: 30% year on year, and that Gross realized growth came on top of what was already a very solid level of monetizations for us in 2024.
Speaker #2: Even with our healthy momentum on monetizations, our embedded gains currently stand at 18.6 billion, as Craig noted just a moment ago. That is up from 15.6 billion a year ago, or 19%.
Speaker #2: Our portfolio is in very good shape, and ultimately that is the most important indicator for future monetizations. of capital in the quarter and $95 Turning to billion over the course of 2025.
Speaker #2: That is up 13% compared to 2024. Our deployment was areas, including driven by a number of our key focus Asia, infrastructure, and asset-based finance.
Speaker #2: With $118 billion of dry powder, we are incredibly well-positioned to build our portfolio for anything, we feel capital constrained by the future. And if the opportunities that we are seeing across the world today.
Robert Lewin: With $118 billion of dry powder, we are incredibly well-positioned to build our portfolio for the future, and if anything, we feel capital constrained by the opportunities that we are seeing across the world today. Asia continues to be one of the most dynamic regions globally for us. Our full year investment activity in the region was up more than 70% versus 2024, and spanned traditional private equity, growth equity, infrastructure, and real estate. This reflects both the scale of our local teams and the breadth of opportunity that we are seeing in that part of the world. As a reminder, we have nine offices and approximately 1,000 people in Asia, with over 200 employees in Japan, which remains one of our most active investment markets globally. We also invested nearly $15 billion into infrastructure in 2025.
Robert Lewin: With $118 billion of dry powder, we are incredibly well-positioned to build our portfolio for the future, and if anything, we feel capital constrained by the opportunities that we are seeing across the world today. Asia continues to be one of the most dynamic regions globally for us. Our full year investment activity in the region was up more than 70% versus 2024, and spanned traditional private equity, growth equity, infrastructure, and real estate. This reflects both the scale of our local teams and the breadth of opportunity that we are seeing in that part of the world. As a reminder, we have nine offices and approximately 1,000 people in Asia, with over 200 employees in Japan, which remains one of our most active investment markets globally. We also invested nearly $15 billion into infrastructure in 2025.
Robert Lewin: With $118 billion of dry powder, we are incredibly well-positioned to build our portfolio for the future, and if anything, we feel capital constrained by the opportunities that we are seeing across the world today. Asia continues to be one of the most dynamic regions globally for us. Our full year investment activity in the region was up more than 70% versus 2024, and spanned traditional private equity, growth equity, infrastructure, and real estate. This reflects both the scale of our local teams and the breadth of opportunity that we are seeing in that part of the world. As a reminder, we have nine offices and approximately 1,000 people in Asia, with over 200 employees in Japan, which remains one of our most active investment markets globally. We also invested nearly $15 billion into infrastructure in 2025.
Speaker #2: Asia continues to be one of the most dynamic regions globally for us. Our full-year investment activity in the region was up more than 70% versus 2024.
Speaker #2: And spanned traditional private equity, growth equity, infrastructure, and real estate. This reflects both the scale of our local teams and the breadth of opportunity that we are seeing in that part of the world.
Speaker #2: As a reminder, we have nine offices and approximately 1,000 people in Asia. With over 200 employees in Japan. Which remains one of our most active investment markets globally.
Speaker #2: We also invested nearly $15 billion into infrastructure in 2025. That's a record figure for half of that activity occurring outside us. With over of the United States.
Robert Lewin: That's a record figure for us, with over half of that activity occurring outside of the United States. The need for infrastructure investment remains massive, and this is one of the biggest growth vectors that we have as a firm. We've recently invested in a high-quality logistics facility in Korea, a European built-to-suit data center platform, and our first structured alternative transaction for our insurance business out of Europe in the renewables space. We've also continued to lean into the opportunity within credit, deploying $44 billion in total over 2025. That's up 14% compared to 2024. Our ABF business, which today represents $85 billion of AUM, invested $19 billion of capital last year. And finally, I did want to touch on our strategic acquisition of Arctos, which we announced earlier this morning.
Robert Lewin: That's a record figure for us, with over half of that activity occurring outside of the United States. The need for infrastructure investment remains massive, and this is one of the biggest growth vectors that we have as a firm. We've recently invested in a high-quality logistics facility in Korea, a European built-to-suit data center platform, and our first structured alternative transaction for our insurance business out of Europe in the renewables space. We've also continued to lean into the opportunity within credit, deploying $44 billion in total over 2025. That's up 14% compared to 2024. Our ABF business, which today represents $85 billion of AUM, invested $19 billion of capital last year. And finally, I did want to touch on our strategic acquisition of Arctos, which we announced earlier this morning.
Robert Lewin: That's a record figure for us, with over half of that activity occurring outside of the United States. The need for infrastructure investment remains massive, and this is one of the biggest growth vectors that we have as a firm. We've recently invested in a high-quality logistics facility in Korea, a European built-to-suit data center platform, and our first structured alternative transaction for our insurance business out of Europe in the renewables space. We've also continued to lean into the opportunity within credit, deploying $44 billion in total over 2025. That's up 14% compared to 2024. Our ABF business, which today represents $85 billion of AUM, invested $19 billion of capital last year. And finally, I did want to touch on our strategic acquisition of Arctos, which we announced earlier this morning.
Speaker #2: The need for infrastructure investment remains massive. as a firm. We've And this is one recently invested in a high-quality logistics facility in Korea, a European-built-to-suit data center platform, and our first structured alternative transaction for our insurance business out of Europe in the renewables space.
Speaker #2: continued to lean into the opportunity within We've also billion in total over credit, deploying $44 2025. That's up 14% compared to 2024. business, which today represents Our ABF invested $19 billion of capital last $85 billion of AUM, year.
Speaker #2: And finally, I did want to touch on our strategic acquisition of Arctos, which we announced earlier this morning. You would have seen a press release earlier today on Arctos, as well as a presentation on the transaction and all of the opportunities that we see together.
Robert Lewin: You would have seen a press release earlier today on Arctos, as well as a presentation on the transaction and all of the opportunities that we see together. I'm not going to page flip through that presentation, but would encourage everyone to review that deck as it does a great job highlighting the quality of the business we are acquiring and the opportunities that we see together. Arctos is the leading investor in professional sports franchise stakes and a leader in GP solutions with approximately $15 billion of assets under management. We are extremely excited to partner with the Arctos management team and believe that we can build on their leading franchises and create meaningful value together by combining the strengths of our respective organizations. The transaction is valued at $1.4 billion in equity and cash, with much of the equity subject to long-term vesting.
Robert Lewin: You would have seen a press release earlier today on Arctos, as well as a presentation on the transaction and all of the opportunities that we see together. I'm not going to page flip through that presentation, but would encourage everyone to review that deck as it does a great job highlighting the quality of the business we are acquiring and the opportunities that we see together. Arctos is the leading investor in professional sports franchise stakes and a leader in GP solutions with approximately $15 billion of assets under management. We are extremely excited to partner with the Arctos management team and believe that we can build on their leading franchises and create meaningful value together by combining the strengths of our respective organizations. The transaction is valued at $1.4 billion in equity and cash, with much of the equity subject to long-term vesting.
Robert Lewin: You would have seen a press release earlier today on Arctos, as well as a presentation on the transaction and all of the opportunities that we see together. I'm not going to page flip through that presentation, but would encourage everyone to review that deck as it does a great job highlighting the quality of the business we are acquiring and the opportunities that we see together. Arctos is the leading investor in professional sports franchise stakes and a leader in GP solutions with approximately $15 billion of assets under management. We are extremely excited to partner with the Arctos management team and believe that we can build on their leading franchises and create meaningful value together by combining the strengths of our respective organizations. The transaction is valued at $1.4 billion in equity and cash, with much of the equity subject to long-term vesting.
Speaker #2: I'm not going to page flip through that presentation, but would encourage everyone to review that deck, as it does a great job highlighting the quality of the business we are acquiring and the opportunities that we see together.
Speaker #2: leading investor in professional sports Arctos is the franchise stakes, and a leader in GP solutions with approximately $15 billion of assets under management. We are extremely excited to partner with the Arctos management team.
Speaker #2: And believe that we can build on their leading franchises and create meaningful value together by combining the strengths of our respective organizations. The transaction is and cash, with much of the equity subject to long-term vesting.
Speaker #2: In addition, there is the potential for up to $550 million of additional long-term vesting equity that is subject to KKR share price and Arctos operating performance targets.
Robert Lewin: In addition, there is the potential for up to $550 million of additional long-term vesting equity that is subject to KKR share price and Arctos operating performance targets. We do expect that this transaction will be accretive per share across our key financial metrics immediately post-closing. Critically, we've known Arctos's co-founder, Ian Charles, for over a decade. He has been one of the leading and most creative minds in the secondary space, and we have direct experience working together on one of the industry's first structured secondaries transactions, which helped launch our healthcare and technology growth franchises, businesses that today manage over $17 billion of capital. Upon closing, the acquisition immediately puts us in a leadership position in sports. Arctos is the largest institutional investor in professional sports franchise stakes, and is the only firm that is approved for multi-team ownership across all five major US leagues.
Robert Lewin: In addition, there is the potential for up to $550 million of additional long-term vesting equity that is subject to KKR share price and Arctos operating performance targets. We do expect that this transaction will be accretive per share across our key financial metrics immediately post-closing. Critically, we've known Arctos's co-founder, Ian Charles, for over a decade. He has been one of the leading and most creative minds in the secondary space, and we have direct experience working together on one of the industry's first structured secondaries transactions, which helped launch our healthcare and technology growth franchises, businesses that today manage over $17 billion of capital. Upon closing, the acquisition immediately puts us in a leadership position in sports. Arctos is the largest institutional investor in professional sports franchise stakes, and is the only firm that is approved for multi-team ownership across all five major US leagues.
Robert Lewin: In addition, there is the potential for up to $550 million of additional long-term vesting equity that is subject to KKR share price and Arctos operating performance targets. We do expect that this transaction will be accretive per share across our key financial metrics immediately post-closing. Critically, we've known Arctos's co-founder, Ian Charles, for over a decade. He has been one of the leading and most creative minds in the secondary space, and we have direct experience working together on one of the industry's first structured secondaries transactions, which helped launch our healthcare and technology growth franchises, businesses that today manage over $17 billion of capital. Upon closing, the acquisition immediately puts us in a leadership position in sports. Arctos is the largest institutional investor in professional sports franchise stakes, and is the only firm that is approved for multi-team ownership across all five major US leagues.
Speaker #2: We do expect that this transaction will be accretive per share across our key financial metrics, immediately post-closing. Critically, we've known Arctos' co-founder, Ian Charles, for over a decade.
Speaker #2: He has been one of the leading and most creative minds in the secondary space. And we have direct experience working together on one of the industry's first structured secondary transactions, which helped launch our healthcare and technology growth franchises, businesses that today manage over $17 billion of capital.
Speaker #2: Upon closing, the acquisition immediately puts us in a leadership position in sports. Arctos is the largest institutional investor in professional sports franchise firm that has approved for multi-team leagues.
Speaker #2: Upon closing, the acquisition immediately puts us in a leadership position in sports. Arctos is the largest institutional investor in professional sports franchise firm that has approved for multi-team stakes and is the only In addition, Arctos is a top player ownership across all five major US in GP solutions, a rapidly growing asset class focused on providing liquidity to alternative asset managers.
Robert Lewin: In addition, Arctos is a top player in GP Solutions, a rapidly growing asset class focused on providing liquidity to alternative asset managers, which we expect will continue to expand. We've been asked quite a bit about the secondary space, including a few times over the years on these calls. I think it's fair to say that we have evaluated most of the secondaries asset managers that have traded over the last decade. For a variety of reasons, we did not pursue any of those opportunities. However, we knew that when we found that right partner, the partner who could give us conviction that we could build a leading secondaries and solutions franchise, that we would be all in, and we are confident that we have found that in Arctos.
Robert Lewin: In addition, Arctos is a top player in GP Solutions, a rapidly growing asset class focused on providing liquidity to alternative asset managers, which we expect will continue to expand. We've been asked quite a bit about the secondary space, including a few times over the years on these calls. I think it's fair to say that we have evaluated most of the secondaries asset managers that have traded over the last decade. For a variety of reasons, we did not pursue any of those opportunities. However, we knew that when we found that right partner, the partner who could give us conviction that we could build a leading secondaries and solutions franchise, that we would be all in, and we are confident that we have found that in Arctos.
Robert Lewin: In addition, Arctos is a top player in GP Solutions, a rapidly growing asset class focused on providing liquidity to alternative asset managers, which we expect will continue to expand. We've been asked quite a bit about the secondary space, including a few times over the years on these calls. I think it's fair to say that we have evaluated most of the secondaries asset managers that have traded over the last decade. For a variety of reasons, we did not pursue any of those opportunities. However, we knew that when we found that right partner, the partner who could give us conviction that we could build a leading secondaries and solutions franchise, that we would be all in, and we are confident that we have found that in Arctos.
Speaker #2: Which we expect will continue to expand. We've been asked quite a bit about the secondary space, including a few times over the years on these calls.
Speaker #2: I think it's fair to say that we have evaluated most of the secondary's asset managers that have traded over the last decade. For a variety of reasons, we did opportunities.
Speaker #2: not pursue any of those However, we knew that when we found that right partner, the partner who could give us conviction that we could build a leading secondaries and solutions franchise, that we would be all in.
Speaker #2: And we are confident that we have found that in Arctos. Ian Charles and his partner, Doc O'Connor, have been leaders in the sports and solutions industries for over two decades.
Robert Lewin: Ian Charles and his partner, Doc O'Connor, have been leaders in the sports and solutions industries for over two decades, and the combination of the existing Arctos team and their reputation in the market make us incredibly excited about the business that we can build together over the course of the next decade plus. In connection with the acquisition, we will be creating a new investing vertical called KKR Solutions, which will include sports, GP solutions, and future secondary strategies. Over time, we do expect this business to reach $100+ billion of AUM and be a very meaningful contributor to our PNL. Importantly, as you think about this acquisition, it is highly consistent with the strategic M&A framework that we have previously laid out for our investors and analysts. That includes 5 things of note.
Robert Lewin: Ian Charles and his partner, Doc O'Connor, have been leaders in the sports and solutions industries for over two decades, and the combination of the existing Arctos team and their reputation in the market make us incredibly excited about the business that we can build together over the course of the next decade plus. In connection with the acquisition, we will be creating a new investing vertical called KKR Solutions, which will include sports, GP solutions, and future secondary strategies. Over time, we do expect this business to reach $100+ billion of AUM and be a very meaningful contributor to our PNL. Importantly, as you think about this acquisition, it is highly consistent with the strategic M&A framework that we have previously laid out for our investors and analysts. That includes 5 things of note.
Robert Lewin: Ian Charles and his partner, Doc O'Connor, have been leaders in the sports and solutions industries for over two decades, and the combination of the existing Arctos team and their reputation in the market make us incredibly excited about the business that we can build together over the course of the next decade plus. In connection with the acquisition, we will be creating a new investing vertical called KKR Solutions, which will include sports, GP solutions, and future secondary strategies. Over time, we do expect this business to reach $100+ billion of AUM and be a very meaningful contributor to our PNL. Importantly, as you think about this acquisition, it is highly consistent with the strategic M&A framework that we have previously laid out for our investors and analysts. That includes 5 things of note.
Speaker #2: And the combination of the existing Arctos team and their reputation in the market makes us incredibly excited about the business that we can build together over the course of the next decade plus.
Speaker #2: In connection with the acquisition, we will be creating a new investing vertical called KKR Solutions, which will include sports, GP solutions, and future secondary strategies.
Speaker #2: Over time, we do expect this business to reach $100-plus billion of AUM and be a very meaningful contributor to our P&L. Importantly, as you think about this acquisition, it is highly consistent with the strategic M&A framework that we have previously laid out, which includes five things of note.
Speaker #2: Number one, access to leadership positions in large addressable markets that investors and analysts. would be difficult to build That organically. Number two is long-dated capital.
Robert Lewin: Number one, access to leadership positions in large addressable markets that would be difficult to build organically. Number two is long-dated capital. Arctos' $15 billion of AUM is long duration in nature, with no fixed end date. It is really as close to permanent capital as it gets in the asset manager space. Number three, highly complementary capabilities with a differentiated origination and sourcing engine that we believe can be valuable across the full KKR ecosystem, in particular, our insurance business. Number four would be the synergy that exists around distribution across both wealth and institutional channels. And number five, most importantly, strong cultural alignment between our two firms. We are thrilled to be welcoming the Arctos team to KKR and are confident in the opportunities ahead.
Robert Lewin: Number one, access to leadership positions in large addressable markets that would be difficult to build organically. Number two is long-dated capital. Arctos' $15 billion of AUM is long duration in nature, with no fixed end date. It is really as close to permanent capital as it gets in the asset manager space. Number three, highly complementary capabilities with a differentiated origination and sourcing engine that we believe can be valuable across the full KKR ecosystem, in particular, our insurance business. Number four would be the synergy that exists around distribution across both wealth and institutional channels. And number five, most importantly, strong cultural alignment between our two firms. We are thrilled to be welcoming the Arctos team to KKR and are confident in the opportunities ahead.
Robert Lewin: Number one, access to leadership positions in large addressable markets that would be difficult to build organically. Number two is long-dated capital. Arctos' $15 billion of AUM is long duration in nature, with no fixed end date. It is really as close to permanent capital as it gets in the asset manager space. Number three, highly complementary capabilities with a differentiated origination and sourcing engine that we believe can be valuable across the full KKR ecosystem, in particular, our insurance business. Number four would be the synergy that exists around distribution across both wealth and institutional channels. And number five, most importantly, strong cultural alignment between our two firms. We are thrilled to be welcoming the Arctos team to KKR and are confident in the opportunities ahead.
Speaker #2: The vast majority of Arctos' $15 billion of AUM is long-duration in nature, with no fixed end date. It is really as close to permanent capital as it gets in the asset manager space.
Speaker #2: Number three, highly complementary capabilities with a differentiated origination and sourcing engine. That we believe can be valuable across the full KKR ecosystem, in particular our insurance business.
Speaker #2: Number four would be the synergy that exists around distribution across both wealth and institutional channels. And number five, most alignment between our two firms.
Speaker #2: Importantly, strong cultural—we are thrilled to be welcoming the Arctos team to KKR and are confident in the opportunities ahead. Before handing things over to Scott, I'd like to reiterate the strong momentum that we are seeing across the firm so far in 2026.
Robert Lewin: Before handing things over to Scott, I'd like to reiterate the strong momentum that we are seeing across the firm so far in 2026. At our Investor Day in April 2024, we introduced 2026 guidance across our key metrics. We are highly confident in our ability to meaningfully exceed our fundraising and FRE per share targets. And as we explained last quarter, presuming a constructive monetization environment, we also continue to feel confident that we can achieve $7+ per share of Adjusted Net Income. However, if the environment does deteriorate, we may delay some of our monetization activity. And if that were to happen, we'd be earning less in 2026, but again, that would be in service of more earnings in 2027 and beyond.
Robert Lewin: Before handing things over to Scott, I'd like to reiterate the strong momentum that we are seeing across the firm so far in 2026. At our Investor Day in April 2024, we introduced 2026 guidance across our key metrics. We are highly confident in our ability to meaningfully exceed our fundraising and FRE per share targets. And as we explained last quarter, presuming a constructive monetization environment, we also continue to feel confident that we can achieve $7+ per share of Adjusted Net Income. However, if the environment does deteriorate, we may delay some of our monetization activity. And if that were to happen, we'd be earning less in 2026, but again, that would be in service of more earnings in 2027 and beyond.
Robert Lewin: Before handing things over to Scott, I'd like to reiterate the strong momentum that we are seeing across the firm so far in 2026. At our Investor Day in April 2024, we introduced 2026 guidance across our key metrics. We are highly confident in our ability to meaningfully exceed our fundraising and FRE per share targets. And as we explained last quarter, presuming a constructive monetization environment, we also continue to feel confident that we can achieve $7+ per share of Adjusted Net Income. However, if the environment does deteriorate, we may delay some of our monetization activity. And if that were to happen, we'd be earning less in 2026, but again, that would be in service of more earnings in 2027 and beyond.
Speaker #2: At our investor day in April of 2024, we introduced metrics. We are highly confident in our ability to meaningfully exceed our fundraising and FRE per share targets.
Speaker #2: And as we explained last quarter, presuming a constructive monetization environment, we also continue to feel confident that we can achieve seven plus dollars per share of adjusted net income.
Speaker #2: However, if the environment does deteriorate, we may delay some of our monetization activity. And if that were to happen, we'd be earning less in 2026, but again, that would be in service of more earnings in 2027 and beyond.
Speaker #2: With record unrealized gains, we continue to feel incredibly well-positioned for the future. And the good news here is that we will be communicating frequently on monetizations through these quarterly calls and also our intraquarterly monetization press releases.
