Q2 2026 KKR & Co Inc Earnings Call

July 30, 2026

Operator: Ladies and gentlemen, thank you for standing by. Welcome to KKR's Q2 2026 earnings conference call. During today's presentation, all parties will be in the listen-only mode. Following management's prepared remarks, the conference will be open for questions. At that time, if you'd like to ask a question, please press star one on your telephone keypad. I will now hand the call over to your host, Craig Larson, Partner and Head of Investor Relations for KKR. Craig, please go ahead.

Benjamin Budish: Ladies and gentlemen, thank you for standing by. Welcome to KKR's Q2 2026 earnings conference call. During today's presentation, all parties will be in the listen-only mode. Following management's prepared remarks, the conference will be open for questions. At that time, if you'd like to ask a question, please press star one on your telephone keypad. I will now hand the call over to your host, Craig Larson, Partner and Head of Investor Relations for KKR. Craig, please go ahead.

Speaker #1: thank you for standing by. Welcome to KKR's second quarter 2026 earnings conference call. During today's presentation, all parties will be in the listen-only mode. remarks, the conference will be open for questions. time, if you'd like to ask a question, please press star 1 on your telephone keypad.

Craig Larson: Thank you, operator. Good morning, everyone, and welcome to our Q2 2026 earnings call. This morning, as usual, I am joined by Rob Lewin, our Chief Financial Officer, and Scott Nuttall, our Co-Chief Executive Officer. We would like to remind everyone that we will 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. This call will contain forward-looking statements which do not guarantee future events or performance. Please refer to our earnings release and our SEC filings for cautionary factors about these statements. This quarter, Rob is going to begin by reviewing our key growth drivers as a firm and how those are impacting our results. Afterwards, I will review our Q2 results in more detail.

Speaker #2: call. This morning, as usual, Good morning, everyone, and welcome to our second quarter 2026 earnings I'm joined by Rob Lewin, our Chief Financial Officer.

Speaker #2: 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.

Speaker #2: This call will And as a reminder, contain forward-looking statements, which do not guarantee future events or performance, please refer to our earnings release and our SEC filings for cautionary factors about these statements.

Speaker #2: This quarter, Rob's going to begin by reviewing our key growth drivers as a firm and how those are impacting our results. And afterwards, I'll review our Q2 results in more detail.

Speaker #2: And so with that, I'd like to hand the call over to Rob.

Craig Larson: With that, I would like to hand the call over to Rob.

Speaker #1: Great. Thanks a lot, Craig. And thank you, everyone, for joining our call this morning. We've been in an environment with a lot of volatility and noise around our space.

Speaker #1: Great. Thanks a lot, Craig. And thank you, everyone, for joining our call this morning. We've been in an environment with a lot of volatility and noise around our space. today and go through how we are seeing things. As a firm, we feel better positioned than ever to drive differentiated earnings growth. from four key secular and structural growth drivers. encouraging and what I will walk you through in the second part of my remarks is that we continue to see these drivers play out in our operating results, as well as our financial performance.

Rob Lewin: Great. Thanks a lot, Craig. Thank you, everyone, for joining our call this morning. We have been in an environment with a lot of volatility and noise around our space. I wanted to take a step back today and go through how we are seeing things. We feel better positioned than ever to drive differentiated earnings growth. Our confidence here comes from four key secular and structural growth drivers. What is particularly encouraging, and what I will walk you through in the second part of my remarks, is that we continue to see these drivers play out in our operating results as well as our financial performance. Let me first start by laying out our framework. First, we are fortunate to operate in high-growth industries with multiple mega trends.

Speaker #1: First, we are What is particularly future. And we We are in the midst But let me first start The alternative of a global capex cycle, AI, digital, and energy infrastructure, defense, industrial, so massive needs here for capital, on a So I wanted to take a step back global basis.

Rob Lewin: The alternative asset management industry has been growing at a healthy rate, we expect that to continue well into the future. We are in the midst of a global CapEx cycle, AI, digital and energy infrastructure, defense, industrial. Massive needs here for capital on a global basis, which makes our industry increasingly relevant. From a geographic perspective, we continue to see significant opportunity in Asia. The Asia Pacific region today is one of the most dynamic parts of the world and represents roughly 60% of the expected global GDP growth. It is the area where alternatives are the least penetrated relative to the US and Europe, creating an enormous opportunity across private equity, infrastructure, real estate, private credit, and insurance. Simultaneously, we are experiencing significant demographic shifts with an aging population that is in need of retirement solutions.

Speaker #1: Which makes our industry increasingly relevant. From a geographic perspective, we continue to see significant opportunity in Asia. The Asia-Pac region today is one of the most dynamic parts of the world.

Speaker #1: And represents roughly 60% of the expected global GDP growth. It is the area where alternatives are the least penetrated, relative to the US and Europe, creating an enormous opportunity across private equity, infrastructure, real estate, private credit, and insurance.

Speaker #1: Simultaneously, we are experiencing significant demographic shifts with an aging population that is in need of retirement solutions. The number of people aged 65 and up around the world is expected to roughly double between now and 2050.

Rob Lewin: The number of people aged 65 and up around the world is expected to roughly double between now and 2050, more individuals are investing for their own retirement. Second, we are well-positioned against that backdrop with multiple identifiable growth avenues across our platform. Just to take you through a few of them. We have one of the largest infrastructure platforms in the world at approximately $120 billion of AUM. We are benefiting from that demographic shift and need for retirement solutions in both our insurance and our wealth businesses. In GA, we see significant opportunity to grow both in the US and internationally, especially in markets like Japan. In wealth, we remain bullish around the likelihood of individual investors allocating more to alternatives over time and believe we are still in the earliest days of this theme playing out.

Speaker #1: And more individuals are investing for their own retirement. Second, we are well-positioned against that backdrop with multiple identifiable growth avenues across our platform. Just to take you through a few of them.

Speaker #1: We have one of the largest infrastructure platforms in the world at approximately $120 billion of AUM. We are benefiting from that demographic shift and need for retirement solutions in both our insurance and our wealth businesses.

Speaker #1: In GA, we see significant opportunity to grow both in the US and internationally, especially in markets like Japan. And in wealth, we remain bullish around the likelihood of individual investors allocating more to alternatives over time, and believe we are still in the earliest days of this theme playing out.

Speaker #1: We have a differentiated presence and track record in Asia. We are the largest private equity player. We're the largest infrastructure player. We have rapidly growing real estate and credit businesses.

Rob Lewin: We have a differentiated presence and track record in Asia. We are the largest private equity player, we are the largest infrastructure player, we have rapidly growing real estate and credit businesses, and we see a huge opportunity in insurance. We have built a platform over the past 20 years that cannot be replicated overnight given our track record, our geographic coverage, our brand, as well as our existing footprint, which includes nine offices and nearly 1,000 people on the ground in the region, over 200 of whom are sitting in Tokyo. I could really go on here. We have a world-class private equity business that continues to grow rapidly. We have a leading asset-based finance platform. We are seeing increased demand in private investment grade and are incredibly well-positioned for that opportunity.

Speaker #1: And we see a huge opportunity in insurance. We have built a platform over the past 20 years that cannot be replicated overnight. Given our track record, our geographic coverage, our brand, as well as our existing footprint.

Speaker #1: This includes nine offices and nearly 1,000 people on the ground in the region, over 200 of whom are based in Tokyo. And I could really go on here.

Speaker #1: We have a world-class private equity business that continues to grow rapidly. We have a leading platform. We are seeing increased demand in private investment-grade and our incredibly well-positioned for that opportunity.

Speaker #1: And with our acquisition of Arctos, we believe we can scale KKR's solutions to over $100 billion of AUM over time. The third driver is our differentiated business model.

Rob Lewin: With our acquisition of Arctos, we believe we can scale KKR Solutions to over $100 billion of AUM over time. The third driver is our differentiated business model. We have been very purposeful in building a business model that allows us to meaningfully grow our earnings and share price over the long term without requiring us to significantly increase our headcount or sacrifice our culture in order to do so. In our asset management business, there is substantial growth in front of us, and we have been intentional about creating additional ways to take full advantage of the broader KKR ecosystem over the next 10 to 20 years. That is why we also have an insurance business and strategic holdings.

Speaker #1: We have been very purposeful in building a business model that allows us to meaningfully grow our earnings and share price over the long term, without requiring us to significantly increase our headcount or sacrifice our culture in order to do so.

Speaker #1: In our asset management business, there are substantial growth in front of us. And we have been intentional about creating additional ways to take full advantage of the broader KKR ecosystem over the next 10 to 20 years.

Speaker #1: That is why we also have an insurance business and strategic holdings. Both of those segments leverage many of the core competencies that we have built 50 years.

Rob Lewin: Both of those segments leverage many of the core competencies that we have built up in asset management over the past 50 years, including our investing acumen, our access to differentiated capital, certainly our brand, and our collaborative culture. This brings me finally to that unique culture and how it could be a real accelerator of growth. We run KKR as one firm with one compensation approach. Relationships travel, ideas travel, lessons learned travel. Our culture creates much of our investing alpha. This is why we have built a business model that allows us to keep the firm small and maintain that competitive advantage. Importantly, KKR employees also own approximately 30% of our shares. For context, the other companies in the S&P 500 have an average of approximately 2% insider ownership. It is that ownership mentality that fundamentally shapes how we think about capital allocation and long-term value creation.

Speaker #1: Including our investing acumen, our access to differentiated capital, certainly our brand, and our collaborative culture. Which brings me finally to that unique culture and how it could be a real accelerator of growth.

Speaker #1: We run KKR as one firm with one compensation approach. Relationships travel. Ideas travel. Lessons learned travel. Our culture creates much of our investing alpha, which is why we have built a business model that allows us to keep the firm small and maintain that competitive advantage.

Speaker #1: Importantly, KKR employees also own approximately 30% of our shares. For context, the other companies in the S&P 500 have an average of approximately 2% inside our ownership.

Speaker #1: So it's that ownership mentality that fundamentally shapes how we think about capital allocation, and long-term value creation. We are incredibly well-aligned with our shareholders.

Rob Lewin: We are incredibly well-aligned with our shareholders. Now, I will walk you through some examples of how these drivers are showing up in our results. Let me first start with an example of a secular tailwind and how we are positioning ourselves. AI and the need for infrastructure build-out behind it will require trillions of dollars of investment over the coming decade. To date, we have committed and invested over $75 billion across digital infrastructure and power. However, our existing infrastructure funds carry diversification guidelines that limit how much we could dedicate to a single theme relative to the scale of that opportunity. We formed Helix Digital Infrastructure, which we announced in June, with over $10 billion of initial long-duration committed capital. Helix is an AI infrastructure company that delivers coordinated data center, power, and connectivity to hyperscalers.

Speaker #1: Now, I will walk you through some examples of how these drivers are showing up in our results. Let me first start with an example of a secular tailwind and how we are positioning ourselves.

Speaker #1: AI and the need for infrastructure buildout behind it will require trillions of dollars of investment over the coming decade. To date, we have committed and invested over $75 billion across digital infrastructure and power.

Speaker #1: However, our existing infrastructure funds carry diversification guidelines that limit how much we could dedicate to a single theme relative to the scale of that opportunity.

Speaker #1: So we formed Helix Digital Infrastructure, which we announced in June, with over $10 billion of initial long-duration committed capital. Helix is an AI infrastructure company that delivers coordinated data center, power, and connectivity to hyperscalers.

Speaker #1: It is a perpetual open-ended vehicle that adds to our perpetual capital base, where KKR will earn management fees and performance fees. Alongside our infrastructure team, Helix is led by Adam Selipsky, who is the former CEO of Amazon Web Services.