Robert Lewin: With record unrealized gains, we continue to feel incredibly well-positioned for the future. The good news here is that we will be communicating frequently on monetizations through these quarterly calls and also our interquarterly monetization press releases, so that we can track our progress together and no one will be surprised as we work through the year. With that, let me turn the call over to Scott.
Robert Lewin: With record unrealized gains, we continue to feel incredibly well-positioned for the future. The good news here is that we will be communicating frequently on monetizations through these quarterly calls and also our interquarterly monetization press releases, so that we can track our progress together and no one will be surprised as we work through the year. With that, let me turn the call over to Scott.
Robert Lewin: With record unrealized gains, we continue to feel incredibly well-positioned for the future. The good news here is that we will be communicating frequently on monetizations through these quarterly calls and also our interquarterly monetization press releases, so that we can track our progress together and no one will be surprised as we work through the year. With that, let me turn the call over to Scott.
Speaker #2: So that we can track our progress together and no one will be surprised as we work through the year. And with that, let me turn the call over to Scott.
Speaker #2: Thanks, Rob. And thank you, everybody, for joining our call today. I want to begin with Arctos. Because it's a good illustration of how we think about building KKR.
Scott Nuttall: Thanks, Rob, and thank you everybody for joining our call today. I want to begin with Arctos, because it's a good illustration of how we think about building KKR. We have known this team for many years. We've done deals together. We have seen how they source, how they underwrite, and how they build durable franchises. What attracted us was not just the asset classes, sports, GP solutions, and secondaries, but it's the people, the culture, and the long-term opportunity to create something exceptional inside KKR working together. Ian Charles is one of the most experienced investors in the solutions and secondary space. His co-founder, Doc O'Connor, is a pioneer in sports management and investing. Together, they have built a team with strong origination capabilities and a clear understanding of how to scale a business without compromising performance. Just as importantly, there is strong cultural alignment.
Scott Nuttall: Thanks, Rob, and thank you everybody for joining our call today. I want to begin with Arctos, because it's a good illustration of how we think about building KKR. We have known this team for many years. We've done deals together. We have seen how they source, how they underwrite, and how they build durable franchises. What attracted us was not just the asset classes, sports, GP solutions, and secondaries, but it's the people, the culture, and the long-term opportunity to create something exceptional inside KKR working together. Ian Charles is one of the most experienced investors in the solutions and secondary space. His co-founder, Doc O'Connor, is a pioneer in sports management and investing. Together, they have built a team with strong origination capabilities and a clear understanding of how to scale a business without compromising performance. Just as importantly, there is strong cultural alignment.
Scott Nuttall: Thanks, Rob, and thank you everybody for joining our call today. I want to begin with Arctos, because it's a good illustration of how we think about building KKR. We have known this team for many years. We've done deals together. We have seen how they source, how they underwrite, and how they build durable franchises. What attracted us was not just the asset classes, sports, GP solutions, and secondaries, but it's the people, the culture, and the long-term opportunity to create something exceptional inside KKR working together. Ian Charles is one of the most experienced investors in the solutions and secondary space. His co-founder, Doc O'Connor, is a pioneer in sports management and investing. Together, they have built a team with strong origination capabilities and a clear understanding of how to scale a business without compromising performance. Just as importantly, there is strong cultural alignment.
Speaker #2: We have known this team for many years. We've done deals together. We have seen how they source, how they underwrite, and how they build durable franchises.
Speaker #2: What attracted us was not just the asset classes, sports, GP solutions, and secondaries, but it's the people, the culture, and the long-term opportunity to create something exceptional inside KKR, working together.
Speaker #2: Ian Charles is one of the most experienced investors in the solutions and secondaries space. His co-founder, Doc O'Connor, is a pioneer in sports management and investing.
Speaker #2: Together, they have built a team with strong origination capabilities and business without compromising a clear understanding of how to scale a performance. Just as importantly, there is strong cultural enormously to us when we alignment.
Scott Nuttall: That matters enormously to us when we consider strategic M&A. We have been very intentional over the years about where and how we expand the firm. We only want to be in businesses where we believe we can be a top-tier player over time. With Arctos, we have conviction that we have a clear right to win and the opportunity to build a $100 billion AUM solutions franchise that will be a meaningful contributor to KKR's long-term earnings profile. If you step back and look at our history of strategic acquisitions, Global Atlantic, Marshall Wace, FSK, KJRM, and Healthcare Royalty Partners, you'll see a consistent pattern. These businesses diversify our earnings, extend the duration of our capital, and increase the quality and visibility of our cash flows. Arctos fits squarely within that framework.
Scott Nuttall: That matters enormously to us when we consider strategic M&A. We have been very intentional over the years about where and how we expand the firm. We only want to be in businesses where we believe we can be a top-tier player over time. With Arctos, we have conviction that we have a clear right to win and the opportunity to build a $100 billion AUM solutions franchise that will be a meaningful contributor to KKR's long-term earnings profile. If you step back and look at our history of strategic acquisitions, Global Atlantic, Marshall Wace, FSK, KJRM, and Healthcare Royalty Partners, you'll see a consistent pattern. These businesses diversify our earnings, extend the duration of our capital, and increase the quality and visibility of our cash flows. Arctos fits squarely within that framework.
Scott Nuttall: That matters enormously to us when we consider strategic M&A. We have been very intentional over the years about where and how we expand the firm. We only want to be in businesses where we believe we can be a top-tier player over time. With Arctos, we have conviction that we have a clear right to win and the opportunity to build a $100 billion AUM solutions franchise that will be a meaningful contributor to KKR's long-term earnings profile. If you step back and look at our history of strategic acquisitions, Global Atlantic, Marshall Wace, FSK, KJRM, and Healthcare Royalty Partners, you'll see a consistent pattern. These businesses diversify our earnings, extend the duration of our capital, and increase the quality and visibility of our cash flows. Arctos fits squarely within that framework.
Speaker #2: Consider strategic M&A that matters. We have been very intentional over the years about where and how we expand the firm. We only want to be in businesses where we believe we can be a top-tier player over time.
Speaker #2: With Arctos, we have conviction that we have a clear right to win and the opportunity to build a $100 billion AUM solutions franchise that will be a meaningful contributor to KKR's long-term earnings profile.
Speaker #2: If you step back and look at our history of strategic acquisitions, global Atlantic, Marshall Wace, FSK, KJRM, and healthcare royalty partners, you'll see a consistent pattern.
Speaker #2: These businesses diversify our earnings, extend the duration of our capital, and increase the quality and visibility of our cash flows. Arctos fits squarely within that framework.
Speaker #2: Now let me zoom out for a moment and talk about the broader environment. Because there has been no shortage of generalizations about markets, and private capital.
Scott Nuttall: Now, let me zoom out for a moment and talk about the broader environment, because there's been no shortage of generalizations about markets and private capital. The period from 2010 to 2020 was characterized by low rates, low inflation, and relatively little volatility. The last 5 years, however, have been very different. Interest rates have risen, inflation has reemerged, geopolitical risk has increased, and dispersion has returned. In our business, today's outcomes are the result of decisions made years ago around portfolio construction, deployment pacing, and just overall discipline. We are seeing much greater bifurcation across our industry. It is becoming harder to generalize about asset classes and easier to distinguish between firms that are well-positioned and those that are not. Let me give you a few concrete examples of what we're seeing. Let's start with fundraising.
Scott Nuttall: Now, let me zoom out for a moment and talk about the broader environment, because there's been no shortage of generalizations about markets and private capital. The period from 2010 to 2020 was characterized by low rates, low inflation, and relatively little volatility. The last 5 years, however, have been very different. Interest rates have risen, inflation has reemerged, geopolitical risk has increased, and dispersion has returned. In our business, today's outcomes are the result of decisions made years ago around portfolio construction, deployment pacing, and just overall discipline. We are seeing much greater bifurcation across our industry. It is becoming harder to generalize about asset classes and easier to distinguish between firms that are well-positioned and those that are not. Let me give you a few concrete examples of what we're seeing. Let's start with fundraising.
Scott Nuttall: Now, let me zoom out for a moment and talk about the broader environment, because there's been no shortage of generalizations about markets and private capital. The period from 2010 to 2020 was characterized by low rates, low inflation, and relatively little volatility. The last 5 years, however, have been very different. Interest rates have risen, inflation has reemerged, geopolitical risk has increased, and dispersion has returned. In our business, today's outcomes are the result of decisions made years ago around portfolio construction, deployment pacing, and just overall discipline. We are seeing much greater bifurcation across our industry. It is becoming harder to generalize about asset classes and easier to distinguish between firms that are well-positioned and those that are not. Let me give you a few concrete examples of what we're seeing. Let's start with fundraising.
Speaker #2: was characterized by low The period from 2010 to 2020 rates, low inflation, and relatively little volatility. The last five years, however, have been very different.
Speaker #2: Interest rates have risen, inflation has reemerged, geopolitical risk has increased, and dispersion has returned. In our business, today’s outcomes are the result of decisions made years ago.
Speaker #2: Around portfolio construction, deployment pacing, and just overall discipline. We are seeing much greater bifurcation across our industry. It is becoming harder to generalize about asset classes, and easier to distinguish between firms that are well-positioned and those that are not.
Speaker #2: Let me give you a few concrete examples of what we're seeing. Let's start with fundraising. Despite the headlines, 2025 was a record us. We raised $129 fundraising year for billion.
Scott Nuttall: Despite the headlines, 2025 was a record fundraising year for us. We raised $129 billion, nearly double what we raised 2 years ago, and that strength was broad-based. In credit, we raised a record $68 billion. In infrastructure, our AUM has grown from approximately $17 billion 5 years ago to around $100 billion today. In private equity, in clear contradiction to headlines, our AUM has doubled over the last 5 years. We're also seeing this across investor types. Sovereign wealth funds remain engaged. Insurance companies continue to increase allocations. Pension plans are working to close gaps in infrastructure and private credit, and private wealth remains in the early stages of adoption. Across all of these channels, investors are consolidating relationships around a smaller number of partners they trust to perform across cycles.
Scott Nuttall: Despite the headlines, 2025 was a record fundraising year for us. We raised $129 billion, nearly double what we raised 2 years ago, and that strength was broad-based. In credit, we raised a record $68 billion. In infrastructure, our AUM has grown from approximately $17 billion 5 years ago to around $100 billion today. In private equity, in clear contradiction to headlines, our AUM has doubled over the last 5 years. We're also seeing this across investor types. Sovereign wealth funds remain engaged. Insurance companies continue to increase allocations. Pension plans are working to close gaps in infrastructure and private credit, and private wealth remains in the early stages of adoption. Across all of these channels, investors are consolidating relationships around a smaller number of partners they trust to perform across cycles.
Scott Nuttall: Despite the headlines, 2025 was a record fundraising year for us. We raised $129 billion, nearly double what we raised 2 years ago, and that strength was broad-based. In credit, we raised a record $68 billion. In infrastructure, our AUM has grown from approximately $17 billion 5 years ago to around $100 billion today. In private equity, in clear contradiction to headlines, our AUM has doubled over the last 5 years. We're also seeing this across investor types. Sovereign wealth funds remain engaged. Insurance companies continue to increase allocations. Pension plans are working to close gaps in infrastructure and private credit, and private wealth remains in the early stages of adoption. Across all of these channels, investors are consolidating relationships around a smaller number of partners they trust to perform across cycles.
Speaker #2: Nearly double what we raised two years ago. And that strength was broad-based. In credit, we raised a record $68 billion. In infrastructure, our AUM has grown from approximately $17 billion five years ago to around $100 billion today.
Speaker #2: In private equity, in clear contradiction to headlines, our AUM has doubled over the last five years. We're also seeing this across investor types. Sovereign wealth funds remain engaged.
Speaker #2: Insurance companies continue to increase allocations, pension plans are working to close gaps in infrastructure and private credit, and private wealth remains in the early stages of adoption.
Speaker #2: Across all of these channels, investors are consolidating relationships around a smaller number of partners they trust to perform across cycles. That trend has been underway for some time.
Scott Nuttall: That trend has been underway for some time, and we believe it is accelerating and continues to work in our favor. This is showing up in our management fees, which grew 18% last year, accelerating relative to the last three-year annual growth rate of 16%. Now let's talk about monetizations. There's also been a lot of more market focus on how difficult exits have been in our industry. That has not been the case for us. Our portfolio is mature, global, and well-constructed. We've been disciplined around pacing and diversification for a long time, and that is showing up in record-embedded gains and a healthy pipeline of realizations across strategies and regions. We are not forced sellers. If markets are constructive, we will monetize. If conditions are less favorable, we can afford to be patient. Either way, the value is there. And finally, stepping back.
Scott Nuttall: That trend has been underway for some time, and we believe it is accelerating and continues to work in our favor. This is showing up in our management fees, which grew 18% last year, accelerating relative to the last three-year annual growth rate of 16%. Now let's talk about monetizations. There's also been a lot of more market focus on how difficult exits have been in our industry. That has not been the case for us. Our portfolio is mature, global, and well-constructed. We've been disciplined around pacing and diversification for a long time, and that is showing up in record-embedded gains and a healthy pipeline of realizations across strategies and regions. We are not forced sellers. If markets are constructive, we will monetize. If conditions are less favorable, we can afford to be patient. Either way, the value is there. And finally, stepping back.
Scott Nuttall: That trend has been underway for some time, and we believe it is accelerating and continues to work in our favor. This is showing up in our management fees, which grew 18% last year, accelerating relative to the last three-year annual growth rate of 16%. Now let's talk about monetizations. There's also been a lot of more market focus on how difficult exits have been in our industry. That has not been the case for us. Our portfolio is mature, global, and well-constructed. We've been disciplined around pacing and diversification for a long time, and that is showing up in record-embedded gains and a healthy pipeline of realizations across strategies and regions. We are not forced sellers. If markets are constructive, we will monetize. If conditions are less favorable, we can afford to be patient. Either way, the value is there. And finally, stepping back.
Speaker #2: And we believe it is accelerating and continues to work in our favor. This is showing up in our management fees. Which grew 18% last year.
Speaker #2: Accelerating relative to the last three-year annual growth rate of 16%. Now let's talk about monetizations. There's also been a lot of more market focus on how difficult exits have been in our industry.
Speaker #2: been the case for That has not us. Our portfolio is mature, global, and well-constructed. We've been disciplined around pacing and diversification for a long time.
Speaker #2: And that is showing up in record-embedded gains and a healthy pipeline of realizations across strategies and regions. We are not forced sellers. If markets are constructive, we will monetize.
Speaker #2: If conditions are less favorable, we can afford to be patient. Either way, the value is there. And finally, stepping KKR has been through many cycles in our 50 years.
Scott Nuttall: KKR has been through many cycles in our 50 years. We have learned, sometimes the hard way, that long-term performance is not about chasing favorable conditions. It's about building a firm and portfolios that can perform and compound through different environments. We feel very good about how KKR is positioned today across asset management, insurance, and strategic holdings, and we feel even better about where the firm is headed over the next several years. With that, we're happy to take your questions.
Scott Nuttall: KKR has been through many cycles in our 50 years. We have learned, sometimes the hard way, that long-term performance is not about chasing favorable conditions. It's about building a firm and portfolios that can perform and compound through different environments. We feel very good about how KKR is positioned today across asset management, insurance, and strategic holdings, and we feel even better about where the firm is headed over the next several years. With that, we're happy to take your questions.
Scott Nuttall: KKR has been through many cycles in our 50 years. We have learned, sometimes the hard way, that long-term performance is not about chasing favorable conditions. It's about building a firm and portfolios that can perform and compound through different environments. We feel very good about how KKR is positioned today across asset management, insurance, and strategic holdings, and we feel even better about where the firm is headed over the next several years. With that, we're happy to take your questions.
Speaker #2: We have learned sometimes the hard way that long-term performance is not about conditions. It's about building a firm and portfolios that can perform chasing favorable environments.
Speaker #2: We feel very good about how KKR is positioned today across asset management, insurance, and compound through different holdings. And we feel even better about where the firm is headed over the next several years.
Speaker #2: And with that, we're happy to take your
Speaker #2: questions. Thank you.
Operator: Thank you. We will now be conducting a question-and-answer session. We ask that all callers limit themselves to one question. If you have additional questions, you may re-queue, and those questions will be addressed, time permitting. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Thank you. Our first question comes from the line of Glenn Schorr with Evercore ISI. Please proceed with your question.
Operator: Thank you. We will now be conducting a question-and-answer session. We ask that all callers limit themselves to one question. If you have additional questions, you may re-queue, and those questions will be addressed, time permitting. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Thank you. Our first question comes from the line of Glenn Schorr with Evercore ISI. Please proceed with your question.
Operator: Thank you. We will now be conducting a question-and-answer session. We ask that all callers limit themselves to one question. If you have additional questions, you may re-queue, and those questions will be addressed, time permitting. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Thank you. Our first question comes from the line of Glenn Schorr with Evercore ISI. Please proceed with your question.
Speaker #1: We will
Speaker #1: Session. We ask that all callers limit themselves to one question. If you have additional questions, you may requeue, and those questions will be addressed time permitting.
Speaker #1: If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the star two if you would like to remove your question from the question queue.
Speaker #1: queue. For participants You may press strategic using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.
Speaker #1: Thank you, Glenn Shore with Evercore. Please proceed. Our first question comes from the line.
Speaker #2: Hi, thanks so much. I definitely agree with a lot of your big-picture outlook stuff. I want to get to the elephant in the room and talk about—so, how does someone like you—this is a question for everybody, but how have you re-underwritten your private portfolios for tariffs and AI?
Speaker #2: Hi, thanks so much. I definitely agree with a lot of your big picture outlook stuff. I want to get to the elephant in the room and talk about, so how does someone like you, this is a question for everybody, but how have you re-underwritten your private portfolios, pipeline What actions have you taken?
Glenn Schorr: Hi, thanks so much. I definitely agree with a lot of your big picture outlook stuff. I wanna get to the elephant in the room and talk about... So how does someone like you, this is a question for everybody, but how have you re-underwritten your private portfolios, your balance sheet, even in your monetization pipeline for tariffs and AI? You know, what actions have you taken? What actions can you take to de-risk? Like, everyone's trying to get at the same thing of what don't we know? What's in there that why can't this monetization pipeline get back, get out in a strong banking environment? So sorry, I know there's a lot in there, but it's like the thing. So thanks so much.
Glenn Schorr: Hi, thanks so much. I definitely agree with a lot of your big picture outlook stuff. I wanna get to the elephant in the room and talk about... So how does someone like you, this is a question for everybody, but how have you re-underwritten your private portfolios, your balance sheet, even in your monetization pipeline for tariffs and AI? You know, what actions have you taken? What actions can you take to de-risk? Like, everyone's trying to get at the same thing of what don't we know? What's in there that why can't this monetization pipeline get back, get out in a strong banking environment? So sorry, I know there's a lot in there, but it's like the thing. So thanks so much.
Glenn Schorr: Hi, thanks so much. I definitely agree with a lot of your big picture outlook stuff. I wanna get to the elephant in the room and talk about... So how does someone like you, this is a question for everybody, but how have you re-underwritten your private portfolios, your balance sheet, even in your monetization pipeline for tariffs and AI? You know, what actions have you taken? What actions can you take to de-risk? Like, everyone's trying to get at the same thing of what don't we know? What's in there that why can't this monetization pipeline get back, get out in a strong banking environment? So sorry, I know there's a lot in there, but it's like the thing. So thanks so much.
Speaker #2: What actions can you take to at the same thing de-risk? Everyone's trying to get know, what's in there that why can't of what don't we this monetization pipeline get back out in a strong banking environment?
Speaker #2: So sorry, I know there's a lot in there, but it's like the thing. Thanks so much.
Speaker #3: No, I really thoughts and maybe Rob can add on. You asked about two things in AI. I think on the tariff front, it's pretty straightforward.
Scott Nuttall: No, I really appreciate the question, Glenn, and let me give you a couple of thoughts, and maybe Rob can add on. You asked about two things in there. One was tariffs, and one was AI. I think on the tariff front, it's pretty straightforward. I think we shared some of this data. It hasn't changed. We got a little bit fortunate, candidly, during the first Trump administration. We got a little bit of a look-see as to what could be coming, and so that allowed us to really rethink supply chains and be thoughtful about making sure we had the right exposures. And then COVID, obviously, gave us a reinforcement of that focus.
Scott Nuttall: No, I really appreciate the question, Glenn, and let me give you a couple of thoughts, and maybe Rob can add on. You asked about two things in there. One was tariffs, and one was AI. I think on the tariff front, it's pretty straightforward. I think we shared some of this data. It hasn't changed. We got a little bit fortunate, candidly, during the first Trump administration. We got a little bit of a look-see as to what could be coming, and so that allowed us to really rethink supply chains and be thoughtful about making sure we had the right exposures. And then COVID, obviously, gave us a reinforcement of that focus.
Scott Nuttall: No, I really appreciate the question, Glenn, and let me give you a couple of thoughts, and maybe Rob can add on. You asked about two things in there. One was tariffs, and one was AI. I think on the tariff front, it's pretty straightforward. I think we shared some of this data. It hasn't changed. We got a little bit fortunate, candidly, during the first Trump administration. We got a little bit of a look-see as to what could be coming, and so that allowed us to really rethink supply chains and be thoughtful about making sure we had the right exposures. And then COVID, obviously, gave us a reinforcement of that focus.
Speaker #3: And let me give you a couple of And so that allowed us to be thoughtful about making sure we have the right exposures and then COVID really rethink supply chains and obviously gave us a reinforcement of that focus.
Speaker #3: I think we shared some of this data. It hasn't changed. We got a little bit fortunate, candidly, during the first Trump administration. We got a little bit of a look-see as to what could be coming.
Speaker #3: So, we have single-digit percentage of our portfolio, and a lot of our business is low single-digit percentage of our portfolio, that we've got any anxiety about—relaxed on that front.
Scott Nuttall: So we have single-digit percentage of our portfolio, and a lot of our business is low single-digit percentage of our portfolio that we've got any anxiety about, about tariffs. So we feel very comfortable and relaxed on that front. On the AI front and, you know, some of the recent volatility that we're seeing, maybe just a couple of thoughts for you. First, as you know, you know, when we invest, especially in the private markets, we're thinking about what the world looks like 5 to 15 years out. And what we own today is a result of decisions we've made over the last several years. So I would say the recent volatility speaks to new anxiety for the market around potential disruption risks, but it is not new anxiety for us.
Scott Nuttall: So we have single-digit percentage of our portfolio, and a lot of our business is low single-digit percentage of our portfolio that we've got any anxiety about, about tariffs. So we feel very comfortable and relaxed on that front. On the AI front and, you know, some of the recent volatility that we're seeing, maybe just a couple of thoughts for you. First, as you know, you know, when we invest, especially in the private markets, we're thinking about what the world looks like 5 to 15 years out. And what we own today is a result of decisions we've made over the last several years. So I would say the recent volatility speaks to new anxiety for the market around potential disruption risks, but it is not new anxiety for us.
Scott Nuttall: So we have single-digit percentage of our portfolio, and a lot of our business is low single-digit percentage of our portfolio that we've got any anxiety about, about tariffs. So we feel very comfortable and relaxed on that front. On the AI front and, you know, some of the recent volatility that we're seeing, maybe just a couple of thoughts for you. First, as you know, you know, when we invest, especially in the private markets, we're thinking about what the world looks like 5 to 15 years out. And what we own today is a result of decisions we've made over the last several years. So I would say the recent volatility speaks to new anxiety for the market around potential disruption risks, but it is not new anxiety for us.
Speaker #3: On the AI front and some of the recent volatility that we're seeing, maybe just a couple of thoughts for you. First, as you know, when we invest, especially in the private markets, we're thinking about what the world looks like 5 to 15 years out.
Speaker #3: what we own today is a result And of decisions we've made over the last several recent volatility speaks to new anxiety for the market around potential disruption risks.
Speaker #3: For us, we've been focused on AI-driven competition, and it's not new—anxiety, disruption, risks—for the last several years. We've also been focused, as we've talked about, on all the opportunities that come with this space.
Scott Nuttall: So we've been focused on AI-driven competition and disruption risk for the last several years. We've also been focused, as we've talked about, on all the opportunities that come out of what's developing in that space. But, you know, having been through many cycles, a lot of the answer to your question is you can't pivot on a dime... So we have been focused on building portfolios that have the exposures that we want. And so, you know, that focus on portfolio construction, I think, is a very important thing for everybody to understand. So as you know, we talked about this quite a bit. We've been focused on linear pacing for the last many years. So a lot of what happened in our space was over deployment in 2021, including in tech and software names. We do not have that issue at all.
Scott Nuttall: So we've been focused on AI-driven competition and disruption risk for the last several years. We've also been focused, as we've talked about, on all the opportunities that come out of what's developing in that space. But, you know, having been through many cycles, a lot of the answer to your question is you can't pivot on a dime... So we have been focused on building portfolios that have the exposures that we want. And so, you know, that focus on portfolio construction, I think, is a very important thing for everybody to understand. So as you know, we talked about this quite a bit. We've been focused on linear pacing for the last many years. So a lot of what happened in our space was over deployment in 2021, including in tech and software names. We do not have that issue at all.
Scott Nuttall: So we've been focused on AI-driven competition and disruption risk for the last several years. We've also been focused, as we've talked about, on all the opportunities that come out of what's developing in that space. But, you know, having been through many cycles, a lot of the answer to your question is you can't pivot on a dime... So we have been focused on building portfolios that have the exposures that we want. And so, you know, that focus on portfolio construction, I think, is a very important thing for everybody to understand. So as you know, we talked about this quite a bit. We've been focused on linear pacing for the last many years. So a lot of what happened in our space was over deployment in 2021, including in tech and software names. We do not have that issue at all.
Speaker #3: out of what's developing in that question is you can't pivot on a cycles, a lot of the answer to your focused on building dime.
Speaker #3: want. And so that So we have been focus on portfolio construction, I think, is a very important thing for everybody to understand. So as you know, we talk about pacing for the last many years.
Speaker #3: So, a lot of what happened in our space was overdeployment in 2021, including in tech and in software names. We do not have that issue at all.
Speaker #3: We've been across industries and investing by behind opportunities globally with really strong risk-reward. And we took an inventory of our portfolio over the last few years.
Scott Nuttall: We've been investing behind opportunities across industries and globally with really strong risk reward. We took an inventory of our portfolio the last few years, and part of the answer to your question is we have been selling businesses. When we did that inventory and said, "Okay, is AI an opportunity, a threat, or a question mark?" Where it was a threat or a question mark, we started selling assets several years ago. As a result of that, we have the exposures that we want today. Not to say there won't be surprises, but our level of anxiety is pretty low because we've been thinking through this for the last several years and built portfolios informed by those concerns.
Scott Nuttall: We've been investing behind opportunities across industries and globally with really strong risk reward. We took an inventory of our portfolio the last few years, and part of the answer to your question is we have been selling businesses. When we did that inventory and said, "Okay, is AI an opportunity, a threat, or a question mark?" Where it was a threat or a question mark, we started selling assets several years ago. As a result of that, we have the exposures that we want today. Not to say there won't be surprises, but our level of anxiety is pretty low because we've been thinking through this for the last several years and built portfolios informed by those concerns.
Scott Nuttall: We've been investing behind opportunities across industries and globally with really strong risk reward. We took an inventory of our portfolio the last few years, and part of the answer to your question is we have been selling businesses. When we did that inventory and said, "Okay, is AI an opportunity, a threat, or a question mark?" Where it was a threat or a question mark, we started selling assets several years ago. As a result of that, we have the exposures that we want today. Not to say there won't be surprises, but our level of anxiety is pretty low because we've been thinking through this for the last several years and built portfolios informed by those concerns.
Speaker #3: And part of the answer to your this quite a bit. question is we have been selling businesses when we did that inventory and said, "Okay, is AI an We've been focused on linear opportunity?
Speaker #3: A threat? Or a question mark?" Where it was a threat or a question mark, we started selling assets several years ago. And as a result of that, we have the exposures that we want today.
Speaker #3: surprises, but our level of Not to say there won't be anxiety is pretty low because we've been thinking through this for the last several years and built portfolios informed by those concerns.
Scott Nuttall: To give you a sense of the number, 'cause I'm sure people are wondering, you know, software is about 7% of our AUM, and that is with, I would say, a highly inclusive definition of software. And so our concentration is well below our industry, well below broad equity and credit indices. And the market right now, and as you know, this happens when there's this much emotion all at once, is painting everything with one brush. We would just caution that not all software investments are the same. For example, we had a great investment in a company called OneStream. Has a lot of growth ahead. We announced the sale of that business a month ago at a 30% premium, 4.5x multiple of invested capital for our clients. So it's not all the same.
Scott Nuttall: To give you a sense of the number, 'cause I'm sure people are wondering, you know, software is about 7% of our AUM, and that is with, I would say, a highly inclusive definition of software. And so our concentration is well below our industry, well below broad equity and credit indices. And the market right now, and as you know, this happens when there's this much emotion all at once, is painting everything with one brush. We would just caution that not all software investments are the same. For example, we had a great investment in a company called OneStream. Has a lot of growth ahead. We announced the sale of that business a month ago at a 30% premium, 4.5x multiple of invested capital for our clients. So it's not all the same.
Scott Nuttall: To give you a sense of the number, 'cause I'm sure people are wondering, you know, software is about 7% of our AUM, and that is with, I would say, a highly inclusive definition of software. And so our concentration is well below our industry, well below broad equity and credit indices. And the market right now, and as you know, this happens when there's this much emotion all at once, is painting everything with one brush. We would just caution that not all software investments are the same. For example, we had a great investment in a company called OneStream. Has a lot of growth ahead. We announced the sale of that business a month ago at a 30% premium, 4.5x multiple of invested capital for our clients. So it's not all the same.
Speaker #3: number, because I'm sure people are wondering, software is about To give you a sense of the 7% of our AUM, and that is with, I would say, a highly inclusive definition of software.
Speaker #3: And so our concentration is well below our industry, well below broad this happens when there's this much emotion, all at once, is painting everything with indices.
Speaker #3: one brush. We And the market right now, and as you know, software investments are the would just caution that not all same. For example, we have a great investment in a company called OneStream.
Speaker #3: It has a lot of growth ahead. We announced a sale of that business a month ago at a 30% premium four and a half times multiple of invested capital for our clients.
Speaker #3: So it's not the other thing I would just add before handing it over And so forget the business we're in, right? We have 118 billion dollars of dry powder.
Scott Nuttall: And so the other thing I would just add before handing it over to Rob is just don't forget the business we're in, right? We have $118 billion of dry powder. So our dry powder is multiples of any exposure we have, that we have AI-related anxiety about, several multiples. So this type of dislocation creates really strong return opportunities for us. And so volatility always creates opportunity in our business. Our focus on-- is making sure we don't waste it. We just had a firm call this morning, where that's part of what we talked about. You know, we got a hundred and... better part of $120 billion. How do we make sure we invest it well and take advantage of what's on offer?
Scott Nuttall: And so the other thing I would just add before handing it over to Rob is just don't forget the business we're in, right? We have $118 billion of dry powder. So our dry powder is multiples of any exposure we have, that we have AI-related anxiety about, several multiples. So this type of dislocation creates really strong return opportunities for us. And so volatility always creates opportunity in our business. Our focus on-- is making sure we don't waste it. We just had a firm call this morning, where that's part of what we talked about. You know, we got a hundred and... better part of $120 billion. How do we make sure we invest it well and take advantage of what's on offer?
Scott Nuttall: And so the other thing I would just add before handing it over to Rob is just don't forget the business we're in, right? We have $118 billion of dry powder. So our dry powder is multiples of any exposure we have, that we have AI-related anxiety about, several multiples. So this type of dislocation creates really strong return opportunities for us. And so volatility always creates opportunity in our business. Our focus on-- is making sure we don't waste it. We just had a firm call this morning, where that's part of what we talked about. You know, we got a hundred and... better part of $120 billion. How do we make sure we invest it well and take advantage of what's on offer?
Speaker #3: So our dry powder is multiples of any exposure we have that we have AI-related anxiety about. Several multiples. So this type of dislocation creates really strong return opportunities for us.
Speaker #3: And so volatility always creates opportunity in our to Rob, is just don't business. Our focus is making sure we don't waste it. We just had a firm call this morning where that's part of what we talked about.
Speaker #3: 120 billion dollars. How do we make sure we invest it well and take it advantage of what's on offer? And that's really the focus around here.
Scott Nuttall: That's really the focus around here, 'cause as we look back at moments like this, where the market gets anxious, these tend to be amazing vintage years for investments, as long as you stay focused on what you can control. Rob, anything to add?
Scott Nuttall: That's really the focus around here, 'cause as we look back at moments like this, where the market gets anxious, these tend to be amazing vintage years for investments, as long as you stay focused on what you can control. Rob, anything to add?
Scott Nuttall: That's really the focus around here, 'cause as we look back at moments like this, where the market gets anxious, these tend to be amazing vintage years for investments, as long as you stay focused on what you can control. Rob, anything to add?
Robert Lewin: Yeah, Glenn, just on your point as it relates to monetization activity, I, I think the biggest driver of the limited monetizations across the industry is what Scott talked about in the overconcentration in the 2021 vintage. As you know, you know, we didn't have that, and that's as big a reason as any on why we've have meaningfully outperformed on monetizations over the past couple of years. And that momentum has continued for us. We look at where we sit today, we've got roughly a little over $900 million of visibility from signed deals or deals that have already happened to monetization-related revenue coming, and that's probably a first half number for us. It's hard to distinguish in some of these deals whether they're gonna close in March or April.
Robert Lewin: Yeah, Glenn, just on your point as it relates to monetization activity, I, I think the biggest driver of the limited monetizations across the industry is what Scott talked about in the overconcentration in the 2021 vintage. As you know, you know, we didn't have that, and that's as big a reason as any on why we've have meaningfully outperformed on monetizations over the past couple of years. And that momentum has continued for us. We look at where we sit today, we've got roughly a little over $900 million of visibility from signed deals or deals that have already happened to monetization-related revenue coming, and that's probably a first half number for us. It's hard to distinguish in some of these deals whether they're gonna close in March or April.
Robert Lewin: Yeah, Glenn, just on your point as it relates to monetization activity, I, I think the biggest driver of the limited monetizations across the industry is what Scott talked about in the overconcentration in the 2021 vintage. As you know, you know, we didn't have that, and that's as big a reason as any on why we've have meaningfully outperformed on monetizations over the past couple of years. And that momentum has continued for us. We look at where we sit today, we've got roughly a little over $900 million of visibility from signed deals or deals that have already happened to monetization-related revenue coming, and that's probably a first half number for us. It's hard to distinguish in some of these deals whether they're gonna close in March or April.
Speaker #2: activity, I think the biggest driver of the limited what Scott talked about in the over-concentration in the 2021 vintage. As you monetizations across the industry is know, we didn't have that, and that's as big a reason as any on why we have meaningfully outperformed on monetizations over the past couple of years.
Speaker #2: And that momentum has continued for us. If we look at where we sit today, we've got roughly a little over 900 million dollars of visibility from signed deals or deals that have already happened of monetization-related revenue.
Speaker #2: Coming in, that's probably a first half number for whether they're going to close in March or us. April. And I would just contrast that to where we were at this time It's hard to distinguish in some of these deals last year.
Robert Lewin: I would just contrast that to where we were at this time last year, on this call, where that number was approximately $400 million. Our momentum on the monetization front continues to really accelerate.
Robert Lewin: I would just contrast that to where we were at this time last year, on this call, where that number was approximately $400 million. Our momentum on the monetization front continues to really accelerate.
Robert Lewin: I would just contrast that to where we were at this time last year, on this call, where that number was approximately $400 million. Our momentum on the monetization front continues to really accelerate.
Speaker #2: On this call, where that number was approximately 400 million. So our momentum on the monetization front continues to really
Operator: Our next question comes from the line of Craig Siegenthaler with Bank of America. Please proceed with your question.
Operator: Our next question comes from the line of Craig Siegenthaler with Bank of America. Please proceed with your question.
Operator: Our next question comes from the line of Craig Siegenthaler with Bank of America. Please proceed with your question.
Speaker #3: Craig Siegenthaler with Bank of America. Please proceed with your question.
Craig Siegenthaler: Hey, good morning, everyone. Hope you're doing well. Our question is on the record investment result, and your linear deployment model across the cycle. Was this strong 2025 result a level that you expect to build off of just, you know, really given your linear approach to deployments? And then also, what do you view as the key themes and factors for record deployment, just given that public equities were, were higher and also credit spreads were generally tighter than the prior two years, too?
Craig Siegenthaler: Hey, good morning, everyone. Hope you're doing well. Our question is on the record investment result, and your linear deployment model across the cycle. Was this strong 2025 result a level that you expect to build off of just, you know, really given your linear approach to deployments? And then also, what do you view as the key themes and factors for record deployment, just given that public equities were, were higher and also credit spreads were generally tighter than the prior two years, too?
Craig Siegenthaler: Hey, good morning, everyone. Hope you're doing well. Our question is on the record investment result, and your linear deployment model across the cycle. Was this strong 2025 result a level that you expect to build off of just, you know, really given your linear approach to deployments? And then also, what do you view as the key themes and factors for record deployment, just given that public equities were, were higher and also credit spreads were generally tighter than the prior two years, too?
Speaker #4: Hey, good morning, everyone. Hope you're doing well. Our question is on the record investment result and your linear deployment model across the cycle. Was this strong 2025 result a level that you expected to build off of just really given your linear approach to deployments?
Speaker #4: And then also, what do you view as the key themes and factors for record deployment? Just given that public equities were higher and also credit spreads were generally tighter than the prior two years still.
Craig Larson: Hey, Craig, it's Craig. Why don't I start? Thanks for the question. Look, in terms of activity in the quarter, you're right. Like, I think that we had very broad-based deployment in the quarter, really across strategies, across geographies. If you add real assets and private equity together, invested around $16 billion, just over $8 billion in PE and just under $8 billion in real assets, and then $15 billion in credit. So I think you're seeing diversification and breadth. In terms of themes, I think it's worth mentioning the take private activity you've seen broadly as well as over the last handful of years. In 2025, you've seen activity here. It's on a global basis. We executed take privates in Japan and Germany, in the UK, in India, as well as in Sweden.
Craig Larson: Hey, Craig, it's Craig. Why don't I start? Thanks for the question. Look, in terms of activity in the quarter, you're right. Like, I think that we had very broad-based deployment in the quarter, really across strategies, across geographies. If you add real assets and private equity together, invested around $16 billion, just over $8 billion in PE and just under $8 billion in real assets, and then $15 billion in credit. So I think you're seeing diversification and breadth. In terms of themes, I think it's worth mentioning the take private activity you've seen broadly as well as over the last handful of years. In 2025, you've seen activity here. It's on a global basis. We executed take privates in Japan and Germany, in the UK, in India, as well as in Sweden.
Speaker #5: Hey, Craig. It's Craig Water. Nice to start. Thanks for the question. Look, in terms of activity in the quarter, you're right. I think that we had very broad-based deployment.
Craig Larson: Hey, Craig, it's Craig. Why don't I start? Thanks for the question. Look, in terms of activity in the quarter, you're right. Like, I think that we had very broad-based deployment in the quarter, really across strategies, across geographies. If you add real assets and private equity together, invested around $16 billion, just over $8 billion in PE and just under $8 billion in real assets, and then $15 billion in credit. So I think you're seeing diversification and breadth. In terms of themes, I think it's worth mentioning the take private activity you've seen broadly as well as over the last handful of years. In 2025, you've seen activity here. It's on a global basis. We executed take privates in Japan and Germany, in the UK, in India, as well as in Sweden.
Speaker #5: Across geographies, if you quarter, really across strategies, add real assets and private equity—just over $8 billion in PE and real assets, and then $15 billion together, invested around $16 billion in credit.
Speaker #5: So I think you're seeing diversification and breadth. In terms of themes, I think the take-private activity you've seen is worth mentioning broadly, as well as over the last handful of years.
Speaker #5: In '25, you've seen activity here; it's on a global basis. We executed take-privates in Japan and Germany and the UK and Sweden. And if you look back at this activity, India.
Craig Larson: If you look back at this activity since 2022, we've invested almost behind 30 take-privates globally, and we think over this period of time, we've been as active as anybody in our industry. Rob mentioned Asia for us; it's just an area where you're seeing a healthy amount of activity. Again, a big driver of global growth. I think you saw a transaction this week announced in the digital infrastructure space. Again, it's probably the most recent example, and it does feel like our positioning in the market, I'd say Asia broadly, as well as Asia infrastructure, more specifically, is something that's being recognized. I do think there are two specific transactions that are just kind of interesting. One on 24 December, actually, so it would have been an investment that probably would have been easy to miss.
Craig Larson: If you look back at this activity since 2022, we've invested almost behind 30 take-privates globally, and we think over this period of time, we've been as active as anybody in our industry. Rob mentioned Asia for us; it's just an area where you're seeing a healthy amount of activity. Again, a big driver of global growth. I think you saw a transaction this week announced in the digital infrastructure space. Again, it's probably the most recent example, and it does feel like our positioning in the market, I'd say Asia broadly, as well as Asia infrastructure, more specifically, is something that's being recognized. I do think there are two specific transactions that are just kind of interesting. One on 24 December, actually, so it would have been an investment that probably would have been easy to miss.