Rob Lewin: It is a perpetual open-ended vehicle that adds to our perpetual capital base, where KKR will earn management fees and performance fees. Alongside our infrastructure team, Helix is led by Adam Selipsky, who is the former CEO of Amazon Web Services. Adam brings first-hand experience scaling the world's largest cloud business and deep insight into hyperscaler priorities. NVIDIA and Vistra joined us as important strategic partners, and together with Kuwait Investment Authority and KKR as founding investors. Pairing KKR's track record here and our expertise with the execution capabilities at Helix, we believe that we have unique positioning against what is a mega trend. Turning to our asset management growth avenues and fundraising. The execution here has been tangible. At our April 2024 Investor Day, we set out a three-year, $300 billion fundraising target. That was an ambitious number for us at the time, given our size.

Speaker #1: Adam brings firsthand experience scaling the world's largest cloud business and deep insight into hyperscaler priorities. NVIDIA and Vistra joined us as important strategic partners and, together with Kuwait Investment Authority, and KKR as founding investors.

Speaker #1: Pairing KKR's track record here and our expertise with the execution capabilities at Helix. We believe that we have unique positioning against what is a megatrend.

Speaker #1: Turning to our asset management growth avenues and fundraising. The execution here has been tangible. At our April 2024 investor day, we set out a 3-year $300 billion fundraising target.

Speaker #1: That was an ambitious number for us at the time, given our size. Since the beginning of 2024 through June 30th of this year, we have raised $305 billion of capital, with $34 billion coming in in Q2.

Rob Lewin: Since the beginning of 2024 through 30 June of this year, we have raised $305 billion of capital, with $34 billion coming in in Q2. Beating our three-year target in just two and a half years. In those two and a half years, we have seen significant AUM growth across our platform. Private equity increased approximately 45%. Infrastructure has doubled. Our credit business is up roughly 35%. Asia increased over 35%. Third-party insurance is up over 50%. Wealth increased six times, and we are still in the earliest of days. With the closing this quarter, we now manage approximately $20 billion of capital through Arctos, with significant upside in front of us. Alongside investment performance, an important driver of our broad-based fundraising success relates to capital return. A common narrative that investors hear is that our industry isn't returning capital to investors.

Speaker #1: So beating our 3-year target in just 2 and a half years. In those 2 and a half years, we have seen significant AUM growth across our platform.

Speaker #1: Private equity increased approximately 45%. Infrastructure has doubled. Our credit business is up roughly 35%. Asia increased over 35%. Third-party insurance is up over 50%.

Speaker #1: Wealth increased 6 times, and we are still in the earliest of days. And with the closing this quarter, we now manage approximately $20 billion of capital through Arctos, with significant upside in front of us.

Speaker #1: Alongside investment performance, an important driver of our broad-based fundraising success relates to capital return. A common narrative that investors hear is that our industry isn't returning capital, to investors.

Speaker #1: This is just not accurate from a KKR perspective. We've actually had an acceleration in exit activity. The second quarter was the largest monetization quarter in our history.

Rob Lewin: This is just not accurate from a KKR perspective. We've actually had an acceleration in exit activity. Q2 was the largest monetization quarter in our history. Let me turn your attention to page 21 of our earnings release. Here, you see some of the activity in just this quarter alone, as well as transactions that we've announced but have not yet closed. Importantly, exits have been diversified across strategies, regions, and exit type, and reflect strong returns with multiples ranging from two times to up to 20 times of our invested capital. Our success here speaks to the quality and maturity of our portfolio, the strength of our operational teams, and the collaborative culture that I mentioned earlier.

Speaker #1: Let me turn your attention to page 21 of our earnings release. Here, you see some of the activity in just this quarter alone. As well as transactions that we've announced but have not yet closed.

Speaker #1: Importantly, exits have been diversified across strategies, regions, and exit type. And reflect strong returns with multiples ranging from 2 times to up to 20 times of our invested capital.

Speaker #1: Our success here speaks to the quality and maturity of our portfolio, the strength of our operational teams, and the collaborative culture that I mentioned earlier.

Speaker #1: And despite our heightened level of monetization activity over the last 3 years, the remaining unrealized gains in our portfolio have continued to grow. And today stand at roughly $18 billion.

Rob Lewin: Despite our heightened level of monetization activity over the last three years, the remaining unrealized gains in our portfolio have continued to grow, and today stand at roughly $18 billion. Now, let me address our differentiated business model and some of the impacts that we are seeing in our results. In Q2, our FRE margin was 70% and has been over 65% for the last 10 consecutive quarters. We do not view that as a ceiling. The reason for that goes back to our business model. We have no ambition to be all things to all people in asset management. Rather, we want to be great in the areas that we are already present.

Speaker #1: Now, let me address our differentiated business model and some of the impacts that we are seeing in our results. In Q2, our FRE margin was 70% and has been over 65% for the last 10 consecutive quarters.

Speaker #1: And we do not view that as a ceiling. The reason for that goes back to our business model. We have no ambition to be all things to all people in asset management.

Speaker #1: Rather, we want to be great in the areas that we are already present. So if we are successful at executing on our business plan, and we have a lot of confidence as a management team that we will be, we are going to continue to grow our revenue at a pace that meaningfully exceeds our headcount and expense growth.

Rob Lewin: If we are successful at executing on our business plan, and we have a lot of confidence as a management team that we will be, we are going to continue to grow our revenue at a pace that meaningfully exceeds our headcount and expense growth. You're starting to see that operating leverage flow through our financials. When we look to future earnings growth, we saw significant latent earnings within our asset management, insurance, and strategic holding segments. Let's go through them. Within asset management first, we have a record amount of capital on which we are not yet earning fees, with $72 billion committed, and that is up almost 30% since this time last year. It has a weighted average management fee of about 90 basis points that turns on when the capital is either invested or enters its investment period.

Speaker #1: You're starting to see that operating leverage flow through our financials. And when we look to future earnings growth, we still have significant latent earnings within our asset management, insurance, and strategic holding segments.

Speaker #1: Let's go through them, with an asset management first. We have a record amount of capital on which we are not yet earning fees, with $72 billion committed.

Speaker #1: And that is up almost 30% since this time last year. And it has a weighted average management fee of about $90 basis points. That turns on when the capitals either invested or enters its investment period.

Speaker #1: And second, our average annual performance income eligible deployment over the past 5 years has more than doubled versus the prior 5-year period. And it is that more recent deployment that is going to drive future performance-related income.

Rob Lewin: Second, our average annual performance income-eligible deployment over the past five years has more than doubled versus the prior five-year period. It is that more recent deployment that is going to drive future performance-related income. Significant visibility into future earnings growth. In insurance, there's embedded growth that hasn't shown up in our P&L, given we report largely based on cash outcomes. As a reminder, we've been focused on elongating GA's liability profile and in turn growing our alternatives portfolio, which we are showing on a cash outcomes basis versus mark-to-market. Including the impact of mark-to-market, insurance operating earnings would have been north of $600 million year to date. Looking at strategic holdings, our existing portfolio and activity gives us confidence that we could scale strategic holdings operating earnings From $187 million over the LTM period to $1.1+ billion by 2030. Finally, on our alignment.

Speaker #1: So significant visibility into future earnings growth. In insurance, there's embedded growth that hasn't shown up in our P&L, given we report largely based on cash outcomes.

Speaker #1: As a reminder, we've been focused on elongating GA's liability profile and, in turn, growing our alternatives portfolio. Which we are showing on a cash outcomes basis versus mark-to-market.

Speaker #1: Including the impact of mark-to-market, insurance operating earnings would have been north of $600 million year to date. And looking at strategic holdings, our existing portfolio and activity gives us confidence that we could scale strategic holdings operating earnings from $187 million over the LTM period to $1.1-plus billion by 2030.

Speaker #1: Finally, on our alignment. As we disclosed in our intra-quarter press release in late June, this quarter we made an important structural change to how we report our K-series private equity vehicle.

Rob Lewin: As we disclosed in our intra-quarter press release in late June, this quarter we made an important structural change to how we report our K-Series private equity vehicle. We are now reporting realized performance fees earned from this vehicle within Fee Related Performance Revenues within our segment earnings, which is subject to a 15% to 20% compensation rate. Historically, these fees were included within Realized Performance Income and were subject to a 70% to 80% compensation rate. We feel this change conforms to current industry practice and enhances comparability for investors. Given the compensation rate impact, all else equal, this change structurally increases KKR's forward earnings per share and I think further reflects our commitment to alignment. As owners of approximately 30% of KKR stock, we do think like shareholders first.

Speaker #1: We are now reporting realized performance fees earned from this vehicle within fee-related performance revenues. Within our segment earnings. Which is subject to a 15 to 20 percent compensation rate.

Speaker #1: Historically, these fees were included within realized performance income and were subject to a 70 to 80 percent compensation rate. We feel this change conforms to current industry practice, and enhances comparability for investors.

Speaker #1: And given the compensation rate impact, all else equal, this change structurally increases KKR's forward earnings per share and I think further reflects our commitment to alignment.

Speaker #1: As owners of approximately 30% of KKR stock, we do think like shareholders first. We have tremendous confidence in our forward monetization pipeline and our ability to generate differentiated performance outcomes.

Rob Lewin: We have tremendous confidence in our forward monetization pipeline and our ability to generate differentiated performance outcomes, which gives us the confidence to make changes like this to enhance long-term earnings per share growth. Putting this all together, multi-decade secular tailwinds, multiple growth avenues across geographies and asset classes, a business model that allows us to compound earnings over a long period of time, and a culture built on alignment and long-term outcomes. We are confident in our ability to drive differentiated earnings growth for many years to come. With that, I'm going to hand the call back over to Craig, he's going to walk you through our record Q2 results in some additional detail.

Speaker #1: Which gives us the confidence to make changes like this to enhance long-term earnings per share growth. Putting this all together, multi-decade secular tailwinds, multiple growth avenues across geographies and asset classes, a business model that allows us to compound earnings over a long period of time, and a culture built on alignment and long-term outcomes.

Speaker #1: We are confident in our ability to drive differentiated earnings growth for many years to come. With that, I'm going to hand the call back over to Craig and he's going to walk you through our record Q2 results in some additional detail.

Speaker #2: Thanks, Rob. In short, you're seeing continued performance at a very high level across KKR. First, for the quarter, we're reporting record results across all three of our headline financial metrics.

Craig Larson: Thanks, Rob. In short, you're seeing continued performance at a very high level across KKR. First, for the quarter, we're reporting record results across all three of our headline financial metrics: Fee Related Earnings, Total Operating Earnings, and Adjusted Net Income per share. Over the trailing 12 months, LTM results for all three of these metrics also set historic highs. In terms of our key operating metrics, new capital raised over the LTM as well as capital invested over the LTM also hit all-time highs, outpacing again any other 12-month period in our history. Looking more specifically at Q2, FRE per share came in at $1.32. That is up 34% on a year-over-year basis. Total Operating Earnings of $1.68 per share are up 27% year-over-year. Adjusted Net Income per share of $1.63 are up 38% year-over-year. Going into the P&L in a little more detail.

Speaker #2: Fee-related earnings, total operating earnings, and adjusted net income per share. Over the trailing 12 months, LTM results for all three of these metrics also set historic highs.

Speaker #2: And in terms of our key operating metrics, new capital raised over the LTM, as well as capital invested over the LTM, also hit all-time highs.

Speaker #2: Outpacing again any other 12-month period in our history. Looking more specifically at Q2, FRE per share came in at $1.32. That is up 34% on a year-over-year basis.

Speaker #2: Total operating earnings of $1.68 per share are up 27% year-over-year, and adjusted net income per share of $1.63 is up 38% year-over-year. Going into the P&L in a little more detail.