Craig Larson: If you look back at this activity since 2022, we've invested almost behind 30 take-privates globally, and we think over this period of time, we've been as active as anybody in our industry. Rob mentioned Asia for us; it's just an area where you're seeing a healthy amount of activity. Again, a big driver of global growth. I think you saw a transaction this week announced in the digital infrastructure space. Again, it's probably the most recent example, and it does feel like our positioning in the market, I'd say Asia broadly, as well as Asia infrastructure, more specifically, is something that's being recognized. I do think there are two specific transactions that are just kind of interesting. One on 24 December, actually, so it would have been an investment that probably would have been easy to miss.
Speaker #5: since 2022, we've invested almost As well as in globally. And we think over this period of time, behind 30 take privates we've been as active as anybody in our industry.
Speaker #5: Rob mentioned Asia for us. It's just an area where you're seeing a healthy amount of activity. Again, a big driver of global growth. announced in the digital infrastructure I think you saw a transaction this week space.
Speaker #5: Again, it's probably the most recent example. And it does feel like, say, Asia broadly, as well as Asia infrastructure more specifically, is something that's being recognized.
Speaker #5: I do think there are two specific transactions that are just kind of interesting. One in on December 24th, actually. So it would have been an investment that probably would have been easy to miss.
Craig Larson: We announced in Japan the carve-out of, of the real estate assets from Sapporo, one of the largest announced real estate investments in Asia in 2025. Really a great example of how we can collaborate across businesses. It leveraged the relationship as well as the carve-out expertise of our real estate team, our private equity team, the activity with KJRM and their ability on financing, as well as our capital markets team from a syndication standpoint. And then a handful of weeks ago, we announced an alt transaction for Global Atlantic in Europe in the renewable space. I think we've talked a lot about these calls on how we're looking to use all of our sourcing to originate differentiated opportunities for GA. I think it's a great example, again, of the connectivity.
Craig Larson: We announced in Japan the carve-out of, of the real estate assets from Sapporo, one of the largest announced real estate investments in Asia in 2025. Really a great example of how we can collaborate across businesses. It leveraged the relationship as well as the carve-out expertise of our real estate team, our private equity team, the activity with KJRM and their ability on financing, as well as our capital markets team from a syndication standpoint. And then a handful of weeks ago, we announced an alt transaction for Global Atlantic in Europe in the renewable space. I think we've talked a lot about these calls on how we're looking to use all of our sourcing to originate differentiated opportunities for GA. I think it's a great example, again, of the connectivity.
Speaker #5: We announced in Japan the carve-out of the real estate assets from Sapporo, one of the 2025—really a great example of how we can make investments in Asia in businesses and leverage the relationship as well as the carve-out expertise of our real estate team, our private equity team, the activity with KGRM and their ability on financing, as well as our capital markets team from a syndication standpoint.
Craig Larson: We announced in Japan the carve-out of, of the real estate assets from Sapporo, one of the largest announced real estate investments in Asia in 2025. Really a great example of how we can collaborate across businesses. It leveraged the relationship as well as the carve-out expertise of our real estate team, our private equity team, the activity with KJRM and their ability on financing, as well as our capital markets team from a syndication standpoint. And then a handful of weeks ago, we announced an alt transaction for Global Atlantic in Europe in the renewable space. I think we've talked a lot about these calls on how we're looking to use all of our sourcing to originate differentiated opportunities for GA. I think it's a great example, again, of the connectivity.
Speaker #5: And then a handful of weeks ago, we announced an alts transaction for global land in Europe. And the renewable space. I think we've talked a lot about these calls.
Speaker #5: On how we're looking to use all of our sourcing to originate differentiated opportunities for GA, I think it's a great example again of the connectivity.
Craig Larson: And in terms of the go forward and what this means and the level that we're at, just a couple of stats that are interesting in this more broadly. So look, the firm has grown a great deal, and if you look at deployment as an example, in private equity and real assets, and if you look at that as a percentage of our private markets AUM, like, those statistics are not going to be perfectly linear, but I think it's kind of an interesting statistic. If you look 3, 4, and 5 years ago, deployment was 13, 15, and 16.5% of that AUM. In 2025, it was 12. So again, I think the deployment numbers, you're right, in aggregate, are up on an absolute basis, no question.
Craig Larson: And in terms of the go forward and what this means and the level that we're at, just a couple of stats that are interesting in this more broadly. So look, the firm has grown a great deal, and if you look at deployment as an example, in private equity and real assets, and if you look at that as a percentage of our private markets AUM, like, those statistics are not going to be perfectly linear, but I think it's kind of an interesting statistic. If you look 3, 4, and 5 years ago, deployment was 13, 15, and 16.5% of that AUM. In 2025, it was 12. So again, I think the deployment numbers, you're right, in aggregate, are up on an absolute basis, no question.
Craig Larson: And in terms of the go forward and what this means and the level that we're at, just a couple of stats that are interesting in this more broadly. So look, the firm has grown a great deal, and if you look at deployment as an example, in private equity and real assets, and if you look at that as a percentage of our private markets AUM, like, those statistics are not going to be perfectly linear, but I think it's kind of an interesting statistic. If you look 3, 4, and 5 years ago, deployment was 13, 15, and 16.5% of that AUM. In 2025, it was 12. So again, I think the deployment numbers, you're right, in aggregate, are up on an absolute basis, no question.
Speaker #5: go-forward and what this means and the level that we're at, just a couple of stats that are interesting in this more largest announced real estate deal.
Speaker #5: broadly. And if So look, the firm has grown a great you look at deployment as an example in private equity and real assets, and if you look at that as a percentage of our private markets AUM, those statistics are not going to be perfectly And in terms of the statistic.
Speaker #5: Linear, but I think it's kind of interesting. If you look three, four, and five years ago, deployment was one and a half percent of that AUM.
Speaker #5: In '25, it was 12. So again, I think the deployment numbers, you're right, and aggregate are 13, 15, and 16 up on an absolute basis.
Speaker #5: No question. But I think as you think about the opportunity for us going of the footprint that we have forward, it's also important to think that's scaling in asset classes as well
Craig Larson: But I think as you think about the opportunity set for us going forward, it's also important to think of the footprint that we have that's scaling in asset classes as well as across regions.
Craig Larson: But I think as you think about the opportunity set for us going forward, it's also important to think of the footprint that we have that's scaling in asset classes as well as across regions.
Craig Larson: But I think as you think about the opportunity set for us going forward, it's also important to think of the footprint that we have that's scaling in asset classes as well as across regions.
Speaker #5: as across regions. Yeah, Craig,
Scott Nuttall: Yeah, Craig, thanks for the question. It's Scott. I do think you're right. Last year was a record deployment year for us. And to answer your question, we expect to deploy more this year. I would note last year was record, despite, you know, some of the market hiccups around the tariff dislocation in the spring. But as Craig said, you got to remember just how global we are. So last year was a record year for European deployment for us, is just one example. But as we look around the world, intra-Asia, trade, power, digitalization, companies moving from capital heavy to capital light, which feeds our ABF insurance businesses, Japan as a market, holistically across asset classes, life sciences, infra, ABF, you name it, that's all global. We see a lot of opportunity out there.
Scott Nuttall: Yeah, Craig, thanks for the question. It's Scott. I do think you're right. Last year was a record deployment year for us. And to answer your question, we expect to deploy more this year. I would note last year was record, despite, you know, some of the market hiccups around the tariff dislocation in the spring. But as Craig said, you got to remember just how global we are. So last year was a record year for European deployment for us, is just one example. But as we look around the world, intra-Asia, trade, power, digitalization, companies moving from capital heavy to capital light, which feeds our ABF insurance businesses, Japan as a market, holistically across asset classes, life sciences, infra, ABF, you name it, that's all global. We see a lot of opportunity out there.
Scott Nuttall: Yeah, Craig, thanks for the question. It's Scott. I do think you're right. Last year was a record deployment year for us. And to answer your question, we expect to deploy more this year. I would note last year was record, despite, you know, some of the market hiccups around the tariff dislocation in the spring. But as Craig said, you got to remember just how global we are. So last year was a record year for European deployment for us, is just one example. But as we look around the world, intra-Asia, trade, power, digitalization, companies moving from capital heavy to capital light, which feeds our ABF insurance businesses, Japan as a market, holistically across asset classes, life sciences, infra, ABF, you name it, that's all global. We see a lot of opportunity out there.
Speaker #1: thanks for the question, Scott. I do think you're right. Last year was a record deployment year for us in answering your question. We expected to deploy last year was a record despite some of the market hiccups around the tariff Craig said, you got to remember just how global we are.
Speaker #1: dislocation in the spring. But as So last year was a record year for European deployment for us. It's just one example. But as we look around the world, intra-Asia trade, power, digitalization, companies moving from capital-heavy to capital-light, which feeds our ABF insurance businesses, Japan, as a market, holistically across asset classes, life sciences, ABF, you name it.
Speaker #1: That's all global. We see a lot of opportunity out there. And as I said, with the dry powder we have, and a little bit more volatility, we always think this means what's going on right now is the investment opportunities will be more interesting.
Scott Nuttall: As I said, with the dry powder we have and a little bit more volatility, all we think this means, what's going on right now, is the investment opportunities will be more interesting and our earnings will be higher 3 to 5 years from now as a result.
Scott Nuttall: As I said, with the dry powder we have and a little bit more volatility, all we think this means, what's going on right now, is the investment opportunities will be more interesting and our earnings will be higher 3 to 5 years from now as a result.
Scott Nuttall: As I said, with the dry powder we have and a little bit more volatility, all we think this means, what's going on right now, is the investment opportunities will be more interesting and our earnings will be higher 3 to 5 years from now as a result.
Speaker #1: And our earnings will be higher three to five years from now as a
Speaker #1: And our earnings will be higher three to five years from now as a result.
Speaker #3: Our next question comes from a line of Alex Blastine with Goldman Sachs. Please proceed with your question.
Operator: Our next question comes from the line of Alex Blostein with Goldman Sachs. Please proceed with your question.
Operator: Our next question comes from the line of Alex Blostein with Goldman Sachs. Please proceed with your question.
Operator: Our next question comes from the line of Alex Blostein with Goldman Sachs. Please proceed with your question.
Alexander Blostein: Hey, guys. Good morning. Just to follow up on Glenn's question and, Scott, your answer. Obviously, lots of anxiety in the market. It obviously continues today. So when you think about the more durable part of the business, and Rob, I heard you talk about sort of confidence around exceeding the FRE target you set out for 2026, I think it was 450+, can you talk maybe through the building blocks, your confidence levels in those building blocks, and then be specifically with respect to management fees, what you expect that growth to look like in 2026?
Alexander Blostein: Hey, guys. Good morning. Just to follow up on Glenn's question and, Scott, your answer. Obviously, lots of anxiety in the market. It obviously continues today. So when you think about the more durable part of the business, and Rob, I heard you talk about sort of confidence around exceeding the FRE target you set out for 2026, I think it was 450+, can you talk maybe through the building blocks, your confidence levels in those building blocks, and then be specifically with respect to management fees, what you expect that growth to look like in 2026?
Alexander Blostein: Hey, guys. Good morning. Just to follow up on Glenn's question and, Scott, your answer. Obviously, lots of anxiety in the market. It obviously continues today. So when you think about the more durable part of the business, and Rob, I heard you talk about sort of confidence around exceeding the FRE target you set out for 2026, I think it was 450+, can you talk maybe through the building blocks, your confidence levels in those building blocks, and then be specifically with respect to management fees, what you expect that growth to look like in 2026?
Speaker #1: Hey, guys. Good morning. Just to follow up on Glenn's question and Scott, your answer, obviously lots of today. So when you think anxiety in the market.
Speaker #1: about the more durable part of the business, and Rob, I heard you talk about sort of It obviously continues confidence around exceeding the FRE target you set out for 2026, I think it was 450 plus can you talk maybe through the building blocks, your confidence levels, and those building blocks?
Speaker #1: And management fees, what do you expect that growth to then be, specifically with respect to—
Speaker #1: look like in '26? Right.
Robert Lewin: Great. Yeah. Thanks a lot for the question, Alex. So let me, you know, walk you through where we stand as it relates to fee-related earnings, and I'll go, component by component. We've got a lot of momentum on the management fee, side of things, and have been for some time, been growing at above industry level growth rates. The best forward indicator that we have for management fees is, of course, capital raising. We come off a year where we had record capital raising, almost $130 billion, and we're on our way to meaningfully exceed our $300+ billion dollar fundraising target that we set out from 2024 to 2026. So feel really good about the trajectory on management fees.
Robert Lewin: Great. Yeah. Thanks a lot for the question, Alex. So let me, you know, walk you through where we stand as it relates to fee-related earnings, and I'll go, component by component. We've got a lot of momentum on the management fee, side of things, and have been for some time, been growing at above industry level growth rates. The best forward indicator that we have for management fees is, of course, capital raising. We come off a year where we had record capital raising, almost $130 billion, and we're on our way to meaningfully exceed our $300+ billion dollar fundraising target that we set out from 2024 to 2026. So feel really good about the trajectory on management fees.
Robert Lewin: Great. Yeah. Thanks a lot for the question, Alex. So let me, you know, walk you through where we stand as it relates to fee-related earnings, and I'll go, component by component. We've got a lot of momentum on the management fee, side of things, and have been for some time, been growing at above industry level growth rates. The best forward indicator that we have for management fees is, of course, capital raising. We come off a year where we had record capital raising, almost $130 billion, and we're on our way to meaningfully exceed our $300+ billion dollar fundraising target that we set out from 2024 to 2026. So feel really good about the trajectory on management fees.
Speaker #5: Alex, let me walk you through where we stand as it relates to fee-related earnings, and I'll component. We've got a lot of momentum on the management fee side of things.
Speaker #5: And have been for some time, been growing at above industry-level growth rates. And the best forward indicator that we have for management fees is, of course, capital raising.
Speaker #5: We come off a year where we had record capital raising—almost $130 billion. And we're on our way to meaningfully exceed our $300-plus billion fundraising target that we set out from 2024 to 2026.
Speaker #5: So feel really good about fees. Our capital markets business continues to generate really significant the trajectory on management outcomes. And I think it's incredibly well-positioned environment where deployment across our space continues to increase.
Robert Lewin: Our capital markets business continues to generate really significant outcomes, and I think is incredibly well-positioned environment, where deployment across our space continues to increase. I think about all the things that we're doing across KKR, now inclusive of the Arctos business, the opportunity to do more in insurance. You know, last year, we generated roughly $60 million of capital markets-related fees on the insurance side. We think that business can be in the hundreds of millions annually for us. And as deal flow returns in the mid-market sponsor community, I think we are very well positioned on the third-party capital markets side of our business. Fee-related performance revenue is starting to scale, and I think can really inflect upward over the course of the next 1 to 3 years.
Robert Lewin: Our capital markets business continues to generate really significant outcomes, and I think is incredibly well-positioned environment, where deployment across our space continues to increase. I think about all the things that we're doing across KKR, now inclusive of the Arctos business, the opportunity to do more in insurance. You know, last year, we generated roughly $60 million of capital markets-related fees on the insurance side. We think that business can be in the hundreds of millions annually for us. And as deal flow returns in the mid-market sponsor community, I think we are very well positioned on the third-party capital markets side of our business. Fee-related performance revenue is starting to scale, and I think can really inflect upward over the course of the next 1 to 3 years.
Robert Lewin: Our capital markets business continues to generate really significant outcomes, and I think is incredibly well-positioned environment, where deployment across our space continues to increase. I think about all the things that we're doing across KKR, now inclusive of the Arctos business, the opportunity to do more in insurance. You know, last year, we generated roughly $60 million of capital markets-related fees on the insurance side. We think that business can be in the hundreds of millions annually for us. And as deal flow returns in the mid-market sponsor community, I think we are very well positioned on the third-party capital markets side of our business. Fee-related performance revenue is starting to scale, and I think can really inflect upward over the course of the next 1 to 3 years.
Speaker #5: I think about all the things that we're doing across KKR, now inclusive of the ARCTOS business, and the opportunity to do more in insurance. Last year, we generated roughly $60 million of capital markets-related fees on the insurance side.
Speaker #5: We think that business can be in the hundreds of millions annually for us. And as deal flow returns in the mid-market sponsor community, I think we are very well positioned on the third-party capital markets side of our business.
Speaker #5: Fee-related performance revenue is starting to scale, and I think can really inflect upward over the course of the next one, two, three years. And then at this point, I think—some really important point—as you talked about, FRE, and that's really a margin point.
Robert Lewin: And then, at this point, I think it's a really important point as you talked about FRE, and that's really a margin point. And I think we have really demonstrated an ability to hold our operating costs below our revenue from a growth perspective, even as we've pursued substantial scaling across our business. And I'm going to give you a stat, and we were looking at this as part of our recent budgeting process, but I think it's a helpful one. If you look from the end of 2022, so really, post-COVID, through to, and I'm going to give you LTM 9/30 numbers from a comparable perspective. We have grown our management fees by 46% relative to our operating expenses by 21%. Now, compare that to our three closest peers, and it is pretty much the inverse.
Robert Lewin: And then, at this point, I think it's a really important point as you talked about FRE, and that's really a margin point. And I think we have really demonstrated an ability to hold our operating costs below our revenue from a growth perspective, even as we've pursued substantial scaling across our business. And I'm going to give you a stat, and we were looking at this as part of our recent budgeting process, but I think it's a helpful one. If you look from the end of 2022, so really, post-COVID, through to, and I'm going to give you LTM 9/30 numbers from a comparable perspective. We have grown our management fees by 46% relative to our operating expenses by 21%. Now, compare that to our three closest peers, and it is pretty much the inverse.
Robert Lewin: And then, at this point, I think it's a really important point as you talked about FRE, and that's really a margin point. And I think we have really demonstrated an ability to hold our operating costs below our revenue from a growth perspective, even as we've pursued substantial scaling across our business. And I'm going to give you a stat, and we were looking at this as part of our recent budgeting process, but I think it's a helpful one. If you look from the end of 2022, so really, post-COVID, through to, and I'm going to give you LTM 9/30 numbers from a comparable perspective. We have grown our management fees by 46% relative to our operating expenses by 21%. Now, compare that to our three closest peers, and it is pretty much the inverse.
Speaker #5: And I think ability to hold our operating we have really demonstrated an costs below our revenue from a growth perspective, even as we've pursued substantial scaling across our business.
Speaker #5: And I'm going to give you a stat, and we were looking at this as part of our recent budgeting process, but I think it's a helpful one.
Speaker #5: If you look from the end of 2022, so really post-COVID, through to, and I'm going to give you LTM 930 numbers from a comparable perspective, we have grown our management fees by 46% relative to our operating expenses by 21%.
Speaker #5: Closest peers, and it is pretty much—now, compare that to our three—the inverse. They've all grown their operating expense at a pace that exceeds their management by a pretty substantial margin.
Robert Lewin: They've all grown their operating expense at a pace that exceeds their management fees, and in two of the three, by a pretty substantial margin. And so overall, when you put that all together, the different opportunities we have to scale are on the fee side, plus the ability to get further operating leverage as we continue to invest back in the firm, makes us feel good about that FRE target. And then the last point, 'cause I think it's also helpful in context of thinking about our ability to achieve that $4.50+ target or meaningfully exceed it, is, you know, when we gave that target, that was a little over two years ago. And at the time, our LTM FRE per share was $2.55.
Robert Lewin: They've all grown their operating expense at a pace that exceeds their management fees, and in two of the three, by a pretty substantial margin. And so overall, when you put that all together, the different opportunities we have to scale are on the fee side, plus the ability to get further operating leverage as we continue to invest back in the firm, makes us feel good about that FRE target. And then the last point, 'cause I think it's also helpful in context of thinking about our ability to achieve that $4.50+ target or meaningfully exceed it, is, you know, when we gave that target, that was a little over two years ago. And at the time, our LTM FRE per share was $2.55.
Robert Lewin: They've all grown their operating expense at a pace that exceeds their management fees, and in two of the three, by a pretty substantial margin. And so overall, when you put that all together, the different opportunities we have to scale are on the fee side, plus the ability to get further operating leverage as we continue to invest back in the firm, makes us feel good about that FRE target. And then the last point, 'cause I think it's also helpful in context of thinking about our ability to achieve that $4.50+ target or meaningfully exceed it, is, you know, when we gave that target, that was a little over two years ago. And at the time, our LTM FRE per share was $2.55.
Speaker #5: And so overall, when you put that all together—fees, and in two of the three, by a scale, are on the fee side—plus the ability to, the different opportunities we have to continue to invest back in the firm, makes us feel good about that FRE target.
Speaker #5: And then the last point, because I think it's also helpful in context of thinking about our ability to achieve that 450-plus get further operating leverage as we target that was a little over two years ago.
Speaker #5: And at the time, our LTM FRE per share was $2.55. And so because of the momentum we have across all of those line items and our ability to get operating leverage, is why you've seen a really substantial growth we've had in FRE over a short time.
Robert Lewin: And so, because of the momentum we have across all of those line items and our ability to get operating leverage, is why you've seen the really substantial growth we've had in FRE over a short period of time.
Robert Lewin: And so, because of the momentum we have across all of those line items and our ability to get operating leverage, is why you've seen the really substantial growth we've had in FRE over a short period of time.
Robert Lewin: And so, because of the momentum we have across all of those line items and our ability to get operating leverage, is why you've seen the really substantial growth we've had in FRE over a short period of time.
Speaker #3: Our next question comes from a line of Mike Brown with UBS. Please proceed with your question.
Operator: Our next question comes from the line of Mike Brown with UBS. Please proceed with your question.
Operator: Our next question comes from the line of Mike Brown with UBS. Please proceed with your question.
Operator: Our next question comes from the line of Mike Brown with UBS. Please proceed with your question.
Speaker #1: Great. Thanks for taking my question. So Rob, thanks for the comments on the performance fees in an earlier question, but I target. You commented on the seven-dollar A&I specifically.
Mike Brown: Great, thanks for taking my question. So Rob, thanks for the comments on the $7 ANI target. You commented on the performance fees in an earlier question, but I wanted to ask on the investment income, specifically. 2021 was a record year at over $1.3 billion. 2022 came in strong at nearly $1 billion. There were some, certainly some unique drivers back then, but looking ahead here, what's the potential for this line? Should we expect some balance sheet exits that could move it higher?
Mike Brown: Great, thanks for taking my question. So Rob, thanks for the comments on the $7 ANI target. You commented on the performance fees in an earlier question, but I wanted to ask on the investment income, specifically. 2021 was a record year at over $1.3 billion. 2022 came in strong at nearly $1 billion. There were some, certainly some unique drivers back then, but looking ahead here, what's the potential for this line? Should we expect some balance sheet exits that could move it higher?
Michael Brown: Great, thanks for taking my question. So Rob, thanks for the comments on the $7 ANI target. You commented on the performance fees in an earlier question, but I wanted to ask on the investment income, specifically. 2021 was a record year at over $1.3 billion. 2022 came in strong at nearly $1 billion. There were some, certainly some unique drivers back then, but looking ahead here, what's the potential for this line? Should we expect some balance sheet exits that could move it higher?
Speaker #1: Wanted to ask on the investment income—2021 was a record year at over $1.3 billion. 2022 came in strong at nearly $1 billion. There were certainly some unique drivers back then, but looking ahead here, what's the potential for this line? Should we expect some balance sheet exits that could move it higher?
Speaker #5: Yeah. Thanks for the question. It's a good one. So the punchline is, as we think about budgeting for expect an increase in our the year and, of course, we're bottoms up, we do realized investment income through the course of the year.
Robert Lewin: Yeah. Thanks for the question. It's a good one. So the punchline is, as we think about budgeting for the year, and of course, we're bottoms up, we do expect an increase in our Realized Investment Income through the course of the year. And as we look out over the next couple of years, we do expect that line item to have an upward trajectory to it, and in some cases, I think, can have a meaningful upward trajectory. However, I think it's important to understand our Realized Investment Income line item in context of the broader firm, right?
Robert Lewin: Yeah. Thanks for the question. It's a good one. So the punchline is, as we think about budgeting for the year, and of course, we're bottoms up, we do expect an increase in our Realized Investment Income through the course of the year. And as we look out over the next couple of years, we do expect that line item to have an upward trajectory to it, and in some cases, I think, can have a meaningful upward trajectory. However, I think it's important to understand our Realized Investment Income line item in context of the broader firm, right?
Robert Lewin: Yeah. Thanks for the question. It's a good one. So the punchline is, as we think about budgeting for the year, and of course, we're bottoms up, we do expect an increase in our Realized Investment Income through the course of the year. And as we look out over the next couple of years, we do expect that line item to have an upward trajectory to it, and in some cases, I think, can have a meaningful upward trajectory. However, I think it's important to understand our Realized Investment Income line item in context of the broader firm, right?
Speaker #5: And as we look out over the next couple of years, we do expect that line item to have an upward trajectory to it. And in some cases, I think it can have a meaningful upward trajectory.
Speaker #5: However, I think it's important to understand our realized investment line item in context of the broader firm, right? What we've been doing with our balance sheet over the last several years on the asset management side of our balance sheet is taking every dollar of finite capital that we have available or marginal free cash flow and reinvesting it back into our firm for growth.
Robert Lewin: What we've been doing with our balance sheet over the last several years on the asset management side of our balance sheet is taking every dollar of finite capital that we have available or marginal free cash flow and reinvesting it back into our firm for growth, either in strategic M&A, like you saw this morning with Arctos, insurance, strategic holdings, share buybacks, all with the goal of increasing our recurring earnings per share. And so over time, while I do expect you're gonna see some increases in our realized investment income, you know, that line item over the long term, on a relative basis, should be decreasing to our more recurring earnings, as that's, you know, very central to our strategy on how we're allocating capital today.
Robert Lewin: What we've been doing with our balance sheet over the last several years on the asset management side of our balance sheet is taking every dollar of finite capital that we have available or marginal free cash flow and reinvesting it back into our firm for growth, either in strategic M&A, like you saw this morning with Arctos, insurance, strategic holdings, share buybacks, all with the goal of increasing our recurring earnings per share. And so over time, while I do expect you're gonna see some increases in our realized investment income, you know, that line item over the long term, on a relative basis, should be decreasing to our more recurring earnings, as that's, you know, very central to our strategy on how we're allocating capital today.
Robert Lewin: What we've been doing with our balance sheet over the last several years on the asset management side of our balance sheet is taking every dollar of finite capital that we have available or marginal free cash flow and reinvesting it back into our firm for growth, either in strategic M&A, like you saw this morning with Arctos, insurance, strategic holdings, share buybacks, all with the goal of increasing our recurring earnings per share. And so over time, while I do expect you're gonna see some increases in our realized investment income, you know, that line item over the long term, on a relative basis, should be decreasing to our more recurring earnings, as that's, you know, very central to our strategy on how we're allocating capital today.
Speaker #5: Either in strategic M&A, like you saw this morning with Arctos; insurance; strategic holdings; or share buybacks—all with the goal of increasing our recurring earnings per share.
Speaker #5: And so over increases in our realized investment time, while I do expect you're going to see some term on a relative basis should be decreasing to our more recurring income, that line item over the long earnings, as that's very central to our strategy on how we're allocating capital
Speaker #5: today.
Speaker #3: Our next question
Operator: Our next question comes from the line of Benjamin Budish with Barclays. Please proceed with your question.
Operator: Our next question comes from the line of Benjamin Budish with Barclays. Please proceed with your question.
Operator: Our next question comes from the line of Benjamin Budish with Barclays. Please proceed with your question.
Speaker #3: Comes from a line of Benjamin Buttigieg with Barclays. Please proceed with your question.
Speaker #3: question. Hi.
Benjamin Budish: Hi, good morning, and thank you for taking the question. I wonder if you could talk a little bit about the recent trends at Global Atlantic. It looks like you are a little bit above the, you know, kind of $250 per quarter target you've talked about, but you know, sifting through the pieces, it's, it's a little bit hard to tell. I think we're waiting for some data from the, the Q when it comes out, but it looks like perhaps the net investment spread may have narrowed a little bit.
Benjamin Budish: Hi, good morning, and thank you for taking the question. I wonder if you could talk a little bit about the recent trends at Global Atlantic. It looks like you are a little bit above the, you know, kind of $250 per quarter target you've talked about, but you know, sifting through the pieces, it's, it's a little bit hard to tell. I think we're waiting for some data from the, the Q when it comes out, but it looks like perhaps the net investment spread may have narrowed a little bit.
Benjamin Budish: Hi, good morning, and thank you for taking the question. I wonder if you could talk a little bit about the recent trends at Global Atlantic. It looks like you are a little bit above the, you know, kind of $250 per quarter target you've talked about, but you know, sifting through the pieces, it's, it's a little bit hard to tell. I think we're waiting for some data from the, the Q when it comes out, but it looks like perhaps the net investment spread may have narrowed a little bit.
Speaker #1: Good morning, and thank you for taking the about the recent trends that global Atlantic looks like you are a little bit above the kind of 250 per quarter target you've talked about, but think we're waiting for some data from the question.
Speaker #1: sifting through the pieces, it's a little bit hard to tell. I Q when it comes out, but it looks like I wonder if you could talk a little bit little bit.
Speaker #1: perhaps the net investment spread may have narrowed a The G&A came in quite a bit lower than the last couple of quarters, so a good earnings outcome.
Benjamin Budish: The G&A came in, you know, quite a bit lower than the last couple of quarters, so a good earnings outcome, but just curious if you could parse through the moving pieces and, you know, maybe talk a little bit about what's embedded in your expectations for 2026. Is it still sort of ±$250, or should we see more upside? Thank you.
Benjamin Budish: The G&A came in, you know, quite a bit lower than the last couple of quarters, so a good earnings outcome, but just curious if you could parse through the moving pieces and, you know, maybe talk a little bit about what's embedded in your expectations for 2026. Is it still sort of ±$250, or should we see more upside? Thank you.
Benjamin Budish: The G&A came in, you know, quite a bit lower than the last couple of quarters, so a good earnings outcome, but just curious if you could parse through the moving pieces and, you know, maybe talk a little bit about what's embedded in your expectations for 2026. Is it still sort of ±$250, or should we see more upside? Thank you.
Speaker #1: curious if you could parse through the moving pieces and maybe talk a little bit about what's embedded in But just your expectations for '26.
Speaker #1: Is it still sort of plus or minus upside? Thank you. Two hundred fifty, or should we see more?
Speaker #5: Yeah. I'll take that one to drop then. All good questions. So let me work through them in pieces. We continue to think that the right level to model the business is in that 250-plus range but keep in mind, and we talked a lot about this last quarter, is in our transition to move our book to more of an industry average on alternatives exposure, we are taking on assets that have no yield or limited yield.
Robert Lewin: Yeah, I'll take that one, it's Rob then. All good questions, so let me work through them in pieces. We continue to think that the right level to model the business is in that $250+ range per quarter over the next four quarters. But keep in mind, and we talked a lot about this last quarter, in our transition to move our book to more of an industry average on alternatives exposure, we are taking on assets that have no yield or limited yield, and we are choosing to not have that show up in our P&L by cash accounting for those outcomes. That is different than many of our industry peers. In just Q4 alone, you know, that number was in the mid-$90s of accrued income that's not showing up in our P&L.
Robert Lewin: Yeah, I'll take that one, it's Rob then. All good questions, so let me work through them in pieces. We continue to think that the right level to model the business is in that $250+ range per quarter over the next four quarters. But keep in mind, and we talked a lot about this last quarter, in our transition to move our book to more of an industry average on alternatives exposure, we are taking on assets that have no yield or limited yield, and we are choosing to not have that show up in our P&L by cash accounting for those outcomes. That is different than many of our industry peers. In just Q4 alone, you know, that number was in the mid-$90s of accrued income that's not showing up in our P&L.
Robert Lewin: Yeah, I'll take that one, it's Rob then. All good questions, so let me work through them in pieces. We continue to think that the right level to model the business is in that $250+ range per quarter over the next four quarters. But keep in mind, and we talked a lot about this last quarter, in our transition to move our book to more of an industry average on alternatives exposure, we are taking on assets that have no yield or limited yield, and we are choosing to not have that show up in our P&L by cash accounting for those outcomes. That is different than many of our industry peers. In just Q4 alone, you know, that number was in the mid-$90s of accrued income that's not showing up in our P&L.
Speaker #5: And we are choosing to not have that show up in our P&L by cash accounting for those outcomes. That is different than many of our industry peers.
Speaker #5: It was in the mid-90s of accrued income that's not showing up in our P&L. And as I think about our run rate today, accrued income is closer to $250 million.
Robert Lewin: As I think about our run rate today, of accrued income is closer to $250 million. As you think about 2026, as we're modeling, you know, that business, we think that accrued income number can be $300 to $350 million. Now, over time, if we do our jobs right, you know, that accrued income that builds and compounds will show up in cash earnings, and we expect in 2027 and 2028, you're gonna start to see that. The other thing, of course, I would point you to, is that whenever we're talking about insurance operating earnings, we should also, you know, think about the broader economic picture of our insurance business.
Robert Lewin: As I think about our run rate today, of accrued income is closer to $250 million. As you think about 2026, as we're modeling, you know, that business, we think that accrued income number can be $300 to $350 million. Now, over time, if we do our jobs right, you know, that accrued income that builds and compounds will show up in cash earnings, and we expect in 2027 and 2028, you're gonna start to see that. The other thing, of course, I would point you to, is that whenever we're talking about insurance operating earnings, we should also, you know, think about the broader economic picture of our insurance business.
Robert Lewin: As I think about our run rate today, of accrued income is closer to $250 million. As you think about 2026, as we're modeling, you know, that business, we think that accrued income number can be $300 to $350 million. Now, over time, if we do our jobs right, you know, that accrued income that builds and compounds will show up in cash earnings, and we expect in 2027 and 2028, you're gonna start to see that. The other thing, of course, I would point you to, is that whenever we're talking about insurance operating earnings, we should also, you know, think about the broader economic picture of our insurance business.
Speaker #5: And as you think about 2026, as we're modeling that business, we think that accrued income number can be $300 to $350 million. Now, over time, if we do our jobs right, that accrued income that builds and compounds—we'll expect in 2027—and show up in cash earnings, and in 2028, you're going to start to see that.
Speaker #5: The other thing, of course, I would point you to is that whenever we're talking about insurance operating earnings, we should also think about the broader economic picture of our insurance business.
Robert Lewin: We've included, again, on page 20 of our earnings release, how we think about total economics and insurance, where you see we continue to have strong growth. That's even without the mark-to-market income coming through the P&L. And across all these line items, as we look over the next few years, feel really great about our ability to continue to drive a differentiated insurance business that's got multiple different ways to be able to win in the market, inclusive of our ability to drive real outcomes with third-party capital, and we're just gonna go in there.
Robert Lewin: We've included, again, on page 20 of our earnings release, how we think about total economics and insurance, where you see we continue to have strong growth. That's even without the mark-to-market income coming through the P&L. And across all these line items, as we look over the next few years, feel really great about our ability to continue to drive a differentiated insurance business that's got multiple different ways to be able to win in the market, inclusive of our ability to drive real outcomes with third-party capital, and we're just gonna go in there.
Robert Lewin: We've included, again, on page 20 of our earnings release, how we think about total economics and insurance, where you see we continue to have strong growth. That's even without the mark-to-market income coming through the P&L. And across all these line items, as we look over the next few years, feel really great about our ability to continue to drive a differentiated insurance business that's got multiple different ways to be able to win in the market, inclusive of our ability to drive real outcomes with third-party capital, and we're just gonna go in there.
Speaker #5: release how we think about total We've included economics and insurance, where you see we continue to have strong growth. That's even without the mark-to-market income coming through the P&L.
Speaker #5: And across all these line items, as we look over the next few years, feel really great about our ability to continue to drive a differentiated insurance business that's got multiple different ways to be able to win in the market, inclusive of our ability to drive real outcomes with third-party
Speaker #5: there. Our next question comes
Operator: Our next question comes from the line of Bill Katz with TD Cowen. Please proceed with your question.
Operator: Our next question comes from the line of Bill Katz with TD Cowen. Please proceed with your question.
Operator: Our next question comes from the line of Bill Katz with TD Cowen. Please proceed with your question.
Speaker #3: from a line of Bill Katz with TD capital and we're just getting going
Speaker #3: question. Okay.
[Analyst] (TD Cowen): Okay, thank you very much for taking the question this morning and all of the, disclosures. So a very big picture question that's been coming up in our conversation with investors, I'd be curious your thoughts. I don't think the stock price moves are really just about software today. I think it's more about the prospects for the industry on a go-forward basis, given the uncertainty that AI seems to be putting into the broad economy. So my question is twofold. One is, how do you sort of see the evolution of the flows in the wealth management, which have been driven heavily by private credit over the last couple of years? And secondly, as you think about deployment across your private equity and your credit portfolios, are historical returns still the right assumptions to be presuming? Thank you.
[Analyst] (TD Cowen): Okay, thank you very much for taking the question this morning and all of the, disclosures. So a very big picture question that's been coming up in our conversation with investors, I'd be curious your thoughts. I don't think the stock price moves are really just about software today. I think it's more about the prospects for the industry on a go-forward basis, given the uncertainty that AI seems to be putting into the broad economy. So my question is twofold. One is, how do you sort of see the evolution of the flows in the wealth management, which have been driven heavily by private credit over the last couple of years? And secondly, as you think about deployment across your private equity and your credit portfolios, are historical returns still the right assumptions to be presuming? Thank you.
Bill Katz: Okay, thank you very much for taking the question this morning and all of the, disclosures. So a very big picture question that's been coming up in our conversation with investors, I'd be curious your thoughts. I don't think the stock price moves are really just about software today. I think it's more about the prospects for the industry on a go-forward basis, given the uncertainty that AI seems to be putting into the broad economy. So my question is twofold. One is, how do you sort of see the evolution of the flows in the wealth management, which have been driven heavily by private credit over the last couple of years? And secondly, as you think about deployment across your private equity and your credit portfolios, are historical returns still the right assumptions to be presuming? Thank you.
Speaker #1: Thank you very much for taking the question this morning and all the disclosures. So a very big picture question investors, and I'd be curious your thoughts.
Speaker #1: I don't think that's been coming up in our conversation. I think the stock price moves are really just about software today. I think it's more about the prospects for the industry on a go-forward basis, given the uncertainty that AI seems to be putting into the broad economy.
Speaker #1: So my question is twofold. One is, how do you sort of see the evolution of the flows in the wealth management, which have been driven heavily by private credit over the last couple of years?
Speaker #1: And secondly, as you think about deployment across your private equity and your credit portfolios, are historical returns still the right assumptions to be presuming?
Speaker #1: Thank
Speaker #1: you. Greg, why don't
Scott Nuttall: Craig, why don't you start with wealth and give him some specifics, and then I'll-
Scott Nuttall: Craig, why don't you start with wealth and give him some specifics, and then I'll-
Scott Nuttall: Craig, why don't you start with wealth and give him some specifics, and then I'll-
Speaker #6: you start with wealth and give me some specifics, and then I'll.
Robert Lewin: Yeah, sure. And Bill, this is not, this is not directly related to your question, but one of the questions we've been getting a lot, actually, just on the wealth front, thought it'd be helpful for people, just relates to what we're seeing as we begin the year in 2026, because it's interesting for us.
Robert Lewin: Yeah, sure. And Bill, this is not, this is not directly related to your question, but one of the questions we've been getting a lot, actually, just on the wealth front, thought it'd be helpful for people, just relates to what we're seeing as we begin the year in 2026, because it's interesting for us.
Robert Lewin: Yeah, sure. And Bill, this is not, this is not directly related to your question, but one of the questions we've been getting a lot, actually, just on the wealth front, thought it'd be helpful for people, just relates to what we're seeing as we begin the year in 2026, because it's interesting for us.
Speaker #1: Yeah, sure. And Bill, this is not directly related to your question, but one of the questions we've been getting a lot, actually, just on the wealth fund side—which would be helpful for people—just relates to what we're seeing as we begin the year in 2026, because it's interesting for us.
Robert Lewin: ... And look, just I know you understand this, but as a reminder, look, our North Star here is investment performance. And I think we have a view that if we are able to continue to deliver attractive net returns on behalf of our clients, that these vehicles are going to have an opportunity to continue to scale at a really attractive rate. And so again, you heard in our prepared remarks how K-Series has scaled, et cetera. Now, back to the January point, like, I think as a point of reference, in Q4, we raised about $4.5 billion, so say a $1.5 billion run rate. And then if you think of Q4, again, that's a quarter that had a lot of noise. That number was up 8% compared to Q3 of 2025.
Robert Lewin: ... And look, just I know you understand this, but as a reminder, look, our North Star here is investment performance. And I think we have a view that if we are able to continue to deliver attractive net returns on behalf of our clients, that these vehicles are going to have an opportunity to continue to scale at a really attractive rate. And so again, you heard in our prepared remarks how K-Series has scaled, et cetera. Now, back to the January point, like, I think as a point of reference, in Q4, we raised about $4.5 billion, so say a $1.5 billion run rate. And then if you think of Q4, again, that's a quarter that had a lot of noise. That number was up 8% compared to Q3 of 2025.
Speaker #1: And look, just I know you understand this, but as a reminder, look, our North Star here is investment performance. And I think we have a view that if we're able to continue to deliver attractive net returns on behalf of our clients, that these vehicles are going to have an opportunity to continue to scale at a really attractive rate.
Robert Lewin: And look, just I know you understand this, but as a reminder, look, our North Star here is investment performance. And I think we have a view that if we are able to continue to deliver attractive net returns on behalf of our clients, that these vehicles are going to have an opportunity to continue to scale at a really attractive rate. And so again, you heard in our prepared remarks how K-Series has scaled, et cetera. Now, back to the January point, like, I think as a point of reference, in Q4, we raised about $4.5 billion, so say a $1.5 billion run rate. And then if you think of Q4, again, that's a quarter that had a lot of noise. That number was up 8% compared to Q3 of 2025.