Speaker #2: Management fees and management fee growth continues to be strong. For Q2, management fees were $1.2 billion. That's up 26% year-over-year. Excluding catch-up fees in both periods, management fee growth was 18%.

Craig Larson: Management fees and management fee growth continues to be strong. For Q2, management fees were $1.2 billion. That's up 26% year over year. Excluding catch-up fees in both periods, management fee growth was 18%. This activity has been driven by both our fundraising success, really across all of our asset classes, alongside continued healthy deployment. Spending a minute on these two topics. First on fundraising. As Rob mentioned a moment ago, we raised $34 billion of new capital in the quarter with demand really widespread across asset classes and geographies, and that brings capital raised over the LTM to $133 billion. It's worth beginning with infrastructure and taking a step back for a moment. You've seen us raise approximately $45 billion of capital for our latest vintage funds and new initiatives as the platform continues to expand.

Speaker #2: This activity has been driven by both our fundraising success, a really across all of our asset classes, alongside continued healthy deployment. So spending a minute on these two topics, first on fundraising as Rob mentioned a moment ago, we raised $34 billion of new capital in the quarter with demand really widespread across asset classes and geographies.

Speaker #2: And that brings capital raise over the LTM to $133 billion. It's worth beginning with infrastructure and taking a step back for a moment. You've seen us raise approximately $45 billion of capital for our latest vintage funds and new initiatives as the platform continues to expand.

Speaker #2: That includes Infra5 and Asia Infra3, which as of June 30 are at $25 billion and counting on a combined basis. Plus Helix, which Rob touched on a few moments ago.

Craig Larson: That includes Infra V and Asia Infra III, which as of 30 June are at $25 billion and counting on a combined basis. Plus Helix, which Rob touched on a few moments ago. Our global climate transition strategy, as well as capital raised over the LTM at our K-series infra vehicles and our diversified core infra strategy. Ultimately, these figures highlight the breadth and depth of our infrastructure platform. You're seeing capital raised for different geographies, different risk-reward, and through different distribution channels, as well as, crucially, our track record of delivering on behalf of our clients. In wealth, inflows across our K series have rebounded nicely after the April lows seen across the industry. In total, we brought in $3 billion of capital in Q2, and K series AUM now stands at $42 billion, compared to approximately $25 a year ago, so up almost 70% year over year.

Speaker #2: Our global climate transition strategy, as well as capital raised over the LTM at our K-series infra vehicles and our diversified core infra strategy—ultimately, these figures highlight the breadth and depth of our infrastructure platform.

Speaker #2: You're seeing capital raised for different geographies, different risk-reward, and through different distribution channels, as well as, crucially, our track record of delivering on behalf of our clients.

Speaker #2: In wealth, inflows across our K-series have rebounded nicely after the April lows seen across the industry. In total, we brought in $3 billion of capital in Q2 and K-series AUM now stands at $42 billion compared to approximately $25 a year ago, so up almost 70% year-over-year.

Speaker #2: So despite all of the noise around wealth in our industry and all the headlines, KKR's experienced healthy net inflows with total K-series AUM year-to-date through June 30, up over 20%.

Craig Larson: Despite all of the noise around wealth in our industry and all the headlines, KKR's experienced healthy net inflows with total K series AUM year to date through 30 June, up over 20%. Also of note, we're reaching new milestones within Arctos where we had the final close of the inaugural Keystone fund at over $6 billion. That's the largest first-time fund in the broader GP solution space and the first fund closed since KKR completed its acquisition of Arctos back in May. On the investing side, we deployed $24 billion of capital in Q2, bringing us to $104 billion of capital invested over the LTM, healthy investment activity this quarter really diversified again across our segments. Turning back now to the P&L. Total transaction and monitoring fees were $221 million in the quarter. Capital markets fees were $178 million, and Fee Related Performance Revenues were $255 million.

Speaker #2: And also of note, we're reaching new milestones within Arctos where we had the final close of the inaugural Keystone Fund at over $6 billion.

Speaker #2: That's the largest first-time fund in the broader GP Solutions space and the first fund closed since KKR completed its acquisition of Arctos back in May.

Speaker #2: On the investing side, we deployed $24 billion of capital in Q2, bringing us to $104 billion of capital invested over the LTM, so healthy investment activity this quarter, really diversified again across our segments.

Speaker #2: Turning back now to the P&L, total transaction and monitoring fees were $2201 million, excuse me, in the quarter. Capital markets fees were $178 and fee-related performance revenues were $255 million.

Speaker #2: Fee-related performance revenues are up meaningfully year-over-year, driven by our offshore infrastructure and private equity K-series vehicles. And as Rob walked through, this is the first quarter that the crystallization from private equity wealth is sitting within FRPR.

Craig Larson: Fee Related Performance Revenues are up meaningfully year over year, driven by our offshore infrastructure and private equity K-series vehicles. As Rob walked through, this is the first quarter that the crystallization from private equity wealth is sitting within FRPR. Fee Related Compensation was again right at the midpoint of our guided range, which as a reminder, is 17.5%. Other operating expenses for the quarter came in at $210 million. In total, Fee Related Earnings were $1.2 billion or the $1.32 per share figure that I mentioned a few moments ago, and our FRE margin came in just above 70%. Spending a few moments on insurance. Segment operating earnings came in at $288 million in Q2. Three things of note here. First, we had approximately $40 million of net realization activity in our alternatives book in the quarter.

Speaker #2: Fee-related compensation was again right at the midpoint of our guided range, which as a reminder is 17.5%. Other operating expenses for the quarter came in at $210 million.

Speaker #2: So in total, fee-related earnings were $1.2 billion, or the $1.32 per share figure that I mentioned a few moments ago, and our FRE margin came in just above 70%.

Speaker #2: Spending a few moments on insurance. Segment operating earnings came in at $288 million in Q2. Three things of note here. First, we had approximately $40 million of net realization activity in our alternatives book in the quarter.

Speaker #2: We've noted historically on these calls how we report based on cash outcomes for the alternatives portfolio with GA, and over time, as the portfolio seasons and realizations occur, you should expect to see gains run through the P&L and provide a lift to our reported operating earnings.

Craig Larson: We've noted historically on these calls how we report based on cash outcomes for the alternatives portfolio with GA. Over time, as the portfolio seasons and realizations occur, you should expect to see gains run through the P&L and provide a lift to our reported operating earnings. That's what you saw this quarter. We don't think that $40 million is a quarterly run rate figure for us as the alts portfolio is still quite young and is maturing, but it's certainly a positive sign of a trajectory that we see over time. Second, as a reminder, insurance segment operating earnings alone do not capture the impact of GA recognizing the economics that are part of asset management. This is really important. Slide 17 of our earnings release outlines our total insurance economics.

Speaker #2: And that's what you saw this quarter. Now, we don't think that $40 million is a quarterly run-rate figure for us, as the alt portfolio is still quite young in its maturing.

Speaker #2: But it's certainly a positive sign of the trajectory that we see over time. Second, as a reminder, insurance segment operating earnings alone do not capture the impact of GA recognizing the economics that are part of asset management.

Speaker #2: And this is really important. Slide 17 of our earnings release outlines our total insurance economics. So alongside insurance operating earnings, we receive management fees under our investment management agreement, fees from IV-related vehicles, where we have $62 billion of AUM up from approximately $50 billion just a year ago.

Craig Larson: Alongside insurance operating earnings, we receive management fees under our investment management agreement, fees from Ivy-related vehicles, where we have $62 billion of AUM, up from approximately $50 billion just a year ago, as well as GA-related capital markets fees, which we think can reach hundreds of millions annually over time. Considering all of these pieces, total insurance economics were $2 billion net of compensation over the LTM. That's up 13% versus the prior period, and that growth rate would have been higher, including the impact of mark-to-market on our alts portfolio. Finally, it's worth emphasizing how well GA is positioned strategically because of our ability to bring together liability origination and asset origination at scale. On the liability side, our decades of experience and well-established insurance franchise provides a differentiated base of long-duration liabilities across products and geographies, complemented by access to third-party insurance sidecar capital.

Speaker #2: As well as GA-related capital markets fees, which we think can reach hundreds of millions annually over time. So considering all of these pieces, total insurance economics were $2 billion, net of compensation, over the LTM.

Speaker #2: That's up 13% versus the prior period. And that growth rate would have been higher, including the impact of mark-to-market on our alt portfolio. And finally, it's worth emphasizing how well GA is positioned strategically because of liability origination and asset origination at scale.

Speaker #2: On the liability side, our decades of experience and well-established insurance franchise provides a differentiated base of long-duration liabilities across products and geographies, complemented by access to third-party insurance sidecar capital.

Speaker #2: And on the asset side, KKR's origination engine including 20 proprietary ABF platforms with more than 7,000 employees alongside of our globally integrated investment teams allows us to originate and tailor bespoke solutions.

Craig Larson: On the asset side, KKR's origination engine, including 20 proprietary ABF platforms with more than 7,000 employees alongside of our globally integrated investment teams, allows us to originate and tailor bespoke solutions. We also believe we can scale our insurance business globally, particularly in Asia, where our brand's track record and distribution capabilities position us well to increase our presence. Turning now to strategic holdings operating earnings. We earned $37 million in the quarter. Perhaps more importantly, we continue to have a lot of confidence in the $350-plus million of strategic holdings operating earnings for 2026, with that activity, as we've expressed previously, more back-end weighted over the course of 2026. Altogether, total operating earnings or the more recurring components of our earning streams were $1.68 per share. That's up 27% year over year.

Speaker #2: And we also believe we can scale our insurance business globally, particularly in Asia, where our brand track record and distribution capabilities position us well to increase our presence.

Speaker #2: Turning now to strategic holdings operating earnings. We earned $37 million in the quarter. Perhaps more importantly, we continue to have a lot of confidence in the $350-plus million of strategic holdings operating earnings for 2026, with that activity as we've expressed previously, more back-end weighted over the course of 2026.

Speaker #2: So altogether, total operating earnings or the more recurring components of our earnings streams were $1.68 per share. That's up 27% year-over-year. And over the last 12 months, 84%, again 84% of our total pre-tax segment earnings were driven by these more recurring earnings streams, which again, we feel demonstrates the durability of our business model.

Craig Larson: Over the last 12 months, 84%, again, 84% of our total pre-tax segment earnings were driven by these more recurring earning streams, which again, we feel demonstrates the durability of our business model. Moving to investing earnings within our asset management segment. We had the highest monetization quarter in our history with Realized Performance Income of $848 million and Realized Investment Income of $220 million, which includes $30 million of investment gains generated from our strategic holdings segment. As Rob ran through, we added slide 21 to our earnings release to highlight all of our activity here. Even with all of the realization activity, total remaining unrealized gains, so again, that's gross carry, together with the gains that sit on our balance sheet across asset management and strategic holdings, stand at $18.2 billion as of 30 June.

Speaker #2: Moving to investing earnings within our asset management segment, we had the highest monetization quarter in our history, with realized performance income of $848 million.

Speaker #2: And realized investment income of $220 million, which includes $30 million of investment gains generated from our strategic holding segment. As Rob ran through, we added slide 21 to our earnings release to highlight all of our activity here.

Speaker #2: And even with all of the realization activity, total remaining unrealized gains so again, that's gross carry together with the gains that sit on our balance sheet across asset management and strategic holdings, stand at 18.2 billion as of June 30.

Speaker #2: After interest expense and taxes, adjusted net income was just about $1.5 billion for Q2, or the $1.63 per share figure I mentioned at the beginning of my remarks.