Speaker #1: Heard in our prepared remarks how K Series has—And so, again, you scaled, etc. Now, back to the January point. I think, as a point of reference, billion.
Speaker #1: So, say, a billion and a half run Q4. Again, that's a quarter that had a lot of—in Q4, we raised about 4.5, 8% compared to Q3—of noise.
Speaker #1: '25. So again, a market and That number was up ket and environment with a lot of noise, January, it looks, as we stand here, up Q3.
Robert Lewin: So again, a market environment with a lot of noise in Q3. And then in terms of January, it looks as we stand here, like that number is going to be about $1.3 billion. So again, given all of the volatility, that feels to us like a pretty good outcome on the wealth front, and that number is up around 20% from January of last year. So I think in all the volatility, both in the second half and what we've seen in January, it hasn't changed our point of view of what the long-term opportunity is for us in the framework of wealth and what those opportunities are. I think you should continue to see us really focus on these big, large asset classes. And again, brand's incredibly important.
Robert Lewin: So again, a market environment with a lot of noise in Q3. And then in terms of January, it looks as we stand here, like that number is going to be about $1.3 billion. So again, given all of the volatility, that feels to us like a pretty good outcome on the wealth front, and that number is up around 20% from January of last year. So I think in all the volatility, both in the second half and what we've seen in January, it hasn't changed our point of view of what the long-term opportunity is for us in the framework of wealth and what those opportunities are. I think you should continue to see us really focus on these big, large asset classes. And again, brand's incredibly important.
Robert Lewin: So again, a market environment with a lot of noise in Q3. And then in terms of January, it looks as we stand here, like that number is going to be about $1.3 billion. So again, given all of the volatility, that feels to us like a pretty good outcome on the wealth front, and that number is up around 20% from January of last year. So I think in all the volatility, both in the second half and what we've seen in January, it hasn't changed our point of view of what the long-term opportunity is for us in the framework of wealth and what those opportunities are. I think you should continue to see us really focus on these big, large asset classes. And again, brand's incredibly important.
Speaker #1: Like, that number is going to be about a billion. And then in terms of three—so again, given all of the volatility, that feels to us like a pretty good outcome, up around 20% from January of last year.
Speaker #1: So I on the wealth front, and that number is think in all the volatility, both in the second half and what we see in January, it hasn't changed our point of view of what the long-term opportunity is for us in the framework of wealth and what those opportunities are.
Speaker #1: I think you should continue to see us really focus on these big, large asset classes, and again, brand is incredibly important, resources are incredibly important.
Robert Lewin: Resources are incredibly important, but I think the long-term opportunity, no change in our view.
Robert Lewin: Resources are incredibly important, but I think the long-term opportunity, no change in our view.
Robert Lewin: Resources are incredibly important, but I think the long-term opportunity, no change in our view.
Speaker #1: But I think the long-term opportunity no change in our view.
Scott Nuttall: Yeah, and just to pick up, and thanks for the question, Bill. Scott, look, no change in our expectations from a deployment standpoint. As I said, we expect deployment to be up again this year. No change in our return expectations across asset classes. The only thing I would add, just, you know, as just a broader observation, and, you know, you and others on the call have lived this with us for a long time. You know, we've been public 16, 17 years. Every time the market gets anxious about virtually anything, our space and our stock trade off. So we went back and looked. So we've been public 16, 17 years. This is the 10th time we've seen our stock down more than 20 percent in a month. So this happens.
Scott Nuttall: Yeah, and just to pick up, and thanks for the question, Bill. Scott, look, no change in our expectations from a deployment standpoint. As I said, we expect deployment to be up again this year. No change in our return expectations across asset classes. The only thing I would add, just, you know, as just a broader observation, and, you know, you and others on the call have lived this with us for a long time. You know, we've been public 16, 17 years. Every time the market gets anxious about virtually anything, our space and our stock trade off. So we went back and looked. So we've been public 16, 17 years. This is the 10th time we've seen our stock down more than 20 percent in a month. So this happens.
Scott Nuttall: Yeah, and just to pick up, and thanks for the question, Bill. Scott, look, no change in our expectations from a deployment standpoint. As I said, we expect deployment to be up again this year. No change in our return expectations across asset classes. The only thing I would add, just, you know, as just a broader observation, and, you know, you and others on the call have lived this with us for a long time. You know, we've been public 16, 17 years. Every time the market gets anxious about virtually anything, our space and our stock trade off. So we went back and looked. So we've been public 16, 17 years. This is the 10th time we've seen our stock down more than 20 percent in a month. So this happens.
Speaker #7: Bill, yeah. And just to pick up—and thanks for that, Scott—look, no change in our expectations from a deployment standpoint. As I said, we expect deployment to be up again this year.
Speaker #7: No, across asset classes. The only thing I would add, just as a broader observation—and you’ve been with us for a long time—we’ve been years.
Speaker #7: public 16, 17 Every time the market gets anxious, about virtually anything, our space and our stock trade off. So we went back and looked.
Speaker #7: So we've been public 16, 17 years. This is the and others on the call have lived this stock down more than 20% in a month.
Speaker #7: So this happens. And you can look back. It's European debt crisis. It's COVID. You name it. Happy to share. But looking 10th time we've seen our back and where we have two years of data, post that event to look at, just a couple of observations for you, one, it tends to be a great entry point for our stock.
Scott Nuttall: And you can look back; it's the European debt crisis, it's COVID, you name it. Happy to, happy to share. But, you know, looking back and where we have two years of data post that event to look at, just a couple observations for you. One, it tends to be a great entry point for our stock. There's an overreaction to the down, right? So the one- to two-year average returns, if you invest in that period of time, have been really strong. And a lot of our larger shareholders have bought our stock and done incredibly well when this kind of thing happens. So the market overreacts habitually to anxiety as it relates to our sector. It's just been happening as long as we've been public, and it's been a great buying opportunity.
Scott Nuttall: And you can look back; it's the European debt crisis, it's COVID, you name it. Happy to, happy to share. But, you know, looking back and where we have two years of data post that event to look at, just a couple observations for you. One, it tends to be a great entry point for our stock. There's an overreaction to the down, right? So the one- to two-year average returns, if you invest in that period of time, have been really strong. And a lot of our larger shareholders have bought our stock and done incredibly well when this kind of thing happens. So the market overreacts habitually to anxiety as it relates to our sector. It's just been happening as long as we've been public, and it's been a great buying opportunity.
Scott Nuttall: And you can look back; it's the European debt crisis, it's COVID, you name it. Happy to, happy to share. But, you know, looking back and where we have two years of data post that event to look at, just a couple observations for you. One, it tends to be a great entry point for our stock. There's an overreaction to the down, right? So the one- to two-year average returns, if you invest in that period of time, have been really strong. And a lot of our larger shareholders have bought our stock and done incredibly well when this kind of thing happens. So the market overreacts habitually to anxiety as it relates to our sector. It's just been happening as long as we've been public, and it's been a great buying opportunity.
Speaker #7: There's an overreaction to the down. Right? So the one to two-year average returns, if you invest in that period of time, have been really strong.
Speaker #7: And a lot of our larger shareholders have bought our stock and done incredibly well. When this kind of thing happens, so does the market anxiety.
Speaker #7: As it relates to our sector, it overreacts habitually to what's just been happening, as long as we've been public. And it's been a great buying opportunity.
Scott Nuttall: Second observation, and I shared a little bit of this before, if we look back at those vintage years for us as a firm where we deployed capital into those environments, really strong returns. So if anything, if this kind of, volatility persists, I would say the return opportunity on the forward is actually greater than our average. We haven't changed how we're pricing deals. In our experience, the returns from vintage years, if this keeps going, this is gonna be a really strong one. Hope that helps.
Scott Nuttall: Second observation, and I shared a little bit of this before, if we look back at those vintage years for us as a firm where we deployed capital into those environments, really strong returns. So if anything, if this kind of, volatility persists, I would say the return opportunity on the forward is actually greater than our average. We haven't changed how we're pricing deals. In our experience, the returns from vintage years, if this keeps going, this is gonna be a really strong one. Hope that helps.
Speaker #7: Second observation—and I shared a little bit of this before—if we look back at those vintage years for us as a firm, where we've deployed capital into those environments, really strong returns.
Scott Nuttall: Second observation, and I shared a little bit of this before, if we look back at those vintage years for us as a firm where we deployed capital into those environments, really strong returns. So if anything, if this kind of, volatility persists, I would say the return opportunity on the forward is actually greater than our average. We haven't changed how we're pricing deals. In our experience, the returns from vintage years, if this keeps going, this is gonna be a really strong one. Hope that helps.
Speaker #7: So, if anything, if this kind of volatility persists, I would say the return opportunity on the forward is actually greater than our average. We haven't changed how we're pricing deals, but in our experience, the returns from vintage years—if this keeps going—this is going to be a really strong one.
Speaker #7: Hope that
Speaker #3: Our next question comes from the line of Brendan Hawkin with BMO. Please proceed with your question.
Operator: Our next question comes from the line of Brennan Hawken with BMO. Please proceed with your question.
Operator: Our next question comes from the line of Brennan Hawken with BMO. Please proceed with your question.
Operator: Our next question comes from the line of Brennan Hawken with BMO. Please proceed with your question.
Speaker #8: Good morning. Thanks for taking my question. Appreciate that you reiterated the 350 million expectation for this year in strategic
[Analyst] (BMO): Good morning. Thanks for taking my question. Appreciate that you reiterated the $350 million expectation for this year in Strategic Holdings, and also recognizing that, that the earnings doubled here this year, more than doubled. But could you help us understand what will drive that? In talking with investors, there's a, there's a little bit of a view that it's black box. There's not a ton of disclosure. So any enhanced color around what's gonna drive that substantial ramp? And then there's a TMT bucket that's in there. Maybe could you provide a little color around what's in that bucket, given some of the anxiety and agita that's out there? Thanks.
[Analyst] (BMO): Good morning. Thanks for taking my question. Appreciate that you reiterated the $350 million expectation for this year in Strategic Holdings, and also recognizing that, that the earnings doubled here this year, more than doubled. But could you help us understand what will drive that? In talking with investors, there's a, there's a little bit of a view that it's black box. There's not a ton of disclosure. So any enhanced color around what's gonna drive that substantial ramp? And then there's a TMT bucket that's in there. Maybe could you provide a little color around what's in that bucket, given some of the anxiety and agita that's out there? Thanks.
Brennan Hawken: Good morning. Thanks for taking my question. Appreciate that you reiterated the $350 million expectation for this year in Strategic Holdings, and also recognizing that, that the earnings doubled here this year, more than doubled. But could you help us understand what will drive that? In talking with investors, there's a, there's a little bit of a view that it's black box. There's not a ton of disclosure. So any enhanced color around what's gonna drive that substantial ramp? And then there's a TMT bucket that's in there. Maybe could you provide a little color around what's in that bucket, given some of the anxiety and agita that's out there? Thanks.
Speaker #8: holdings. And also recognizing that the earnings doubled here this year more than doubled. But could you help us understand what will drive there's a little bit of a view that that?
Speaker #8: In talking with investors, it's a black box. There's not a ton of help, any enhanced color around what's going to drive disclosure. So then there's a TMT bucket that's in there.
Speaker #8: Maybe could you provide a little color around what's in that bucket, given some of the anxiety and agita that's out there? Thanks.
Speaker #9: Yeah, great. Thanks a lot for the question, Brendan. So, strategic holdings today is still a relatively small part of our business, of course. We're focused on exceeding $350 million of operating earnings in 2026, but much talked about generating north of $1.1 billion of operating earnings by 2030.
Robert Lewin: Yeah, great. Thanks a lot for the question, Brennan. So, you know, Strategic Holdings today is still a relatively small part of our business. Of course, we're focused on exceeding $350 million of operating earnings in 2026. But much more importantly, we've talked about generating north of $1.1 billion of operating earnings by 2030, and that continues to be where, you know, our team's focus is. And, we feel more confident today than we did a year ago in our ability to be able to exceed that number. So feel really good with the results. In terms of disclosure, I think as it becomes a larger part and percentage of our business, you're likely to see greater disclosure over time, a more specific disclosure.
Robert Lewin: Yeah, great. Thanks a lot for the question, Brennan. So, you know, Strategic Holdings today is still a relatively small part of our business. Of course, we're focused on exceeding $350 million of operating earnings in 2026. But much more importantly, we've talked about generating north of $1.1 billion of operating earnings by 2030, and that continues to be where, you know, our team's focus is. And, we feel more confident today than we did a year ago in our ability to be able to exceed that number. So feel really good with the results. In terms of disclosure, I think as it becomes a larger part and percentage of our business, you're likely to see greater disclosure over time, a more specific disclosure.
Robert Lewin: Yeah, great. Thanks a lot for the question, Brennan. So, you know, Strategic Holdings today is still a relatively small part of our business. Of course, we're focused on exceeding $350 million of operating earnings in 2026. But much more importantly, we've talked about generating north of $1.1 billion of operating earnings by 2030, and that continues to be where, you know, our team's focus is. And, we feel more confident today than we did a year ago in our ability to be able to exceed that number. So feel really good with the results. In terms of disclosure, I think as it becomes a larger part and percentage of our business, you're likely to see greater disclosure over time, a more specific disclosure.
Speaker #9: And that continues to be where our team's focus is. And we feel more confident today than we did a year ago in our ability to be able to exceed that number.
Speaker #9: So, I feel really good with the results. In terms of disclosure, I think as it becomes a larger part and percentage of our business, you're likely to see greater disclosure over time, and more specific disclosure.
Robert Lewin: So, that'll be on the common. We talk about that, you know, quite a bit, and how do we make sure we're balancing that based on the size of the business today and, and where it's going. But the punchline is, we feel really good. Now, what is driving it? What's driving it is we've got, you know, approximately 20 businesses now that sit in Strategic Holdings, all generating different levels of growth and free cash flow. Many of those investments were originated, you know, 5, 6, 7, 8 years ago, with bigger capital structures at the time. And a big part of our thesis is, as they delever, which they are deleveraging, they're gonna be generating more free cash flow for dividends.
Robert Lewin: So, that'll be on the common. We talk about that, you know, quite a bit, and how do we make sure we're balancing that based on the size of the business today and, and where it's going. But the punchline is, we feel really good. Now, what is driving it? What's driving it is we've got, you know, approximately 20 businesses now that sit in Strategic Holdings, all generating different levels of growth and free cash flow. Many of those investments were originated, you know, 5, 6, 7, 8 years ago, with bigger capital structures at the time. And a big part of our thesis is, as they delever, which they are deleveraging, they're gonna be generating more free cash flow for dividends.
Speaker #9: So that'll be on the comment we talk about that. Quite a bit in how do we make sure we're balancing that based on the size of the business today and where it's going.
Robert Lewin: So, that'll be on the common. We talk about that, you know, quite a bit, and how do we make sure we're balancing that based on the size of the business today and, and where it's going. But the punchline is, we feel really good. Now, what is driving it? What's driving it is we've got, you know, approximately 20 businesses now that sit in Strategic Holdings, all generating different levels of growth and free cash flow. Many of those investments were originated, you know, 5, 6, 7, 8 years ago, with bigger capital structures at the time. And a big part of our thesis is, as they delever, which they are deleveraging, they're gonna be generating more free cash flow for dividends.
Speaker #9: But the punchline is we feel really good. Now, what is driving it? What's driving it is we've got approximately 20 businesses now that sit in strategic holdings.
Speaker #9: generating different levels of growth and free cash All flow. Many of those investments were originated five, six, seven, eight years ago with bigger capital structures at the time.
Speaker #9: de-lever, which they are de-leveraging, they're going to be generating more free cash dividends and that is what's driving our confidence both in And a 2026, but especially as we look forward through 2030 and beyond.
Robert Lewin: That is what's driving our confidence, both in 2026, but especially as we look forward through 2030 and beyond.
Robert Lewin: That is what's driving our confidence, both in 2026, but especially as we look forward through 2030 and beyond.
Robert Lewin: That is what's driving our confidence, both in 2026, but especially as we look forward through 2030 and beyond.
Speaker #3: Our next question comes from a line of Michael Cypress with Morgan Stanley. Please question.
Operator: Our next question comes from the line of Michael Cyprys with Morgan Stanley. Please proceed with your question.
Operator: Our next question comes from the line of Michael Cyprys with Morgan Stanley. Please proceed with your question.
Operator: Our next question comes from the line of Michael Cyprys with Morgan Stanley. Please proceed with your question.
Speaker #3: proceed with your
Michael Cyprys: Great. Thanks so much for taking the question. Just coming back to some of these AI concerns in the marketplace, one of the things I think maybe doesn't get as much attention is the opportunities that you at KKR can harness from AI. So to that end, can you just update us on how you're deploying AI across the firm today, as well as within your portfolio companies? And if you could talk about how that's evolving, what sort of opportunities and benefits have you harnessed from that, and how you've also optimized your portfolio construction around investing around the AI infrastructure layer and the benefits there?
Michael Cyprys: Great. Thanks so much for taking the question. Just coming back to some of these AI concerns in the marketplace, one of the things I think maybe doesn't get as much attention is the opportunities that you at KKR can harness from AI. So to that end, can you just update us on how you're deploying AI across the firm today, as well as within your portfolio companies? And if you could talk about how that's evolving, what sort of opportunities and benefits have you harnessed from that, and how you've also optimized your portfolio construction around investing around the AI infrastructure layer and the benefits there?
Michael Cyprys: Great. Thanks so much for taking the question. Just coming back to some of these AI concerns in the marketplace, one of the things I think maybe doesn't get as much attention is the opportunities that you at KKR can harness from AI. So to that end, can you just update us on how you're deploying AI across the firm today, as well as within your portfolio companies? And if you could talk about how that's evolving, what sort of opportunities and benefits have you harnessed from that, and how you've also optimized your portfolio construction around investing around the AI infrastructure layer and the benefits there?
Speaker #10: question. Just coming back to some of these Great. Thanks so much for taking the AI concerns and the marketplace, one of the things I think maybe doesn't get as much attention is the opportunities that you at KKR can harness from AI.
Speaker #10: So to that end, could you just update us on how you're deploying AI across the firm today as well as within your portfolio companies?
Speaker #10: And if you could talk about how that's evolving, what sort of opportunities and benefits have you harnessed from that, and how you've also optimized your portfolio construction around investing around the AI infrastructure layer and the benefits
Speaker #10: there.
Speaker #2: Hey, Mike. It's Craig. Why don't I
Craig Larson: Hey, Mike, it's Craig. Why don't I start? Scott may have a couple of thoughts. I think it's when you, when you look at what we've done as a firm, I think it's important to remember we have over 400 engineers in the firm within our tech area. So I think these, these topics, back, back to Scott's opening, these topics aren't new. They've been front of mind for us, et cetera. I think as a firm, we've had two cross-functional teams, if you will. One team is focused on our portfolio companies. Again, we're a control investor in over 200 companies globally, and so that, that team is focused on sharing best practices, what works, what doesn't work, what's easy, what's hard.
Craig Larson: Hey, Mike, it's Craig. Why don't I start? Scott may have a couple of thoughts. I think it's when you, when you look at what we've done as a firm, I think it's important to remember we have over 400 engineers in the firm within our tech area. So I think these, these topics, back, back to Scott's opening, these topics aren't new. They've been front of mind for us, et cetera. I think as a firm, we've had two cross-functional teams, if you will. One team is focused on our portfolio companies. Again, we're a control investor in over 200 companies globally, and so that, that team is focused on sharing best practices, what works, what doesn't work, what's easy, what's hard.
Craig Larson: Hey, Mike, it's Craig. Why don't I start? Scott may have a couple of thoughts. I think it's when you, when you look at what we've done as a firm, I think it's important to remember we have over 400 engineers in the firm within our tech area. So I think these, these topics, back, back to Scott's opening, these topics aren't new. They've been front of mind for us, et cetera. I think as a firm, we've had two cross-functional teams, if you will. One team is focused on our portfolio companies. Again, we're a control investor in over 200 companies globally, and so that, that team is focused on sharing best practices, what works, what doesn't work, what's easy, what's hard.
Speaker #2: Start? Scott, may I have a couple of thoughts? I think when you look at what we've done as a firm, I think it's important to remember we have over 400 engineers in the area.
Speaker #2: So I think these topics—back to Scott's opening—these topics aren't new. They've been front of mind for us, etc. I think, as a firm, we've had two cross-functional teams, if you will.
Speaker #2: So I think these topics back to Scott's opening, these topics aren't new. They've been front of mind for us, etc. I think as a firm, we've had two in the firm within our tech One team is focused on our portfolio companies, again, where our control investor and over 200 companies globally.
Speaker #2: And so that team is focused on sharing best practices, what's hard. And I think our culture is one that really helps us in what works, what doesn't work, what's easy, this as we're a very collaborative culture.