Craig Larson: After interest expense and taxes, Adjusted Net Income was just about $1.5 billion for Q2 or the $1.63 per share figure I mentioned at the beginning of my remarks. Turning to investment performance. Page 10 of the release highlights the broad-based performance we continue to generate across our portfolio. Within traditional PE, our portfolio appreciated 4% in the quarter and 9% over the last 12 months. Performance was led by our Americas portfolio, with strong appreciation across both our public and private investments. Across the remainder of the platform, our infrastructure portfolio appreciated 1% in the quarter and 8% over the last 12 months. Opportunistic real estate was down modestly in the quarter but remained positive over the trailing 12 months. While both our leverage credit and alternative credit composites generated positive returns in the quarter and appreciated 5% over the last year.

Speaker #2: Turning to investment performance, page 10 of the release highlights the broad-based performance we continue to generate across our portfolio. Within traditional PE, our portfolio appreciated 4% in the quarter and 9% over the last 12 months.

Speaker #2: Performance was led by our America's portfolio, with strong appreciation across both our public and private investments. Across the remainder of the platform, our infrastructure portfolio appreciated 1% in the quarter and 8% over the last 12 months.

Speaker #2: Opportunistic real estate was down modestly in the quarter but remained positive over the trailing 12 months. While both our leveraged credit and alternative credit composites generated positive returns in the quarter, an appreciated 5% over the last year.

Speaker #2: So in summary, we had a strong Q2, and we have a great deal of momentum as we enter the second half of the year.

Craig Larson: In summary, we had a strong Q2, and we have a great deal of momentum as we enter the H2 of the year. With that, Scott, Rob, and I are happy to take your questions.

Speaker #2: And with that, Scott, Rob, and I, are happy to take your questions.

Speaker #1: At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad.

Operator: At this time, we'll be conducting a question and answer session. If you'd 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'd like to remove your question from the queue. We ask that analysts please limit to one question and return to the queue if they have a follow-up. 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. Our first question comes from Alex Blostein with Goldman Sachs. Your line is now live.

Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue.

Speaker #1: We ask that analysts please limit themselves to one question and return to the queue if they have a follow-up. For participants using speaker equipment, it may be necessary to pick up your handset.

Speaker #1: Before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Alex Bloston. With Goldman Sachs, your line is now live.

Speaker #3: Hi, good morning. Thanks, everybody, for taking the question. A bit of a high-level question first for you guys. So when we think about KKR's management figure trajectory, really strong 2026, obviously in the back of a number of larger flagships kind of hitting the run rate.

Alex Blostein: Hi. Good morning. Thanks, everybody, for taking the question. A bit of a high-level question first for you guys. When we think about KKR's management fee growth trajectory, really strong 2026, obviously on the back of a number of larger flagships kind of hitting the run rate. As you look forward into 2027, maybe it would be helpful to just take a step back and talk through some of the biggest drivers of management fee growth into next year, given the tough comps from 2026. How do you think about the kind of multi-year management fee growth algorithm in the business broadly? Thanks.

Speaker #3: As you look forward into '27, maybe it would be helpful to just take a step back and talk through some of the biggest drivers of management figure growth into next year, given the tough comps from 2026.

Speaker #3: And how do you think about the kind of multi-year management figure growth algorithm in the business broadly? Thanks.

Speaker #2: Yeah, great. Thanks a lot, Alex. It's Rob. Why don't I start, and maybe Scott will add on. I think you've hit on a real strong point for us on management fees.

Rob Lewin: Yeah. Great. Thanks a lot, Alex. It's Rob. Why don't I start and maybe Scott will add on. I think you've hit on a real strong point for us in management fees. We've said this on these calls before, but I think bears repeating. I think you'd be hard-pressed to find another asset management firm that's combined our scale, our diversity of management fees, as a reminder, roughly one-third of our management fees come from each of our three business lines, and also the growth rate that we've had on management fees. It's been a real strong suit for us. As we think about the forward, we've got a lot of momentum. 30-plus products over the next 12 to 18 months. You're seeing some record fundraising numbers for us over the past 12 months that's going to drive future capital raising.

Speaker #2: And we've said this on these calls before, but I think bears repeating. I think you'd be hard-pressed to find another asset management firm that's combined our scale our diversity of management fees as a reminder, roughly one-third of our management fees come from each of our three business lines.

Speaker #2: And also the growth rate that we've had on management fees so it's been a real strong suit for us. And as we think about the forward, we've got a lot of momentum.

Speaker #2: 30-plus products over the next 12 to 18 months. You're seeing some record fundraising numbers for us over the past 12 months that's going to drive future capital raising.

Speaker #2: The amount of committed capital that is not yet bearing fees is at a record level for us as well. So again, a great forward indicator as it relates to future management fees, and there's certain parts of our business, including now KKR Solutions, where we're just getting going.

Rob Lewin: The amount of committed capital that is not yet bearing fees is at a record level for us as well. Again, a great forward indicator as it relates to future management fees. There's certain parts of our business, including now KKR Solutions, where we're just getting going, and we see lots of opportunity in front of us. As we think about that multi-year outlook for management fees, we continue to see a lot of upside going forward.

Speaker #2: And we see lots of opportunity in front of us. So as we think about that multi-year outlook for management fees, we continue to see a lot of upside going forward.

Speaker #4: Hey, Alex. It's Scott. Maybe I'll take the opportunity of your question to just maybe give a broader sense, not just management fees, but how we're just feeling overall and how we're seeing things.

Scott Nuttall: Hey, Alex, it's Scott. Maybe I'll take the opportunity of your question to just maybe give a broader sense, not just management fees, but how we're just feeling overall and how we're seeing things. We've been public 17 years. Joe and I've been here 30. As you and I've talked about, our space is subject to periodic bouts of external pessimism, and periodic bouts of optimism. In our time here, I don't recall a period of time where the external perception is so disconnected from the operating fundamentals and how it feels inside the firm. In our experience, the best response to pessimism is performance. We're largely inclined to let the numbers do the talking. We also recognize all the external narratives. We sympathize with how hard it must be to try to decipher what's what.

Speaker #4: We've been public 17 years. Joe and I have been here 30. As you and I have talked about, our space is subject to periodic bouts.

Speaker #4: Of external pessimism. And periodic bouts of optimism. In our time here, I don't recall a period of time where the external perception is so disconnected from the operating fundamentals and how it feels inside the firm.

Speaker #4: And in our experience, the best response to pessimism is performance. And so we're largely inclined to let the numbers do the talking. But we also recognize all the external narrative.

Speaker #4: We sympathize with how hard it must be to try to decipher what's what. So I just want to spend a second going through what we hear, anyway, as some of the sources of pessimism that you may be getting barraged by, and how it feels inside the firm.

Scott Nuttall: I just want to spend a second going through kind of what we hear anyway as some of the sources of pessimism that you may be getting barraged by and kind of how it feels inside the firm. There seem to be, I would put it in five buckets. First is private credit. Anxiety about that space. For us, we expect a record third-party credit fundraising year. Second area of concern tends to be private wealth. We've all seen a lot of articles about redemptions, anxiety about the forward opportunity, and whether it's different than everybody thought a year or two ago. As the guys mentioned, private wealth AUM up 70% last 12 months. Even more importantly, over 20% in H1. We've seen a meaningful rebound from the April lows. What you don't read about in the articles is the inflows.

Speaker #4: And there seem to be, I would put it, in five buckets. First is private credit—anxiety about that space. For us, we expect a record third-party credit fundraising year.

Speaker #4: Second area of concern tends to be private wealth. We've all seen a lot of articles about redemptions. Anxiety about the forward opportunity and whether it's different than everybody thought a year or two ago.

Speaker #4: As the guys mentioned, private wealth AUM up 70% last 12 months. Even more importantly, over 20% in the first half, and we've seen a meaningful rebound from the April lows.

Speaker #4: What you don't read about in the articles is the inflows. But we're up 20% net. Year to date. Third bucket of concern tends to be private equity monetizations aren't happening.

Scott Nuttall: We're up 20% net year to date. Third bucket of concern tends to be private equity monetizations aren't happening. You saw the results, you heard the narrative. Record monetization year for us. Fourth is software. It's all going to be disrupted by AI. It's about 6% of our AUM. We sold OneStream, which is a software business, for four and a half times our cost earlier this year. We're still seeing high single-digit LTM revenue and EBITDA growth. The fifth thing I would say is the four big buckets of anxiety lead to an overall concern that this is going to slow down fundraising. Year to date, we're ahead of expectations. Record LTM fundraising. We expect a record fundraising year for the firm. Our momentum feels like it's accelerating.

Speaker #4: You saw the results. You heard the narrative. Record monetization year. For us. Fourth is software. It's all going to be disrupted by AI. It's about 6% of our AUM.

Speaker #4: We sold one stream, which is a software business for four and a half times our cost earlier this year. And we're still seeing high single-digit LTM revenue and EBITDA growth.

Speaker #4: And then the fourth the fifth thing I'll say is the four big buckets of anxiety lead to an overall concern that this is going to slow down fundraising.

Speaker #4: And year to date, we're ahead of expectations. Record LTM fundraising we expect a record fundraising year for the firm. And our momentum feels like it's accelerating.

Speaker #4: So you put all that together, net income up 40% in the quarter, 30% in the first half, so acknowledging not everything's perfect everywhere, all the time.

Scott Nuttall: You put all that together, net income up 40% in the quarter, 30% in the H1. Acknowledging not everything's perfect everywhere all the time, but wanted to share kind of a little bit about it feels inside the firm right now. Our industry is increasingly K-shaped, and most of the external focus is going to be on the unhappy part of the K. We find ourselves on the happy part of the K, and that's what's showing up in the numbers. Thanks for the question.

Speaker #4: But wanted to share kind of a little bit about it feels inside the firm right now. Our industry is increasingly K-shaped. And most of the external focus is going to be on the unhappy part of the K.

Speaker #4: We find ourselves on the happy part of the K, and that's what's showing up in the numbers. But thanks for the question.

Speaker #3: No, thank you for that perspective.

Alex Blostein: No, thank you for that perspective.

Speaker #1: Our next question comes from Craig. Was Bank of America. Your line is now live.

Operator: Our next question comes from Craig Siegenthaler with Bank of America. Your line is now live.

Speaker #5: Good morning, Scott. Rob Craig. Hope everyone's doing well. And Scott, really appreciate your perspective on that last one. Our question is on global Atlantic, and it's a two-parter.

Craig Siegenthaler: Good morning, Scott, Rob, Craig. Hope everyone's doing well. Scott, really appreciate your perspective on that last one. Our question is on Global Atlantic, and it's a two-parter. How has GA's organic growth outlook evolved across retail annuities, flow reinsurance blocks, and the institutional channel? Can you also provide an update on the ROE trajectory, just given higher competition than prior years?

Speaker #5: How has GA's organic growth outlook evolved across retail annuities, flow reinsurance, blocks, and the institutional channel? And can you also provide an update on our reach trajectory?

Speaker #5: That's just given higher competition than in prior years.

Speaker #2: Thanks, Craig. Yeah, all good. Appreciate the question, Craig, and in part, those questions are related. Listen, we talked about it last quarter and continue to talk about it this quarter.

Scott Nuttall: Thanks, Craig. Rob, you want to take that?

Rob Lewin: Yeah. I'll go. Appreciate the question, Craig, in part, those questions are related. Listen, we talked about it last quarter, continue to talk about it this quarter. We have seen heightened competition. We've made the determination that we're going to allocate a little bit less capital to insurance based on what we're seeing in the market today. Interestingly, if you look at what we did in Q2, very consistent with the evolution of the business. The liabilities that we did originate in Q2, 99% of those liabilities were at least five years in duration. Approximately 80% of those liabilities were seven years in duration. It's allowed us then to, in turn, start to lean in a little bit more on the alternative side. That would be point one that I'd reference.