Craig Larson: And I think our culture is one that really helps us in this, as we're a very collaborative culture, and so lessons travel. They travel through to our investment teams, they travel through to our investment committees at the same time, because we wanna make sure that we're leveraging all of these lessons, good and bad, on a global basis. And I think the second team is one... The second team is one that's focused on KKR. So what are the things that we as a firm can be doing a lot more efficiently at the same time? And then just as it relates to opportunity, again, Scott mentioned the dry powder that we have at the firm and the opportunities that we have to continue to invest behind growth and where AI can be an important driver of growth.
Craig Larson: And I think our culture is one that really helps us in this, as we're a very collaborative culture, and so lessons travel. They travel through to our investment teams, they travel through to our investment committees at the same time, because we wanna make sure that we're leveraging all of these lessons, good and bad, on a global basis. And I think the second team is one... The second team is one that's focused on KKR. So what are the things that we as a firm can be doing a lot more efficiently at the same time? And then just as it relates to opportunity, again, Scott mentioned the dry powder that we have at the firm and the opportunities that we have to continue to invest behind growth and where AI can be an important driver of growth.
Craig Larson: And I think our culture is one that really helps us in this, as we're a very collaborative culture, and so lessons travel. They travel through to our investment teams, they travel through to our investment committees at the same time, because we wanna make sure that we're leveraging all of these lessons, good and bad, on a global basis. And I think the second team is one... The second team is one that's focused on KKR. So what are the things that we as a firm can be doing a lot more efficiently at the same time? And then just as it relates to opportunity, again, Scott mentioned the dry powder that we have at the firm and the opportunities that we have to continue to invest behind growth and where AI can be an important driver of growth.
Speaker #2: And so lessons travel. They travel through to our investment teams. They travel through to our investment committees at the same time. Because we want to make sure that we're leveraging all of these lessons, good and bad, on a global basis.
Speaker #2: And I think the second team is one—the second team is one that's focused on KKR. So what are the things that we, as a firm, can be doing a lot more efficiently at the same time?
Speaker #2: And then just as it relates to opportunity, again, Scott mentioned the dry powder that we have at the firm and the opportunities that we have to continue to invest important driver of behind growth.
Speaker #2: growth, Scott mentioned OneStream. That's an example of a firm that was the successfully able to use AI in a And where AI can be an way that helped accelerate that growth that ultimately resulted in a great outcome for our
Craig Larson: You know, Scott mentioned OneStream. Like, that's an example of a firm that was successfully able to use AI in a way that helped accelerate that growth and ultimately resulted in a great outcome for our investors.
Craig Larson: You know, Scott mentioned OneStream. Like, that's an example of a firm that was successfully able to use AI in a way that helped accelerate that growth and ultimately resulted in a great outcome for our investors.
Craig Larson: You know, Scott mentioned OneStream. Like, that's an example of a firm that was successfully able to use AI in a way that helped accelerate that growth and ultimately resulted in a great outcome for our investors.
Speaker #2: investors. Hey, Michael.
Scott Nuttall: Hey, Michael, Scott. I just a couple of quick things to add is, you know, we got two-- over 200 meaningful equity investments in companies, so we're working across all of those. And you can think of it as, like, 200 different labs, where we can think about how AI can help improve efficiencies, drive growth, and it's giving us a big opportunity to learn from across the world and across different industries. And we can apply that, I think, inherent in your question, to the firm. And so that is happening day in, day out. We've got teams, as Craig mentioned, focused and dedicated to that, and so we're pleased with the early results. And we're seeing an uplift in the EBITDA of the underlying companies. I think sometimes that gets lost a little bit.
Scott Nuttall: Hey, Michael, Scott. I just a couple of quick things to add is, you know, we got two-- over 200 meaningful equity investments in companies, so we're working across all of those. And you can think of it as, like, 200 different labs, where we can think about how AI can help improve efficiencies, drive growth, and it's giving us a big opportunity to learn from across the world and across different industries. And we can apply that, I think, inherent in your question, to the firm. And so that is happening day in, day out. We've got teams, as Craig mentioned, focused and dedicated to that, and so we're pleased with the early results. And we're seeing an uplift in the EBITDA of the underlying companies. I think sometimes that gets lost a little bit.
Scott Nuttall: Hey, Michael, Scott. I just a couple of quick things to add is, you know, we got two-- over 200 meaningful equity investments in companies, so we're working across all of those. And you can think of it as, like, 200 different labs, where we can think about how AI can help improve efficiencies, drive growth, and it's giving us a big opportunity to learn from across the world and across different industries. And we can apply that, I think, inherent in your question, to the firm. And so that is happening day in, day out. We've got teams, as Craig mentioned, focused and dedicated to that, and so we're pleased with the early results. And we're seeing an uplift in the EBITDA of the underlying companies. I think sometimes that gets lost a little bit.
Speaker #1: meaningful equity investments in is we got over 200 companies. So we're working across all of those. And you can think of it as like 200 different labs where we can think about how AI can help improve efficiencies, drive growth.
Speaker #1: And it's giving us a big opportunity to learn from across the world and across different industries. And we can apply that, I think, inherent in your question to the firm.
Speaker #1: happening day in, day out. And so that is We've got teams as Craig mentioned focused and dedicated to that. And so we're pleased with the early results.
Speaker #1: And we're seeing an uplift in the EBITDA of the underlying companies. I think sometimes that gets lost a little bit. And so we're actually seeing incremental value creation and revenue in EBITDA growth as a result of some of these findings.
Scott Nuttall: And so we're actually seeing incremental value creation and revenue and EBITDA growth as a result of some of these findings. And we're, as Rob said, we're applying them here, and I think you're gonna see more of that. So part of the reason you hear so much optimism in our voice around continued improving operating leverage at KKR is on the back of this. And then the other thing, and I know it's talked about a lot, but I don't want it to get lost, is your point about the investment opportunity that comes out of all this. I don't know what happened to the market flip. This became a really interesting and exciting thing to now everybody's scared. You know, from our standpoint, nothing's changed.
Scott Nuttall: And so we're actually seeing incremental value creation and revenue and EBITDA growth as a result of some of these findings. And we're, as Rob said, we're applying them here, and I think you're gonna see more of that. So part of the reason you hear so much optimism in our voice around continued improving operating leverage at KKR is on the back of this. And then the other thing, and I know it's talked about a lot, but I don't want it to get lost, is your point about the investment opportunity that comes out of all this. I don't know what happened to the market flip. This became a really interesting and exciting thing to now everybody's scared. You know, from our standpoint, nothing's changed.
Scott Nuttall: And so we're actually seeing incremental value creation and revenue and EBITDA growth as a result of some of these findings. And we're, as Rob said, we're applying them here, and I think you're gonna see more of that. So part of the reason you hear so much optimism in our voice around continued improving operating leverage at KKR is on the back of this. And then the other thing, and I know it's talked about a lot, but I don't want it to get lost, is your point about the investment opportunity that comes out of all this. I don't know what happened to the market flip. This became a really interesting and exciting thing to now everybody's scared. You know, from our standpoint, nothing's changed.
Speaker #1: And, as Rob said, we're applying them here. And I think you're going to see more of that. So, part of the reason you hear so much optimism in our voice around continued improving operating leverage at KKR is on the back of this.
Speaker #1: And then the other thing, and I know it's talked about a lot, but I don't want it to get lost, is your point about the investment opportunity that comes out of all this.
Speaker #1: really interesting and exciting thing to now everybody's scared. nothing's changed. From our standpoint, I don't know what happened. power, adjacencies, cooling of The market flipped.
Scott Nuttall: So, you know, data centers, power, adjacencies, cooling of data centers, we've been investing around this theme for the last many, many years. Those investments are performing very nicely. We announced another large data center transaction in Asia just earlier this week, so this continues to be a big and important theme for us.
Scott Nuttall: So, you know, data centers, power, adjacencies, cooling of data centers, we've been investing around this theme for the last many, many years. Those investments are performing very nicely. We announced another large data center transaction in Asia just earlier this week, so this continues to be a big and important theme for us.
Scott Nuttall: So, you know, data centers, power, adjacencies, cooling of data centers, we've been investing around this theme for the last many, many years. Those investments are performing very nicely. We announced another large data center transaction in Asia just earlier this week, so this continues to be a big and important theme for us.
Speaker #1: data centers, we've been investing around this theme for the last many, many years. Those investments are performing very nicely. We announced another large data center this week, so this continues to be a big and important theme for
Speaker #1: us. Our next
Operator: Our next question comes from the line of Patrick Davitt with Autonomous Research. Please proceed with your question.
Operator: Our next question comes from the line of Patrick Davitt with Autonomous Research. Please proceed with your question.
Operator: Our next question comes from the line of Patrick Davitt with Autonomous Research. Please proceed with your question.
Speaker #3: question comes from a line of Patrick Davit with Autonomous Research. Please proceed with your
Speaker #3: question. Hi, good morning,
Patrick Davitt: Hey, good morning, everyone. I have a question on Arctos. Sounds like the path to $100 billion is probably mostly solutions and secondaries. So sorry if I missed this in the deck, but what is the mix currently between sports and solutions in that $15 billion? And if they already had such a strong secondaries team, why haven't they raised more AUM there? And if it's just distribution, I assume plugging them into KKR could make it quite easy to quite quickly raise, like, more of a mega fund there, like some of the other secondaries managers have. Thank you.
Patrick Davitt: Hey, good morning, everyone. I have a question on Arctos. Sounds like the path to $100 billion is probably mostly solutions and secondaries. So sorry if I missed this in the deck, but what is the mix currently between sports and solutions in that $15 billion? And if they already had such a strong secondaries team, why haven't they raised more AUM there? And if it's just distribution, I assume plugging them into KKR could make it quite easy to quite quickly raise, like, more of a mega fund there, like some of the other secondaries managers have. Thank you.
Patrick Davitt: Hey, good morning, everyone. I have a question on Arctos. Sounds like the path to $100 billion is probably mostly solutions and secondaries. So sorry if I missed this in the deck, but what is the mix currently between sports and solutions in that $15 billion? And if they already had such a strong secondaries team, why haven't they raised more AUM there? And if it's just distribution, I assume plugging them into KKR could make it quite easy to quite quickly raise, like, more of a mega fund there, like some of the other secondaries managers have. Thank you.
Speaker #11: everyone. I have a question on
Speaker #1: sounds . Sounds like the path to 100 billion is probably and solutions mostly secondaries . So sorry if I missed but please sorry if I , so this in the deck .
Speaker #1: is the this in mix missed currently sports and solutions in that 15 billion ? they already had such a strong This became a secondaries team transaction in Asia. , why haven't they raised And if more AUM ?
Speaker #1: assume plugging KKR could make it quite to quite easy them into more of quickly a mega fund there , like some of the other secondaries had .
Scott Nuttall: Yeah, Patrick, it's Rob. Why don't I start and maybe just take a step back and describe the Arctos business. It was founded in 2019 and really started initially in the sports space. That is the majority of their AUM today. They've raised two funds, outraising a third, including a big sidecar fund in addition to that. And so that is the bulk of their AUM today. That AUM, as we mentioned in our information, has no fixed end date, and so in a lot of ways, as close to permanent capital as they come, they are the clear leader there.
Scott Nuttall: Yeah, Patrick, it's Rob. Why don't I start and maybe just take a step back and describe the Arctos business. It was founded in 2019 and really started initially in the sports space. That is the majority of their AUM today. They've raised two funds, outraising a third, including a big sidecar fund in addition to that. And so that is the bulk of their AUM today. That AUM, as we mentioned in our information, has no fixed end date, and so in a lot of ways, as close to permanent capital as they come, they are the clear leader there.
Robert Lewin: Yeah, Patrick, it's Rob. Why don't I start and maybe just take a step back and describe the Arctos business. It was founded in 2019 and really started initially in the sports space. That is the majority of their AUM today. They've raised two funds, outraising a third, including a big sidecar fund in addition to that. And so that is the bulk of their AUM today. That AUM, as we mentioned in our information, has no fixed end date, and so in a lot of ways, as close to permanent capital as they come, they are the clear leader there.
Speaker #1: Thank you .
Speaker #2: Yeah .
Speaker #2: a and describe the Arktos back business ? And it founded in was started initially in 2019 and really sports space that is the majority of their AUM today .
Speaker #2: They've Outraising two funds . big including sidecar fund . In their addition to that is the bulk of And so AUM today , that AUM , as we that .
Speaker #2: mentioned in our has on no date . And fixed end so in a lot of ways as information , close to permanent capital as they come , they are the clear leader there .
Scott Nuttall: As we think about the growth of sports, which is its own asset class in its own right, and that's growing at double-digit rates, where we're the clear global leader, we think there's a lot of room for growth in that asset class alone. A second part of their business that they started more recently is the GP Solutions part of their business. They're raising capital in the first strategy. They're having a very successful first-time fund that will make it already one of the largest players in GP Solutions. That, again, is a big asset class with a lot of growth, a lot of levers on either side of the GP, broader GP Solutions business that we think, again, can be a real growth factor.
Scott Nuttall: As we think about the growth of sports, which is its own asset class in its own right, and that's growing at double-digit rates, where we're the clear global leader, we think there's a lot of room for growth in that asset class alone. A second part of their business that they started more recently is the GP Solutions part of their business. They're raising capital in the first strategy. They're having a very successful first-time fund that will make it already one of the largest players in GP Solutions. That, again, is a big asset class with a lot of growth, a lot of levers on either side of the GP, broader GP Solutions business that we think, again, can be a real growth factor.
Robert Lewin: As we think about the growth of sports, which is its own asset class in its own right, and that's growing at double-digit rates, where we're the clear global leader, we think there's a lot of room for growth in that asset class alone. A second part of their business that they started more recently is the GP Solutions part of their business. They're raising capital in the first strategy. They're having a very successful first-time fund that will make it already one of the largest players in GP Solutions. That, again, is a big asset class with a lot of growth, a lot of levers on either side of the GP, broader GP Solutions business that we think, again, can be a real growth factor.
Speaker #2: think about the growth of sports , which is its own asset class in its own right , and that's double growing at digit rates , where we're the we're the clear global leader .
Speaker #2: We think there's a lot of growth in that asset class room for alone . business that they started more recently is the solutions , A second part of their business part of they're raising capital the .
Speaker #2: first strategy . They're a very And successful they're having first time fund that be that will make it will already players one of the largest GP solutions again , is .
Speaker #2: asset class with a lot of growth , a That , lot of levers on of side of GP , in solutions the broader GP business that we real growth , can be factor .
Scott Nuttall: As you think about the third leg of it in secondaries, this is not a business they're in today. Again, the firm's only been around for 6 years, 7 years.
Scott Nuttall: As you think about the third leg of it in secondaries, this is not a business they're in today. Again, the firm's only been around for 6 years, 7 years.
Robert Lewin: As you think about the third leg of it in secondaries, this is not a business they're in today. Again, the firm's only been around for 6 years, 7 years.
Speaker #2: You think about the third leg of it, and I think secondaries, business—this is not, again, the firm's only been around, they're in for six years.
Robert Lewin: ... You know, however, when we think about the experience of the team and where they've come from, when we think about their credibility in the marketplace and with investors, is really high, and you combine that with our industry expertise, our access to capital, as you noted, we think that gives us a real right to win. And importantly, we really like the idea of building a secondaries platform with a blank sheet of paper. We look at the secondaries history, and again, we've looked at this space for much of the last decade. We've talked about on these calls multiple times, and we're really glad we've waited. We think that the ability to innovate here, potentially disintermediate that space, is really a compelling one.
Robert Lewin: ... You know, however, when we think about the experience of the team and where they've come from, when we think about their credibility in the marketplace and with investors, is really high, and you combine that with our industry expertise, our access to capital, as you noted, we think that gives us a real right to win. And importantly, we really like the idea of building a secondaries platform with a blank sheet of paper. We look at the secondaries history, and again, we've looked at this space for much of the last decade. We've talked about on these calls multiple times, and we're really glad we've waited. We think that the ability to innovate here, potentially disintermediate that space, is really a compelling one.
Robert Lewin: You know, however, when we think about the experience of the team and where they've come from, when we think about their credibility in the marketplace and with investors, is really high, and you combine that with our industry expertise, our access to capital, as you noted, we think that gives us a real right to win. And importantly, we really like the idea of building a secondaries platform with a blank sheet of paper. We look at the secondaries history, and again, we've looked at this space for much of the last decade. We've talked about on these calls multiple times, and we're really glad we've waited. We think that the ability to innovate here, potentially disintermediate that space, is really a compelling one.
Speaker #2: You know Seven years . we about the experience of the team and and where they've come from , when we think about their credibility and the marketplace with and is really And you however , when combine that investors with industry , our access to expertise you capital as noted , we think that gives us a real right to win .
Speaker #2: And really like the we building a platform with a blank sheet of secondaries importantly , paper look at the industry and again , we've looked space at this for much of the last decade .
Speaker #2: We've talked these calls multiple about on , and we're really glad waited we've . We think that the ability to innovate here potentially disintermediate that space is really compelling one .
Speaker #2: We've talked these calls multiple about on , and we're really glad waited we've . We think that the ability to innovate here potentially disintermediate that space is really a And , you know we're , really with the team partnered arctos excited to be to be able to go together after that .
Robert Lewin: And we're, you know, really excited to be partnering with the Arctos team to be able to go after that together. And so it's not just one part of the business. We really think there's scale to all three parts of this business. And under Ian's leadership and alongside his co-founder, Doc O'Connor, and the rest of the team, we're partnered here with a best-in-class platform.
Robert Lewin: And we're, you know, really excited to be partnering with the Arctos team to be able to go after that together. And so it's not just one part of the business. We really think there's scale to all three parts of this business. And under Ian's leadership and alongside his co-founder, Doc O'Connor, and the rest of the team, we're partnered here with a best-in-class platform.
Robert Lewin: And we're, you know, really excited to be partnering with the Arctos team to be able to go after that together. And so it's not just one part of the business. We really think there's scale to all three parts of this business. And under Ian's leadership and alongside his co-founder, Doc O'Connor, and the rest of the team, we're partnered here with a best-in-class platform.
Speaker #2: so And just one part of the We really think there's scale to all three parts of this business . And under leadership Ian's business .
Speaker #2: Co-founder Doc O'Connor and the rest of the team—we're partnered here with a class-best in platform.
Operator: Our next question comes from the line of Brian Bedell with Deutsche Bank. Please proceed with your question.
Operator: Our next question comes from the line of Brian Bedell with Deutsche Bank. Please proceed with your question.
Operator: Our next question comes from the line of Brian Bedell with Deutsche Bank. Please proceed with your question.
Speaker #3: Our next question comes from the
Speaker #3: Bedell with Deutsche Bank . Please proceed with your question .
Brian Bedell: Great. Thanks for squeezing me in here. Most of my questions have been asked and answered, but maybe just to follow up on a couple. The operating earnings goal of $7+, so the combination of FRE, strategic holdings, and insurance. Just wanted to get your confidence on that. If I, you know, back into that, given the sort of the guide for insurance and strategic holdings, it would imply FRE, you know, maybe a little less than $5.50 a share, which of course meaningfully exceeds the $4.50. So just want to get your confidence on that $7 between those components, and then a couple cleanups just on catch-up fees in the Q4 and timing for the Arctos close.
Brian Bedell: Great. Thanks for squeezing me in here. Most of my questions have been asked and answered, but maybe just to follow up on a couple. The operating earnings goal of $7+, so the combination of FRE, strategic holdings, and insurance. Just wanted to get your confidence on that. If I, you know, back into that, given the sort of the guide for insurance and strategic holdings, it would imply FRE, you know, maybe a little less than $5.50 a share, which of course meaningfully exceeds the $4.50. So just want to get your confidence on that $7 between those components, and then a couple cleanups just on catch-up fees in the Q4 and timing for the Arctos close.
Brian Bedell: Great. Thanks for squeezing me in here. Most of my questions have been asked and answered, but maybe just to follow up on a couple. The operating earnings goal of $7+, so the combination of FRE, strategic holdings, and insurance. Just wanted to get your confidence on that. If I, you know, back into that, given the sort of the guide for insurance and strategic holdings, it would imply FRE, you know, maybe a little less than $5.50 a share, which of course meaningfully exceeds the $4.50. So just want to get your confidence on that $7 between those components, and then a couple cleanups just on catch-up fees in the Q4 and timing for the Arctos close.
Speaker #4: Great .
Speaker #4: Thanks for my questions here . have been asked , just to follow but maybe Most of up on a it's not me in .
Speaker #4: The operating earnings goal of $7 plus the combination of free strategic holdings and insurance . Just wanted to get your confidence on that .
Speaker #4: If I , go back into to that , given given the to sort of the guide for insurance and strategic holdings , it would the imply , you maybe a free know , little less than $5.50 a of exceeds the course , meaningfully 450 .
Speaker #4: So to get your , your , your confidence on those that $7 between then a couple of just want just on catch fees components in the And fourth quarter .