Speaker #2: We have seen heightened competition. We've made the determination that we're going to allocate a little bit less capital to insurance based on what we're seeing in the market.

Speaker #2: Today, but interestingly, if you look at what we did in Q2, very consistent with the evolution of the business. And the liabilities that we did originate in the second quarter, 99% of those liabilities were at least five years in duration, approximately 80% of those liabilities were seven years in duration.

Speaker #2: So it has allowed us, then, to in turn start to lean in a little bit more on the alternative side. And so that would be point one.

Speaker #2: That I'd reference. A lot of a lot that we a lot of the time spent in our insurance business here of course, we're day-to-day optimizing for results and frankly, repricing our book of liabilities week to week based on the market.

Rob Lewin: A lot of the time spent in our insurance business here, of course, we're day-to-day optimizing for results and frankly, repricing our book of liabilities week to week based on the market. It's hard to give a forward outlook as organic growth because honestly, it's going to be a function of where the markets are. Importantly, where I think we're incredibly well-positioned here is in a world where we see heightened volatility. I think you're going to have less competition on the asset side. Of course, spreads are going to expand, we think in turn, that is probably going to lend itself to less competition on the liability side. From our perspective, we've spent a ton of time figuring out how is it that we can make sure that we are competitively advantaged in that market where ROEs structurally are going to be materially higher.

Speaker #2: So it's hard to give a forward outlook as organic growth, because honestly, it's going to be a function of where the markets are. But importantly, where I think we're incredibly well positioned here is in a world where we see heightened volatility.

Speaker #2: I think you're going to have less competition on the asset side. Of course, spreads are going to expand. And we think in turn, that is probably going to lead lend itself to less competition on the liability side.

Speaker #2: And so, from our perspective, we spent a ton of time figuring out how we can make sure that we are competitively advantaged in that market, where ROEs structurally are going to be materially higher.

Speaker #2: And when you think about how we set ourselves up, longer duration liabilities, real linkage between liability origination and asset origination, and I think most importantly and differentiated our amount of third-party capital, where we've got $6 billion of dry powder that we think translates to north of $60 billion of buying power on the liability side, not a lot of insurance companies in the world are able to do that.

Rob Lewin: When you think about how we set ourselves up, longer duration liabilities, real linkage between liability origination and asset origination, and I think most importantly and differentiated, our amount of third-party capital, where we've got $6 billion of dry powder that we think translates to north of $60 billion of buying power on the liability side. Not a lot of insurance companies in the world are able to do that. We think in combination, we're incredibly well-positioned for that more volatile environment, and that's why when you think about ROEs in insurance, we think it makes sense to look at that through a cycle. We're at a period of time here where we think ROEs are structurally low given the competition on both the asset side, where spreads are, and on the liability side.

Speaker #2: We think in combination, we're incredibly well positioned for that more volatile environment. And that's why when you think about ROEs and insurance, we think it makes sense to look at that through a cycle.

Speaker #2: And we're at a period of time here where we think ROEs are structurally low, given the competition on both the asset side—where spreads are—and on the liability side.

Speaker #5: Thanks, Rob.

Craig Siegenthaler: Thanks, Rob.

Rob Lewin: Great.

Speaker #1: Our next question comes from Glen Shore with Evercore. Your line is now live.

Operator: Our next question comes from Glenn Schorr with Evercore. Your line is now live.

Speaker #6: Hi, thanks very much. Scott, I want to follow up on your first comment in the opening remarks, which was about being in the midst of a mega capex, mega cycle, and AI power.

Glenn Schorr: Hi. Thanks very much. Scott, I want to follow up on your first comment in the open remarks was about in the midst of a CapEx mega cycle and AI power, and I think a lot of us agree. The market certain days, like yesterday and the day before, feels more like we're overbuilt, we're priced in, spending's going to come down, cash flow is going to come down. I think it has that schizophrenia in terms of where we are in that cycle. Curious on, A, what you think of that, and B, how does that impact, if any, what risk you hold for clients and on balance sheet as you think about this next industrial revolution and fully monetizing the wave versus managing that risk? Thanks a lot.

Speaker #6: And I think a lot of us agree. But the market certain days like yesterday and the day before, feels more like we're overbuilt, we're priced in, spending's going to come down, cash flow is going to come down.

Speaker #6: And so I think it has that schizophrenia in terms of where we are in that cycle. So curious on A, what you think of that, and B, how does that impact, if any, what risk you hold for clients and on balance sheet as you think about this next industrial revolution and fully monetizing the wave versus managing that risk.

Speaker #6: Thanks a lot.

Speaker #4: I appreciate the question, Glen. And you're right. There is a bit of a schizophrenia. Out there. I'd say net answer for us is we actually think this is a huge opportunity for us as a firm.

Scott Nuttall: I appreciate the question, Glenn. You're right, there is a bit of a schizophrenia out there. I'd say net answer for us is we actually think this is a huge opportunity for us as a firm. As ever, when you have these kind of mega themes, there's ways to do it well and there's ways to do it less well. We're focused, as a reminder, not so much on investing in what's going to be the next chip company or the next LLM. It's more about the opportunities around this development, in particular from an infrastructure and real estate and credit standpoint. It's kind of around the space.

Speaker #4: But as ever, when you have these kinds of mega themes, there are ways to do it well and there are ways to do it less well.

Speaker #4: And so, we're focused, as a reminder, not so much on investing in what's going to be the next chip company or the next LLM. It's more about the opportunities around this development, in particular from an infrastructure, real estate, and credit standpoint.

Speaker #4: So it's kind of around the space. And as maybe I'll ask Craig to kind of give you some of the details on what we've been up to in particular in power and data centers and how we've kind of thought about navigating what's going on right now.

Scott Nuttall: Maybe I'll ask Craig to kind of give you some of the details on what we've been up to, in particular in power and data centers, and how we've kind of thought about navigating what's going on right now.

Speaker #6: Yeah, I think, Glen, the things I'd add on to that. And you're right. We are at this very interesting moment in time. So hyperscaler, data center spreads have widened pretty meaningfully just over the last couple of weeks.

Craig Larson: I think, Glenn, the things I'd add onto that. You're right, we are at this very interesting moment in time. Hyperscaler data center spreads have widened pretty meaningfully just over the last couple of weeks. That stands in contrast to the broader IG markets, which again, still pretty much remain at their tights. We've had year to date, this flurry of jumbo deals. I saw a note a day or two ago. I think we've had more $25-plus billion deals year to date than the last five or six years combined. It does, it feels like there's indigestion. To just echo what Scott said, I know our team's going to be consistent, and I think all the things that you're going to see from us are going to ring true to what we've said historically. We're going to care about our counterparty.

Speaker #6: That stands in contrast to the broader IG markets, which again, still pretty much remain at their tights. And we've had year to date this flurry of Jumbo deals.

Speaker #6: I saw a note a day or two ago—I think we've had more $25-plus billion deals year to date than the last five or six years combined.

Speaker #6: And so it does. It feels like there's indigestion. And so to just echo what Scott said, I know our team's going to be consistent.

Speaker #6: And I think all the things that you're going to see from us are going to ring true to what we've said historically. We're going to care about our counterparty.

Speaker #6: We're going to care about contract terms. And it allows us to be selective and in that context, the volatility we're seeing, we think is helpful for us.

Craig Larson: We're going to care about contract terms. It allows us to be selective. In that context, the volatility we're seeing, we think is helpful for us. While the data center piece does get a lot of the press, again, the digital themes are much broader. Fiber networks, mobile infrastructure. We've been very active across renewables again. Rob gave you some of the stats earlier. That's in addition, speaking about our infrastructure more broadly, around things like electricity and gas transmission and wastewater networks, et cetera. Again, it just feels like there's a lot to do, even in spite of the volatility that we're seeing.

Speaker #6: And while the data center piece does get a lot of the press, again, the digital themes are much broader. Fiber networks, mobile infrastructure, we've been very active across renewables.

Speaker #6: Again, Rob gave you some of the stats earlier. And that's in addition, speaking about our infrastructure more broadly, around things like electricity and gas transmission and wastewater networks, etc.

Speaker #6: So again, there's it just feels like there's a lot to do even in spite of the volatility that we're seeing. Thanks so much.

Glenn Schorr: Thanks so much.

Speaker #4: Thank you.

Rob Lewin: Thank you.

Scott Nuttall: Thank you.

Speaker #1: Our next question comes from Devin Ryan with Citizens Bank. Your line is now live.

Operator: Our next question comes from Devin Ryan with Citizens JMP. Your line is now live.

Speaker #7: Thanks, good morning. Appreciate you taking the question here. I want to ask a question on Arctos. Obviously, there's been some really nice momentum kind of after the transaction close, and with Keystone I think it's just kind of an early example of seeing the benefits of KKR's distribution and the broader client network.

Devin Ryan: Thanks. Good morning. Appreciate taking the question here. I want to ask a question on Arctos. Obviously, some really nice momentum kind of after the transaction close and with Keystone. I think just kind of an early example of kind of seeing the benefits of KKR's distribution and kind of the broader client network. Would love to just kind of more broadly think about the potential for the business as you think about kind of the next sports kind of flagship, then just more broadly, just how it connects to the path to kind of getting that KKR Solutions over 100 billion of AUM. Thanks.

Speaker #7: I'd love to just kind of more broadly think about the potential for the business as you think about kind of the next sports kind of flagship and then just more broadly just how it connects to the path to kind of getting that solutions over 100 billion of AUM.

Speaker #7: Thanks.

Speaker #2: Great, thanks, Devin. Listen, I think there are multiple different paths for growth. What I'd say is that the first couple of months post-closing, the opportunity feels even more significant and more real than we would have thought three months ago on this call, for sure.

Rob Lewin: Great. Thanks, Devin. Listen, I think there's multiple different paths for growth. What I'd say is that the first couple of months post-closing, the opportunity feels even more significant and more real than we would have thought three months ago on this call for sure. You hit on some of it. Arctos is the clear leader on the sports side. The opportunity for us, both in terms of Sports III, but more broadly around sports-related investment across our entire ecosystem is substantial. What we're building in Keystone, north of $6 billion of capital in a first-time fundraise, I think speaks to the credibility of the team. Then, as you think about the opportunity on the secondary space, the people, the connectivity, and what the Arctos team brings to the table, combined with what we bring to the table on the KKR side, between relationships and industry expertise.

Speaker #2: You hit on some of it. Arctos is the clear leader on the sports side. The opportunity for us both in terms of sports three, but more broadly around sports related investment across our entire ecosystem is substantial.

Speaker #2: What we're building in Keystone, north of $6 billion of capital, in a first-time fundraise, I think speaks to the credibility of the team. And then as you think about the opportunity on the secondary space, the people, the connectivity, and what the Arctos team brings to the table combined with what we bring to the table on the KKR side between relationships and industry expertise we believe that we can build a really world-class GP-led business.

Rob Lewin: We believe that we can build a really world-class GP-led business. So we're spending real time thinking about that. Then finally, the opportunity that maybe is a little bit more hidden, but we think is very real, is the opportunity for the Arctos ecosystem to create flow for Global Atlantic. Very important. It was a very important part of our investment thesis. I'm sure we would have talked about it when we announced the transaction. When you combine all of that, we feel really good about the target of $100-plus billion of AUM from our KKR Solutions business over time, and feel great in the early days of how we're coming together culturally, and how we're working together to be able to make sure that we are optimizing the combined footprint of both the Arctos team and the KKR team.

Speaker #2: And so we're spending real time thinking about that. And then finally, the opportunity that maybe is a little bit more hidden, but we think is very real is the opportunity for the Arctos ecosystem to create flow for global Atlantic.