Speaker #4: up timing for . close
Robert Lewin: Yeah. So, why don't I just the last two questions are easy to answer. So timing on Arctos close, we think it's Q2. Catch-up fees in the quarter were $26 million, split roughly 50/50 between our private equity and our real assets business lines. And if you look at our growth this quarter, it was 24% on the management fee line item side. Ex catch-up fees still would have been 22% growth on an apples-to-apples basis. As it relates to building blocks on total operating earnings, thanks for asking that question. Clearly a lot of momentum as it relates to our asset management business and FRE. I think what we're doing in insurance and then also strategic holdings, we talked about the $350 million, you know, guide number for 2026.
Robert Lewin: Yeah. So, why don't I just the last two questions are easy to answer. So timing on Arctos close, we think it's Q2. Catch-up fees in the quarter were $26 million, split roughly 50/50 between our private equity and our real assets business lines. And if you look at our growth this quarter, it was 24% on the management fee line item side. Ex catch-up fees still would have been 22% growth on an apples-to-apples basis. As it relates to building blocks on total operating earnings, thanks for asking that question. Clearly a lot of momentum as it relates to our asset management business and FRE. I think what we're doing in insurance and then also strategic holdings, we talked about the $350 million, you know, guide number for 2026.
Robert Lewin: Yeah. So, why don't I just the last two questions are easy to answer. So timing on Arctos close, we think it's Q2. Catch-up fees in the quarter were $26 million, split roughly 50/50 between our private equity and our real assets business lines. And if you look at our growth this quarter, it was 24% on the management fee line item side. Ex catch-up fees still would have been 22% growth on an apples-to-apples basis. As it relates to building blocks on total operating earnings, thanks for asking that question. Clearly a lot of momentum as it relates to our asset management business and FRE. I think what we're doing in insurance and then also strategic holdings, we talked about the $350 million, you know, guide number for 2026.
Speaker #4: .
Speaker #2: why And just the last two are are questions easy to timing and arktos answer . closed . We think So Q2 fees in up catch the quarter were 26 million split
Speaker #2: 5050 between Yep . So our private roughly equity and our real business lines . And if you look at our it quarter , growth this was 24% on the management fee line item side catch up fees still would have been 22% growth on an apples to apples As it basis .
Speaker #2: 5050 between Yep . So our private roughly equity and our real business lines . And if you look at our it quarter , growth this was 24% on the management fee line item side catch up fees still would have been 22% growth on an apples to apples assets question .
Speaker #2: of momentum as to it our asset relates management business I think what for we're doing in . insurance also strategic and then And holdings , talked about the 350 million guide number for 26 .
Robert Lewin: I think we're gonna beat that number. We talked about this on the last call. You know, given where our strategy was in insurance, when we initially talked about the $7 per share of operating earnings, this was before we made the pivot to move in the direction of alternatives in the book, number one. And two, you know, made the final decision that we want to cash account as opposed to mark-to-market accounting. And so when you think about, you know, where we're going in insurance, we talked about $1 billion of operating earnings, plus or minus, for 2026, and of course, that number can move around, you know, based on how the year goes.
Robert Lewin: I think we're gonna beat that number. We talked about this on the last call. You know, given where our strategy was in insurance, when we initially talked about the $7 per share of operating earnings, this was before we made the pivot to move in the direction of alternatives in the book, number one. And two, you know, made the final decision that we want to cash account as opposed to mark-to-market accounting. And so when you think about, you know, where we're going in insurance, we talked about $1 billion of operating earnings, plus or minus, for 2026, and of course, that number can move around, you know, based on how the year goes.
Robert Lewin: I think we're gonna beat that number. We talked about this on the last call. You know, given where our strategy was in insurance, when we initially talked about the $7 per share of operating earnings, this was before we made the pivot to move in the direction of alternatives in the book, number one. And two, you know, made the final decision that we want to cash account as opposed to mark-to-market accounting. And so when you think about, you know, where we're going in insurance, we talked about $1 billion of operating earnings, plus or minus, for 2026, and of course, that number can move around, you know, based on how the year goes.
Speaker #2: we're going to beat that I think number . about this on the last You know , given where call . where our strategy was We talked when we in initially talked $7 per share of about the operating earnings , this before we was made the pivot move in the direction of alternatives in the book .
Speaker #2: one Number and two , final you know , decision made the want that we to cash account as opposed to market mark to And so accounting .
Speaker #2: think when you about , you in know , where we're going we talked insurance , about $1 billion of operating earnings plus or minus 2026 .
Speaker #2: And of course , that number can move around . based You know , on how the year goes . But very on importantly , that's missing .
Robert Lewin: But very importantly, that's missing, you know, what we think is gonna be roughly $350 million of, let's call it economic outcomes from accrued returns in the portfolio, that if we were showing that consistent with most other insurance companies that we compete against in the market, would be showing up in the P&L. We've chosen, for a variety of reasons that we talked about last quarter, to cash account and not have that show up. Just think it makes that total operating earnings metric a little bit less relevant certainly than when we initially discussed it a couple of years ago.
Robert Lewin: But very importantly, that's missing, you know, what we think is gonna be roughly $350 million of, let's call it economic outcomes from accrued returns in the portfolio, that if we were showing that consistent with most other insurance companies that we compete against in the market, would be showing up in the P&L. We've chosen, for a variety of reasons that we talked about last quarter, to cash account and not have that show up. Just think it makes that total operating earnings metric a little bit less relevant certainly than when we initially discussed it a couple of years ago.
Robert Lewin: But very importantly, that's missing, you know, what we think is gonna be roughly $350 million of, let's call it economic outcomes from accrued returns in the portfolio, that if we were showing that consistent with most other insurance companies that we compete against in the market, would be showing up in the P&L. We've chosen, for a variety of reasons that we talked about last quarter, to cash account and not have that show up. Just think it makes that total operating earnings metric a little bit less relevant certainly than when we initially discussed it a couple of years ago.
Speaker #2: what we for You know , think is going to be roughly 350 million of , let's call it economic outcomes from accrued returns in the portfolio that if we were consistent with insurance most other we compete companies that in the against market , be showing PNL , we've up in the chosen for a variety of reasons that we about last quarter .
Speaker #2: cash The account and not have that show would talked it makes that operating total earnings metric a little bit less relevant , certainly , we initially discussed than when it a couple of years ago .
Operator: Our next question comes from the line of John Barnidge with Piper Sandler. Please proceed with your question.
Operator: Our next question comes from the line of John Barnidge with Piper Sandler. Please proceed with your question.
Operator: Our next question comes from the line of John Barnidge with Piper Sandler. Please proceed with your question.
Speaker #3: Our next question comes from the line of Barnidge with Piper Please proceed Sandler . John with your question .
[Analyst] (Piper Sandler): Thank you for the opportunity. I think you talked about this new KKR Solutions having an opportunity to get to $100 billion in AUM over time. Can you maybe talk about how large the sports business within that framework would be? And does that assume any changes in ownership limits by leagues domestically? Thank you.
[Analyst] (Piper Sandler): Thank you for the opportunity. I think you talked about this new KKR Solutions having an opportunity to get to $100 billion in AUM over time. Can you maybe talk about how large the sports business within that framework would be? And does that assume any changes in ownership limits by leagues domestically? Thank you.
John Barnidge: Thank you for the opportunity. I think you talked about this new KKR Solutions having an opportunity to get to $100 billion in AUM over time. Can you maybe talk about how large the sports business within that framework would be? And does that assume any changes in ownership limits by leagues domestically? Thank you.
Speaker #5: opportunity the . I Thank you for think you talked about this new KKR solutions . Having the opportunity to get to $100 billion in AUM over .
Speaker #5: Can you maybe time about how large the sports business within that framework would And does be ? that assume any in ownership limits leagues by domestically ?
Speaker #5: Can you maybe talk about how large the sports business within that framework would be? And does that assume any changes in ownership limits by leagues? Thank you.
Robert Lewin: Yeah, listen, no specific targets as it relates to sports versus GP solutions versus secondaries. We think there's a lot of room to grow across each of those areas. And importantly, you know, one of the key opportunities here for us in this transaction isn't just what Arctos can build in isolation. It's really about being able to, you know, use the presence that they have in the market, the areas they traffic, to help originate across the broader KKR ecosystem. Everything from our insurance business, where we see a lot of opportunity, through to our investing platforms across the firm, through to capital markets. And in turn, if we're able to do that, we also make the Arctos business a lot more relevant in the marketplace to their partners because we provide them a differentiated toolkit.
Robert Lewin: Yeah, listen, no specific targets as it relates to sports versus GP solutions versus secondaries. We think there's a lot of room to grow across each of those areas. And importantly, you know, one of the key opportunities here for us in this transaction isn't just what Arctos can build in isolation. It's really about being able to, you know, use the presence that they have in the market, the areas they traffic, to help originate across the broader KKR ecosystem. Everything from our insurance business, where we see a lot of opportunity, through to our investing platforms across the firm, through to capital markets. And in turn, if we're able to do that, we also make the Arctos business a lot more relevant in the marketplace to their partners because we provide them a differentiated toolkit.
Robert Lewin: Yeah, listen, no specific targets as it relates to sports versus GP solutions versus secondaries. We think there's a lot of room to grow across each of those areas. And importantly, you know, one of the key opportunities here for us in this transaction isn't just what Arctos can build in isolation. It's really about being able to, you know, use the presence that they have in the market, the areas they traffic, to help originate across the broader KKR ecosystem. Everything from our insurance business, where we see a lot of opportunity, through to our investing platforms across the firm, through to capital markets. And in turn, if we're able to do that, we also make the Arctos business a lot more relevant in the marketplace to their partners because we provide them a differentiated toolkit.
Speaker #2: Listen ,
Speaker #2: specific
Speaker #2: targets as it relates to no versus solutions you . versus Yeah . secondaries . We think there's a GP lot of room to grow across each of areas .
Speaker #2: And importantly you know one of the the key opportunities here for us in this transaction just what arctos can isolation . isn't , use the presence that they have in the market , the areas they traffic to help originate across the broader KKR ecosystem .
Speaker #2: Everything from our insurance business , where we see a lot of opportunity through to our investing across the platforms to capital markets . And in turn , if we're able to do that , we also make the business a lot more firm through their partners because arctos them we a differentiated give you an toolkit .
Robert Lewin: Let me give you an example of what that could look like. You think about the sports business as an example, and the Arctos platform today owns minority stakes in a number of sports teams around the world. You know, there is a big opportunity in areas like stadium financing, sports adjacent real estate, where Arctos just doesn't have that toolkit. We do. Everything from the high-grade parts of the capital structure in real estate, all the way through equity, creates investing opportunity for our platform, and then in turn, makes Arctos much more relevant to their partners. It's a key reason why this deal makes a lot of sense for them and for us.
Robert Lewin: Let me give you an example of what that could look like. You think about the sports business as an example, and the Arctos platform today owns minority stakes in a number of sports teams around the world. You know, there is a big opportunity in areas like stadium financing, sports adjacent real estate, where Arctos just doesn't have that toolkit. We do. Everything from the high-grade parts of the capital structure in real estate, all the way through equity, creates investing opportunity for our platform, and then in turn, makes Arctos much more relevant to their partners. It's a key reason why this deal makes a lot of sense for them and for us.
Robert Lewin: Let me give you an example of what that could look like. You think about the sports business as an example, and the Arctos platform today owns minority stakes in a number of sports teams around the world. You know, there is a big opportunity in areas like stadium financing, sports adjacent real estate, where Arctos just doesn't have that toolkit. We do. Everything from the high-grade parts of the capital structure in real estate, all the way through equity, creates investing opportunity for our platform, and then in turn, makes Arctos much more relevant to their partners. It's a key reason why this deal makes a lot of sense for them and for us.
Speaker #2: world . the You know , there is a big in areas like stadium opportunity financing , sports real estate adjacent where arctos that have toolkit .
Speaker #2: world . the You know , there is a big in areas like stadium opportunity financing , sports real estate adjacent where arctos that have toolkit just doesn't We do the everything from grade high parts of the capital structure in the way real through equity creates investing opportunity for our platform , and then in makes turn their arctos relevant to partners .
Speaker #2: a key reason why this much more lot of sense for It's deal makes a for us .
Craig Larson: ... And just to add on, John and Scott, to your second question, our expectation for growth in the sports business is not predicated on any change in the league rules. So it's as they exist today.
Craig Larson: ... And just to add on, John and Scott, to your second question, our expectation for growth in the sports business is not predicated on any change in the league rules. So it's as they exist today.
Craig Larson: And just to add on, John and Scott, to your second question, our expectation for growth in the sports business is not predicated on any change in the league rules. So it's as they exist today.
Speaker #6: Yeah . Just to add on ,
Speaker #6: , your second question , John and our expectation growth in for the sports business is not predicated on any league rules . change in the as they exist today So it's them and .
Operator: Our next question comes from the line of Arnaud Giblat with BNP Paribas. Please proceed with your question.
Operator: Our next question comes from the line of Arnaud Giblat with BNP Paribas. Please proceed with your question.
Operator: Our next question comes from the line of Arnaud Giblat with BNP Paribas. Please proceed with your question.
Speaker #3: Our next question comes from the line of Gilbert with Arnold BNP Paribas . see with Please question your
Arnaud Giblat: Hi, good morning. Just going on to Global Atlantic. If we look at the flow mix, it seems as though it's getting a bit more skewed towards real estate versus the past. So a bit of a change in mix there. Could you confirm if that's the case, and what is driving that mix? And I'm just wondering if that has an impact on margins and on the ROE for the insurance business. Thank you.
Arnaud Giblat: Hi, good morning. Just going on to Global Atlantic. If we look at the flow mix, it seems as though it's getting a bit more skewed towards real estate versus the past. So a bit of a change in mix there. Could you confirm if that's the case, and what is driving that mix? And I'm just wondering if that has an impact on margins and on the ROE for the insurance business. Thank you.
Arnaud Giblat: Hi, good morning. Just going on to Global Atlantic. If we look at the flow mix, it seems as though it's getting a bit more skewed towards real estate versus the past. So a bit of a change in mix there. Could you confirm if that's the case, and what is driving that mix? And I'm just wondering if that has an impact on margins and on the ROE for the insurance business. Thank you.
Speaker #7: Good
Speaker #7: morning . . Just Hi . going on to Global Atlantic . If we look at the flow mix , it seems as though it's getting skewed towards real estate versus the past .
Speaker #7: So a a mix . bit of change in . Could you confirm if case and that's the what driving is that mix . And wondering an on on impact margins and on the for the ROE insurance business .
Robert Lewin: Yeah, Arnaud, thanks for the question. It's Rob. No change in mix. You know, one of the things in real estate is we noted. This goes back to really early 2024. We noted that there was a real opportunity in core real estate, given a real dearth of capital out there for core real estate transactions. And so most of the competition was either core plus capital, but more likely value-added capital, a much higher cost of capital. And so we leaned in in early mid 2024, when we thought valuations really troughed, number one. Number two, there was limited competition. And on an unlevered basis, inside of GA, we were creating some compelling risk return.
Robert Lewin: Yeah, Arnaud, thanks for the question. It's Rob. No change in mix. You know, one of the things in real estate is we noted. This goes back to really early 2024. We noted that there was a real opportunity in core real estate, given a real dearth of capital out there for core real estate transactions. And so most of the competition was either core plus capital, but more likely value-added capital, a much higher cost of capital. And so we leaned in in early mid 2024, when we thought valuations really troughed, number one. Number two, there was limited competition. And on an unlevered basis, inside of GA, we were creating some compelling risk return.
Robert Lewin: Yeah, Arnaud, thanks for the question. It's Rob. No change in mix. You know, one of the things in real estate is we noted. This goes back to really early 2024. We noted that there was a real opportunity in core real estate, given a real dearth of capital out there for core real estate transactions. And so most of the competition was either core plus capital, but more likely value-added capital, a much higher cost of capital. And so we leaned in in early mid 2024, when we thought valuations really troughed, number one. Number two, there was limited competition. And on an unlevered basis, inside of GA, we were creating some compelling risk return.
Speaker #7: Thank you .
Speaker #2: Yeah .
Speaker #2: Yeah .
Speaker #2: question . It's Rob , Ana , thanks no change in mix . You one of the know , if that things real estate in back to this goes really is is early 2024 .
Speaker #2: We noted that there was a real opportunity in core real estate , given a dearth of real capital out there for core real estate transactions .
Speaker #2: And so most of the was either core plus capital , but more likely value added capital with a much higher that has cost of capital .
Speaker #2: And so competition leaned in in early mid 2024 when we thought valuations troughed really Number one , number two , there was limited competition .
Speaker #2: And on unlevered an basis inside of GA , we creating some were compelling risk return , not sizable in the overly context of the broader GA sheet .
Robert Lewin: Not overly sizable in the context of the broader GA balance sheet, but I think will turn out to be really good investments, again, on an unlevered basis across the insurance platform. And over time, I think we'll add to our insurance operating earnings, if those play out in a meaningful way, in large part because, and we talked about this, I remember at the time, you know, these were some of our first investments that had lower yields than they did all-in returns. And so we were originating those transactions at call it a 4% running yield. Our liabilities were 5% to 6%. So definitionally, in our P&L, we're actually losing money.
Robert Lewin: Not overly sizable in the context of the broader GA balance sheet, but I think will turn out to be really good investments, again, on an unlevered basis across the insurance platform. And over time, I think we'll add to our insurance operating earnings, if those play out in a meaningful way, in large part because, and we talked about this, I remember at the time, you know, these were some of our first investments that had lower yields than they did all-in returns. And so we were originating those transactions at call it a 4% running yield. Our liabilities were 5% to 6%. So definitionally, in our P&L, we're actually losing money.
Robert Lewin: Not overly sizable in the context of the broader GA balance sheet, but I think will turn out to be really good investments, again, on an unlevered basis across the insurance platform. And over time, I think we'll add to our insurance operating earnings, if those play out in a meaningful way, in large part because, and we talked about this, I remember at the time, you know, these were some of our first investments that had lower yields than they did all-in returns. And so we were originating those transactions at call it a 4% running yield. Our liabilities were 5% to 6%. So definitionally, in our P&L, we're actually losing money.
Speaker #2: But I good think will turn out to be balance investments . Again , on an unlevered basis across the the insurance platform over and time , I think we'll add our to to our insurance operating earnings .
Speaker #2: to did all returns . And in so we were originating those transactions at a 4% running yield . Our liabilities 5 to 6% .
Speaker #2: to did all returns . And in so we were originating those transactions at a 4% running yield . Our liabilities call it So definitionally in our PNL , we're actually were money .
Speaker #2: play out in a meaningful way , in large because and part about this , remember at the time , you know , these were some first investments that of our had lower yields .
Robert Lewin: However, you know, where we think those investments come out, there's going to be a lot of accreted income that, if it performs, is going to turn into cash income over time. And so we're quite glad we made that pivot, but nothing that would meaningfully change our concentration to the asset class.
Robert Lewin: However, you know, where we think those investments come out, there's going to be a lot of accreted income that, if it performs, is going to turn into cash income over time. And so we're quite glad we made that pivot, but nothing that would meaningfully change our concentration to the asset class.
Robert Lewin: However, you know, where we think those investments come out, there's going to be a lot of accreted income that, if it performs, is going to turn into cash income over time. And so we're quite glad we made that pivot, but nothing that would meaningfully change our concentration to the asset class.
Speaker #2: losing However , If those those investments come out . There's going to be a lot of you know , where accreted income they perform , that if is going to turn into cash income over we're time .
Speaker #2: glad we quite we're made that And so pivot . But nothing that would meaningfully change our concentration to the asset class
Operator: Thank you. We have no further questions at this time. Mr. Larson, I'd like to turn the call back over to you for closing comments.
Operator: Thank you. We have no further questions at this time. Mr. Larson, I'd like to turn the call back over to you for closing comments.
Operator: Thank you. We have no further questions at this time. Mr. Larson, I'd like to turn the call back over to you for closing comments.
Speaker #3: Thank you .
Speaker #3: We have no further questions at this time. Mr. Larson, I'd like to turn the call back over to you for closing comments.
Craig Larson: Christine, thanks for your help, and thanks to everybody for joining our call, and I know it's been a longer call for us. Look forward to chatting with everybody on our next quarter call. Thanks again.
Craig Larson: Christine, thanks for your help, and thanks to everybody for joining our call, and I know it's been a longer call for us. Look forward to chatting with everybody on our next quarter call. Thanks again.
Craig Larson: Christine, thanks for your help, and thanks to everybody for joining our call, and I know it's been a longer call for us. Look forward to chatting with everybody on our next quarter call. Thanks again.
Speaker #8: Christine , thanks for your help and thanks , everybody , for joining our call . been Now , it's longer call Look chatting with forward to on our quarter a call .
Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.
Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.
Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.
Speaker #8: Thanks again .
Speaker #3: gentlemen . This does conclude today's teleconference . You may disconnect your lines at this