Speaker #2: Very important. It was very important part of our investment thesis. I'm sure we would have talked about it when we announced the transaction. But when you combine all of that, we feel really good about the target of 100 plus billion dollars of AUM.

Speaker #2: From our solutions business over time, we feel great in the early days about how we're coming together culturally and how we're working together to make sure that we are optimizing the combined footprint of both the Arctos team and the KKR team.

Speaker #4: Yeah, Devin, Scott, just the way I think about it, you got three businesses. Sports, fast-growing, incumbent, already the largest player, but the space is young.

Craig Larson: Yeah, Devin. Scott. Just the way I think about it, you got three businesses. Sports, fast-growing incumbent, already the largest player, but the space is young. GP solutions, we're in fund one. We have a differentiated model. Seems like there's a ton of opportunity and growth ahead. Pipeline's big. Then we have a third space, secondaries, which is the startup in a very large TAM. I don't know how the $100-plus billion is going to break down, but we see lots of different ways to get there.

Scott Nuttall: Yeah, Devin. Scott. Just the way I think about it, you got three businesses. Sports, fast-growing incumbent, already the largest player, but the space is young. GP solutions, we're in fund one. We have a differentiated model. Seems like there's a ton of opportunity and growth ahead. Pipeline's big. Then we have a third space, secondaries, which is the startup in a very large TAM. I don't know how the $100-plus billion is going to break down, but we see lots of different ways to get there.

Speaker #4: GP solutions run fund one. We have a differentiated model. Seems like there's a ton of opportunity and growth ahead. Pipeline's big. And then we have a third space, secondaries.

Speaker #4: Which is the startup in a very large TAM. I don't know how the 100 plus billion is going to break down, but we see lots of different ways to get there.

Devin Ryan: Excellent. Thank you.

Speaker #4: Thank you.

Rob Lewin: Thank you.

Scott Nuttall: Thank you.

Speaker #1: Our next question comes from Stephen Tripack with Wolfe Research. Your line is now live.

Operator: Our next question comes from Steven Chubbuck with Wolfe Research. Your line is now live.

Steven Chubak: Rob, Craig, hope you are all well, and thanks for taking my question.

Speaker #5: Hi Rob, Craig. I hope you’re all well, and thanks for taking my question.

Speaker #4: Thanks, Stephen.

Craig Larson: Thanks, Steven.

Steven Chubak: Wanted to ask on the retail strategy. I know that you touched on this a bit in the prepared remarks. K-Series private equity and infra vehicles continue to generate really strong flows. You're benefiting from being less indexed to credit where fundraising headwinds have been more acute. Given the elevated redemptions year to date, commentary suggesting that redemptions have also been more concentrated across a subset of international investors. Whether the recent turmoil has reshaped your approach to expanding retail distribution abroad. If you could speak to the pipeline of new distribution platforms and how it informs the outlook for retail flows over the next six to 12 months, that would be great.

Speaker #5: So I wanted to ask on the retail strategy. I know that you touched on this a bit in the prepared remarks. K-series private equity and infra vehicles continue to generate really strong flows.

Speaker #5: You're benefiting from being less indexed to credit, where fundraising headwinds have been more acute. But given the elevated redemptions year to date, commentary suggests that redemptions have also been more concentrated across a subset of international investors.

Speaker #5: Whether the recent turmoil has reshaped your approach to expanding retail distribution abroad—if you could speak to the pipeline of new distribution platforms, and how it informs the outlook for retail flows over the next 6 to 12 months, that would be great.

Speaker #4: Hey, Stephen and Scott, I'll take a shot. So yeah, you're right. I mean, we've been reading all the news articles as well. As I mentioned before, I mean, we're they tend not to mention the inflows.

Craig Larson: Hey, Steven, it's Scott. I'll take a shot. Yeah, you're right. I mean, we've been reading all the news articles as well. As I mentioned before, they tend not to mention the inflows. That's kind of the fact we're up over 20% year to date net is usually lost from an external standpoint, but those are the numbers. We see a lot of momentum. I think there's a couple things going on with us. Roughly 85% of K-Series is in private equity and infrastructure today. That's maybe a bit different than what others have in terms of exposure. We are continuing to build out our

Scott Nuttall: Hey, Steven, it's Scott. I'll take a shot. Yeah, you're right. I mean, we've been reading all the news articles as well. As I mentioned before, they tend not to mention the inflows. That's kind of the fact we're up over 20% year to date net is usually lost from an external standpoint, but those are the numbers. We see a lot of momentum. I think there's a couple things going on with us. Roughly 85% of K-Series is in private equity and infrastructure today. That's maybe a bit different than what others have in terms of exposure. We are continuing to build out our Asia and Europe platform and relationships.

Speaker #4: So that's kind of the fact we're up over 20% year to date net. It's usually lost from an external standpoint, but those are the numbers.

Speaker #4: And we see a lot of momentum I mean, I think there's a couple of things going on with us. We've kind of roughly 85% of K-series is in private equity and infrastructure today.

Speaker #4: So that's maybe a bit different than what others have in terms of exposure. We are continuing to build out our Asia and Europe platform and relationships.

Scott Nuttall: Asia and Europe platform and relationships. We probably on the margin have a bit less from those markets, although it's roughly 40% of what we've been doing as of late from outside the United States. In terms of the build of the team and the relationships, those are still building outside the US, we think there's lots of opportunity ahead. The short answer to your question is that it has not changed our perspective on investing in growth. I actually think this is long-term very healthy that advisors and clients understand what these products are and are not, and most people are experiential learners.

Speaker #4: We probably on the margin have a bit less from those markets, although it's roughly 40% of kind of what we've been doing as of late from outside the United States.

Scott Nuttall: We probably on the margin have a bit less from those markets, although it's roughly 40% of what we've been doing as of late from outside the United States. In terms of the build of the team and the relationships, those are still building outside the US, we think there's lots of opportunity ahead. The short answer to your question is that it has not changed our perspective on investing in growth. I actually think this is long-term very healthy that advisors and clients understand what these products are and are not, and most people are experiential learners.

Speaker #4: But in terms of the build of the team and the relationships, those are still building outside the US. And we think there's lots of opportunity ahead.

Speaker #4: The short answer to your question, it is that it has not changed our perspective. On investing in growth. I actually think this is long-term very healthy.

Speaker #4: That advisors and clients understand what these products are and are not. And most people are experiential learners. So I think this is great news that while it is a very small percentage of our firm—a fast-growing, small percentage of our firm—I'd rather people learn while it's this size as it pertains to our space, as opposed to a very large percentage of our space.

Scott Nuttall: I think this is great news that while it is a very small percentage of our firm, a fast-growing small percentage of our firm, I'd rather people learn while it's this size as it pertains to our space, as opposed to a very large percentage of our space. I view this as a healthy educational period. If anything, because of that, we would be more comfortable investing even more and having it be a larger percentage of the firm down the road than I would have been if these lessons had not been learned.

Speaker #4: And so I kind of view this as a healthy educational period. And if anything, because of that, we would be more comfortable investing even more and having it be a larger percentage of the firm down the road than I would have been if these lessons had not been learned?

Operator: Our next question comes from Brennan Hawken with BMO Capital Markets. Your line is now live.

Speaker #1: Our next question comes from Brennan Hawken with BMO Capital Markets. Your line is now live.

Speaker #5: Good morning. Thank you for taking my question. I know that you reiterated the earnings target for strategic holdings in your prepared marks, but at this point, and you also said back and loaded, but it really is quite hockey stick looking really.

Brennan Hawken: Good morning. Thank you for taking my question. I know that you reiterated the earnings target for Strategic Holdings in your prepared marks, but at this point, and you also said back-end loaded, but it really is quite hockey stick looking, really. I'd love to know what drives the confidence. Moreover, some investors have expressed concerns that the investments you have in that portfolio could be at risk from AI. The AI risk, I know you touched on software, but business services, we see a lot of sectors trading as though they have some disruption risk there. If you take a wider lens about the AI risk, how would you address those concerns sitting in that portfolio? Thanks.

Speaker #5: So I'd love to know what drives the confidence. Moreover, some investors have expressed concerns that the investments you have in that portfolio could be at risk from AI.

Speaker #5: And the AI risk, I know you touched on software, but business services, we see a lot of sectors trading as though they have some disruption risk there.

Speaker #5: So if you take a wider lens about the AI risk, how would you address those concerns sitting in that portfolio? Thanks.

Speaker #2: Great. Brennan, thanks a lot for the question. Maybe I'll take you back a couple of years when we first introduced the strategic holding segment.

Rob Lewin: Great, Brennan. Thanks a lot for the question. Maybe I'll take you back a couple of years when we first introduced the Strategic Holdings segment. We were probably, and we talked about it then, a little premature in introducing that segment given the scale of the business, but we thought it was appropriate to do so alongside some other large firm announcements, including buying in the remainder of Global Atlantic. What we said at the time was in the early years, you're going to see more quarter to quarter variability of income. As we build to that $1.1 billion plus of operating earnings by 2030, that's when you're going to start to see more quarter to quarter stability of earnings.

Speaker #2: We were probably, and we talked about it then, a little premature in introducing that segment given the scale of the business. But we thought it was appropriate to do so alongside some other large firm announcements, including buying in the remainder of Global Atlantic.

Speaker #2: And what we said at the time was in the early years, you're going to see more quarter to quarter variability of income. And as we build to that a billion one plus of operating earnings by 2030, that's when you're going to start to see more quarter to quarter stability of earnings.

Speaker #2: And you hit on it when we came into this year, we talked about strategic holdings being more back-end weighted from an operating earnings perspective.

Rob Lewin: You hit on it when we came into this year, we talked about Strategic Holdings being more back-end weighted from an operating earnings perspective, and that has played out. As we look to the back half of the year, we've got a lot of confidence that what we need to get done to generate the operating earnings will get done. Still some work to do, of course, to make that happen, but we feel good about that as a team and continually re-underwrite that. As it relates to the portfolio, it continues to perform at a high level. I'd also stress the word portfolio. We've got roughly 20 businesses there with differentiated exposures. While you may have some businesses that are more impacted over time, we think across the portfolio we're in very good shape.

Speaker #2: And that has played out. And as we look to the back half of the year, we've got a lot of confidence that what we need to get done to generate the operating earnings will get done.

Speaker #2: Still some work to do, of course, to make that happen, but we feel good about that as a team and continually re-underwrite that. As it relates to the portfolio, it continues to perform at a high level.

Speaker #2: But I'd also stress the word "portfolio." We've got roughly 20 businesses there with differentiated exposures. And so, while you may have some businesses that are more impacted over time, we think across the portfolio we're in very good shape.

Speaker #2: And I think you could go back, in some respects, even to that monetization slide on page 21. This is not necessarily the point as it relates to strategic holdings.

Rob Lewin: I think you could go back in some respects even to that monetization slide on page 21, this is not necessarily a point as it relates to Strategic Holdings. In a world where investors are nervous about potential losses on the go forward, I think they need to be also taking into context with winners as well in the portfolio where we think we've got many both across our traditional private equity business, but also inside of our Strategic Holdings Segment as well.

Speaker #2: But in a world where investors are nervous about potential losses going forward, I think they need to also take into context winners as well in the portfolio.

Speaker #2: Where we think we've got many, both across our traditional private equity business but also inside of our Strategic Holdings segment as well.

Speaker #5: Thanks for that color, Rob.

Brennan Hawken: Thanks for that color, Rob.

Speaker #2: Thanks.

Rob Lewin: Thanks.

Speaker #4: Thanks, Brennan.

Brennan Hawken: Thanks.

Craig Larson: Thanks.

Speaker #1: Our next question comes from Michael Seifries with Morgan Stanley. Your line is now live.

Operator: Our next question comes from Michael Cyprys with Morgan Stanley. Your line is now live.

Speaker #6: Hey, good morning. Thanks for taking the question. I just wanted to ask about private wealth, which I think has exceeded your expectations there, despite some of the recent volatility.

Michael Cyprys: Hey, good morning. Thanks for taking the question. Just wanted to ask on private wealth, which I think has exceeded your expectations there despite some of the recent volatility. I guess as you look out over the next couple of years, just curious what you see is ultimately driving the greatest impact on adoption rates and penetration within private wealth, whether it's evolving technology or new wrappers. What do you think could be the most meaningful to really scale private wealth adoption more broadly in the channel?

Speaker #6: But I guess as you look out over the next couple of years, I'm just curious what you see as ultimately driving the greatest impact on adoption rates and penetration within private wealth, whether it's evolving technology or new wrappers.

Speaker #6: What do you think could be the most meaningful to really scale private wealth adoption more broadly in the channel?

Speaker #4: Hey, Michael, it's Scott. Let me take a shot. So honestly, I think the first thing is education. Just spending time making sure advisors and their clients understand what private markets is.

Scott Nuttall: Hey, Michael, it's Scott. Let me take a shot. Honestly, I think the first thing is education. Just spending time making sure advisors and their clients understand what private markets is and the different forms of it, whether it's private equity, infrastructure, real estate, or credit. We are running multiple, it seems lately, KKR academies a week, having 100 advisors at a time come in, spend a dinner and a day with us. A lot of the answer to your question on adoption is spending time with them so they understand what it is that we actually do. That, I think, has been the most important thing to try to get right, and we've invested a lot in that over the last few years. That's a global effort. We're running those US, Europe, and Asia.

Speaker #4: And the different forms of it, whether it's private equity, infrastructure, real estate, or credit. And we are running multiple, it seems lately, KKR Academies a week, having 100 advisors at a time come in, spend a dinner and a day with us.

Speaker #4: And a lot of the answer to your question on adoption is spending time with them so they understand what it is that we actually do.

Speaker #4: And that, I think, has been the most important thing to try to get right. We've invested a lot in that over the last few years.

Speaker #4: And that's a global effort. We're running those in the US, Europe, and Asia. The second thing I would say is, obviously, you need access and you need distribution.

Scott Nuttall: The second thing I would say is obviously you need access and you need distribution, which is back to the discussion we had about the relationship with platforms around the world. You need to actually be on the platform, be approved, and then do that education. Building those relationships, and we're watching that closely as to how many different platforms and RIAs our products are on by product type. Those numbers are accelerating up and to the right at a very rapid rate. The third thing I would say is it's also the type of investor. I think as we've talked about on these calls, K-Series is built to be able to go to the accredited investor in the US, which is $1 million and up in net worth. That is a single-digit percentage of US households.

Speaker #4: Which is back to the discussion we had about the relationship with platforms around the world. And so you need to actually be on the platform, be approved, and then do that education.

Speaker #4: So at building those relationships, and we're watching that closely as to how many different platforms and RIAs our products are on by product type.

Speaker #4: And those numbers are accelerating up and to the right at a very rapid rate. The third thing I would say is it's also the type of investor.

Speaker #4: I think as we've talked about on these calls, K-series is built to be able to go to the accredited investor in the US, which is a million and up in net worth.

Speaker #4: That is a single-digit percentage of U.S. households. The other 90-plus percent K-series is not relevant to today. And so that's where our partnership with Capital Group comes in, because we want to further extend our reach and our distribution relationships, and they have relationships with 220,000 of the 300,000 advisors in the United States.

Scott Nuttall: The other 90-plus percent K-Series is not relevant to today. That's where our partnership with Capital Group comes in, because we want to further extend our reach and our distribution relationships. They have relationships with 220,000 of the 300,000 advisors in the United States. If we spend another 50 years at KKR, I'm not sure we could build that kind of relationship and trust with that kind of penetration. That's the other thing that we're doing. We think that'll take time to pay off, but in the long run, we'll meaningfully expand our efforts. Hopefully, that gives you some color.

Speaker #4: If we spend another 50 years at KKR, I'm not sure we could build that kind of relationship and trust with that kind of penetration.

Speaker #4: So that's the other thing that we're doing. We think that'll take time to pay off, but in the long run, we'll meaningfully expand our efforts.

Speaker #4: Hopefully, that gives you some color.

Speaker #6: Great. Thank you.

Craig Larson: Great. Thank you.

Michael Cyprys: Great. Thank you.

Speaker #4: Thank you.

Scott Nuttall: Thank you.

Speaker #1: Our next question comes from Bart Zarsky with RBC Capital Markets. Your line is now live.

Operator: Our next question comes from Bart Zarske with RBC Capital Markets. Your line is now live.

Speaker #6: Thanks, and good morning, everyone. I wanted to ask—you recently made an announcement that you added Roy Gori as a senior advisor. Maybe just walk us through the strategic rationale for that, and how his experience as former CEO of Manulife could help you achieve your investor day target of doubling GA AUM.

Bart Zarske: Thanks, good morning, everyone. I wanted to ask, you recently made an announcement, you added Roy Gori as a Senior Advisor. Maybe just walk us through the strategic rationale for that and how his experience as former CEO of Manulife could help you achieve your investor day target of doubling GA AUM. Thanks.

Bart Dziarski: Thanks, good morning, everyone. I wanted to ask, you recently made an announcement, you added Roy Gori as a Senior Advisor. Maybe just walk us through the strategic rationale for that and how his experience as former CEO of Manulife could help you achieve your investor day target of doubling GA AUM. Thanks.

Speaker #6: Thanks.

Speaker #4: Thanks for the question, Bart. Roy, we've known for many years, did a remarkable job as CEO of Manulife—for that, amongst other things.

Scott Nuttall: Thanks for the question, Bart. Roy, we've known for many years. He did a remarkable job as CEO of Manulife. Before that, amongst other things, he built their Asia business, has lived and worked all around the world. We got to know him first as a client and just really enjoyed the engagement. A lot of wisdom and a lot of experience in terms of how he built with his team that business. Sometimes you spend time with people, and you realize they can make you better. So when he stepped down, we asked if he wanted to spend some more time with us, helping advise us on how we think about all things KKR strategically, insurance and otherwise. As I think we've discussed before, Global Atlantic by name is a bit of an aspirational name. Most of the business today is in the United States.

Speaker #4: He built their Asia business, has lived and worked all around the world, and we got to know him first as a client and just really enjoyed the engagement.

Speaker #4: A lot of wisdom and a lot of experience in terms of how he built that business with his team. And sometimes you spend time with people and you realize they can make you better.

Speaker #4: And so when he stepped down, we asked if he wanted to spend some more time with us, helping advise us on how we think about all things KKR strategically, insurance, and otherwise.

Speaker #4: As I think we've discussed before, global Atlantic by name is a bit of an aspirational name most of the business today is in the United States.

Speaker #4: If you kind of think about the footprint of our insurance business relative to all of KKR, we have half our investment professionals, roughly outside the United States at KKR.

Scott Nuttall: If you think about the footprint of our insurance business relative to all of KKR, we have half our investment professionals, roughly outside the United States at KKR. We're thinking actively about what is there to do outside the US in insurance. We think Roy can be quite helpful with that topic, amongst many others, in particular in Asia, where we're starting to spend quite a bit of time together. Hopefully that gives you a little bit of background, but we just think he's going to make us better at what we do.

Speaker #4: And so we're thinking actively about what there is to do outside the US in insurance. We think Roy can be quite helpful with that topic, among many others.

Speaker #4: In particular, in Asia, where we're starting to spend quite a bit of time together. So hopefully that gives you a little bit of background.

Speaker #4: But we just think he's going to make us better at what we do.

Speaker #6: Very helpful. Thanks.

Bart Zarske: Very helpful. Thanks.

Bart Dziarski: Very helpful. Thanks.

Speaker #4: Thank you.

Scott Nuttall: Thank you.

Speaker #1: Our next question comes from Bradley Hayes with TD Cowen. Your line is now live.

Operator: Our next question comes from Bradley Hayes with TD Cowen. Your line is now live.

Speaker #7: Hi, good morning. You spoke to strong demand for private IG. Could you maybe dig in a little more on your positioning against the opportunity, and perhaps focus a little more on the origination platforms in particular?

Bradley Hayes: Hi. Good morning. You spoke to strong demand for private IG. Could you maybe dig in a little more on your positioning against the opportunity and perhaps focus a little more on the origination platforms in particular?

Speaker #6: Hey, Bradley's Craig. What did I start? So I think, first of all, look, the opportunity is massive. And I think you look at the addressable market in credit—it's $45 trillion—and we're all seeing headlines every day with issuers increasingly turning to private market solutions.

Craig Larson: Hey, Bradley. It's Craig. I think, first of all, look, the opportunity is massive. I think you look at the addressable market in credit, it's $45 trillion. We're all seeing headlines every day with issuers increasingly turning to private market solutions. I think in terms of our business and how we're thinking about it, we look at private IG as all we are doing in asset-based finance, plus bespoke solutions for large established corporates, plus long-duration investments across real estate. When you think of the capital that we have organized against that, it's Global Atlantic. It's through our funds, it's through SMAs, and we have our capital markets business as an additional overlay against all of that. I think most recently, demands from IG issuers for these customized, privately bespoke solutions has really catalyzed the growth of the private IG market.

Speaker #6: I think in terms of our business and how we're thinking about it, we look at private IG as all we are doing in asset-based finance plus bespoke solutions for large established corporates, plus long-duration investments across real estate.

Speaker #6: And when you think of the capital that we have organized against that, it's Global Atlantic, it's through our funds, it's through SMAs, and we have our Capital Markets business as an additional overlay against all of that.

Speaker #6: And I think most recently, demands from IG issuers for these customized privately bespoke solutions has really catalyzed the growth of the private IG market.

Speaker #6: And to answer your question, we think we're really well positioned against this opportunity and our ability to address it at scale. We benefit from collaboration across all our teams.

Craig Larson: To answer your question, we think we're really well-positioned against this opportunity and our ability to address it at scale. We benefit from collaboration across all our teams, the relationships that we have across our private equity and teams. We support companies with holistic solutions. You mentioned some of the origination engines that we have as an advantage for us. That includes the 36 captive platforms across both asset-based finance as well as real assets. We've got five decades of relationships, capital markets, as well as that activity coming through multiple channels. From a fundraising perspective, look, Rob and Scott talked earlier about the outlook we have from a credit fundraising standpoint, but we've been very active across private IG SMAs, and our pipeline feels very good as we look to the H2.

Speaker #6: The relationships that we have across our private equity and teams we support companies with holistic solutions. You mentioned some of the origination engines that we have.

Speaker #6: As an advantage for us, that includes the 36 captive platforms across both asset-based finance as well as real assets. We've got five decades of relationships.

Speaker #6: Capital markets, as well as that activity, are coming through multiple channels. And from a fundraising perspective—look, Rob and Scott talked earlier about the outlook we have from a credit fundraising standpoint—but we've been very active across private IG, SMAs, and our pipeline feels very good as we look to the second half of the year.

Speaker #6: And so, look, stepping back, since the acquisition of GA, our credit business is up—I'll give you some round numbers—from $80 billion to $300 billion.

Craig Larson: Look, stepping back since the acquisition of GA, our credit business is up. Give you some round numbers from $80 billion to $300. Similarly, you look at management fees tied to that growth are also more than three x where they were, up at $1.2 billion. You're seeing a big growth driver for us in this part of the business, and it just feels like in private IG, there's a lot more for us to do alongside.

Speaker #6: And similarly, you look at management fees tied to that growth are also more than 3X where they were. Up at 1.2 billion. So you're seeing the big growth driver for us in this port of the business.

Speaker #6: And it just feels like in private IG, there's a lot more for us to do alongside.

Speaker #4: Yeah, Bradley Scott, just maybe zooming out a little bit. I kind of put a lot of what we're seeing across the firm into a few buckets.

Scott Nuttall: Yeah, Bradley, Scott, just maybe zooming out a little bit. I put a lot of what we're seeing across the firm into a few buckets.

Scott Nuttall: Yeah, Bradley, Scott, just maybe zooming out a little bit. I put a lot of what we're seeing across the firm into a few buckets. When you get one, you got growth areas where we're already top 3, a lot of capital coming into the space. It's just about keep your performance strong, and keep investing in your barriers to entry back to the platforms and the 7,000 plus employees. ABF fits squarely into that bucket 1. You got bucket 2, which is back to my comments about a bit of a K-shaped industry. The happy part of the K is taking market share from the unhappy part of the K. We've got that going on in different aspects of our business.

Speaker #4: When you get one, you’ve got growth areas where we’re already top three, with a lot of capital coming into this space. And it’s just about keeping your performance strong and continuing to invest in your barriers to entry—back to the platforms and the 7,000-plus employees.

Rob Lewin: When you get one, you got growth areas where we're already top 3, a lot of capital coming into the space. It's just about keep your performance strong, and keep investing in your barriers to entry back to the platforms and the 7,000 plus employees. ABF fits squarely into that bucket 1. You got bucket 2, which is back to my comments about a bit of a K-shaped industry. The happy part of the K is taking market share from the unhappy part of the K. We've got that going on in different aspects of our business. I actually think what's going on in terms of this bout with pessimism, our space is feeling this is going to be wonderful for us in the long term, and it'll lead to more growth in the future.

Speaker #4: ABF, it's squarely into that bucket one. You got bucket two, which is back to my comments about a bit of a K-shaped industry. The happy part of the K is taking market share from the unhappy part of the K.

Speaker #4: And so we've got that going on in different aspects of our business. I actually think what's going on in terms of this bout with pessimism our space is feeling is going to be wonderful for us in the long term.

Scott Nuttall: I actually think what's going on in terms of this bout with pessimism, our space is feeling this is going to be wonderful for us in the long term, and it'll lead to more growth in the future. Then the third bucket, I'd say things like wealth or brand, global reach, and scale really matter. Probably a large percentage of the market share is going to go to relatively few. You can take our businesses globally and largely put them into those 3 buckets, but ABF is in bucket 1.

Speaker #4: And it'll lead to more growth in the future. And then the third bucket, I'd say things like wealth, where brand, global reach, and scale really matter.

Rob Lewin: Then the third bucket, I'd say things like wealth or brand, global reach, and scale really matter. Probably a large percentage of the market share is going to go to relatively few. You can take our businesses globally and largely put them into those 3 buckets, but ABF is in bucket 1.

Speaker #4: And probably a large percentage of the market share is going to go to relatively few. You could take our businesses globally and largely put them into those three buckets, but ABF is in bucket one.

Speaker #1: Our next question comes from Mike Brown with UBS. Your line is now live.

Operator: Our next question comes from Michael Brown with UBS. Your line is now live.

Speaker #6: Great. Good morning, Scott from Craig. Hey, Michael. I wanted to maybe dig in a little more on credit. It's great color on ABF.

Michael Brown: Great. Good morning, Scott, Rob, and Craig.

Mike Brown: Great. Good morning, Scott, Rob, and Craig.

Rob Lewin: Hey, Mike.

Michael Brown: I wanted to maybe dig in a little more on credit. Great color on ABF. Just this quarter, we observed that the management fees declined sequentially. Fee paying AUM growth is also relatively muted. Can you just help us unpack the primary drivers there? Based on what you're seeing, how should we think about the trajectory here in H2 in terms of net flows, management fees, and the fee rate here through the rest of the year? Thank you.

Mike Brown: I wanted to maybe dig in a little more on credit. Great color on ABF. Just this quarter, we observed that the management fees declined sequentially. Fee paying AUM growth is also relatively muted. Can you just help us unpack the primary drivers there? Based on what you're seeing, how should we think about the trajectory here in H2 in terms of net flows, management fees, and the fee rate here through the rest of the year? Thank you.

Speaker #6: Just this quarter, we observed that the management fees declined sequentially a few paying AUM growth is also relatively muted. Can you just help us unpack the primary drivers there?

Speaker #6: And then, based on what you're seeing, how should we think about the trajectory here in the second half in terms of net flows, management fees, and the fee rate through the rest of the year?

Speaker #6: Thank you.

Speaker #5: Yeah. Mike, it's Rob. Why don't I start? And I appreciate the question. So, quarter-to-quarter trends can always be a little bit tricky.

Rob Lewin: Yeah. Mike, it's Rob. Why don't I start? Appreciate the question. Quarter-to-quarter trends can always be a little bit tricky. In the case of our credit and liquid strategies business, while not all that material in the context of KKR, we did have a small one-time benefit that showed up in last quarter's management fee line items. I think if you look over a 12-month period of time, your management fees across credit and liquid strategies up almost 10% or just shy of 10%. The other stat I would point you to, which is the best forward indicator around where we're going, is that the capital we have committed to our credit business but that is not yet earning fees will earn fees as it enters its investment period and/or is deployed. That number year-over-year is up 33%.

Speaker #5: In the case of our credit and liquid strategies, business well, not all that material in the context of KKR, we did have a small one-time benefit that showed up in last quarter's management fee line items.

Speaker #5: I think if you look over a 12-month period of time, management fees across credit and liquid strategies up almost 10% or just shy of 10%.

Speaker #5: The other stat I would point you to, which is the best forward indicator around where we're going, is that the capital we have committed to our credit business—but that is not yet earning fees—will earn fees as it enters its investment period and/or is deployed.

Speaker #5: That number year over year is up 33%. So a very healthy increase. And what I think is probably the best forward indicator for that business.

Rob Lewin: A very healthy increase in what I think is probably the best forward indicator for that business.

Speaker #1: Our next question comes from Benjamin Buddish with Barclays Bank. Your line is now live.

Operator: Our next question comes from Benjamin Budish with Barclays Bank. Your line is now live.

Speaker #7: Hi, good morning, and thanks for taking my question. Rob, sometimes on the calls, you'll give a little bit of forward-looking commentary on line of sight to transaction revenues and realizations.

Benjamin Budish: Hi. Good morning, and thanks for taking my question. Rob, sometimes on the calls you'll give a little bit of forward-looking commentary on line of sight to transaction revenues and realizations. Wondering if you could give us any color there. Just given the optimism around the ability to get transactions done even in this kind of environment. I know you kind of talked down the sort of $7 target previously, but is it possible that's on the table? I imagine you've got a decent look into the next five months. Just curious how we should think about all that. Thank you.

Speaker #7: I'm wondering if you could give us any color there, and just given the optimism around the ability to get transactions done, even in this kind of environment.

Speaker #7: I know you kind of talked down the sort of $7 target previously, but is it possible that's on the table? I imagine you've got a decent look into the next five months, just curious how we should think about all that.

Speaker #7: Thank you.

Speaker #5: Great. Thanks, Ben. So for the quarter, I'd say we've got plus or minus $700 million of monetization-related visibility. Maybe a bit of variability there based on the timing of taking carry in certain funds or partnership.

Rob Lewin: Great. Thanks, Ben. For the quarter, I'd say we've got ±$700 million of monetization-related visibility. Maybe a bit of variability there based on the timing of take and carry in certain funds or partnership. In terms of split, about 80% Realized Performance Income and 20% Realized Investment Income. $700 million, a pretty healthy number for us, particularly coming off a record monetization quarter in Q2. We've talked about it. We've got a pretty good pipeline for the duration of the year as well. We're continuing to watch that closely. Listen, as it relates to the $7, we had removed obviously that formal guidance last quarter. I'd say in many ways, it had provided a bit of a distraction as we engaged with our shareholders and analysts.

Speaker #5: In terms of split, about 80% realized performance revenue and 20% realized investment income. $700 million pretty healthy number for us, particularly coming off a record monetization quarter in Q2.

Speaker #5: And then we've talked about it. We've got a pretty good pipeline. For the duration of the year as well. And so we're continuing to watch that closely.

Speaker #5: Listen, as it relates to the $7, we had removed obviously that formal guidance last quarter. I'd say in many ways it had provided a bit of a distraction.

Speaker #5: As we engage with our shareholders and analysts, I think we'd much prefer to focus on the facts that we had record earnings this quarter and eye per share up 40%.

Rob Lewin: I think we'd much prefer to focus on the facts that we had record earnings this quarter, ANI per share up 40%. The go-forward fundamentals in our business are stronger than they've ever been. Whether that translates to $7 per share or something a little south of that, something a little north of that, our focus is on continuing to perform and generate really strong outcomes for our shareholders.

Speaker #5: And the go forward fundamentals in our business are stronger than they've ever been. And so whether that translates to $7 per share, something a little south of that, something a little north of that, our focus is on continuing to perform and generate really strong outcomes for our shareholders.

Speaker #1: All right. Fair enough. Thanks for all of that, Rob. Very helpful.

Benjamin Budish: All right. Fair enough. Thanks for all that, Rob. Very helpful.

Speaker #5: Thank you.

Craig Larson: Thank you.

Rob Lewin: Thank you.

Speaker #4: Thanks, Ben.

Craig Larson: Thanks, Ben.

Speaker #1: Our next question comes from Crispin Love with Piper Sandler. Your line is now live.

Operator: Our next question comes from Crispin Love with Piper Sandler. Your line is now live.

Speaker #8: Thank you. Good morning. Appreciate you taking the question. Just on insurance operating earnings, you've talked about the 250 million plus or minus guide in '26.

Crispin Love: Thank you. Good morning. Appreciate you taking the question. Just on insurance operating earnings, you have talked about the $250 million ± guide in 2026, given the cash accounting. You are closer to about $290 million this quarter. I believe you mentioned the $40 million or so of gains. Can you just discuss how that might trend in the back half of the year? Does that $250 million target still stand? Could you benefit sooner and break above those levels more consistently? As you just get into 2027, could you see a step function higher? Thank you. Bye.

Speaker #8: Given the cash accounting, you're closer to about 290 million this quarter. I believe you mentioned the 40 million or so of gains. Can you just discuss how that might trend in the back half of the year?

Speaker #8: Does that 250 million target still stand? Could you benefit sooner and break above those levels more consistently? And then as you just get into 2027, could you see a step function higher?

Speaker #8: Thank you. Bye.

Speaker #5: Great. Thanks, Crispin. So a couple of building blocks there. I think that the 250 plus or minus still a good number for the go forward.

Rob Lewin: Great. Thanks, Crispin. A couple building blocks there. I think the $250 ± is still a good number for the go forward. We did have an elevated level of realizations in the quarter. I would not assume that that is a run rate for right now. That said, as our alts book continues to mature and we move into back half of 2027 into 2028, we believe we can see outcomes that are materially north of that level. Most important, we continue to feel really well-positioned around what we are doing in insurance. We talked about that earlier on the call and also our prepared remarks. As we think about the go forward there, feel very confident in our model. Lastly, I would point you to page 17 in our earnings release, which looks in the all-in economics of our insurance business.

Speaker #5: We did have an elevated level of realizations in the quarter. I wouldn't assume that that is a run rate for right now. That said, as our alt book continues to mature, and we move into back half of '27 into 2028, we believe we can see outcomes that are materially north of that level.

Speaker #5: Most important, we continue to feel really well positioned around what we're doing in insurance. We talked about that earlier on the call and also our prepared remarks.

Speaker #5: And as we think about the go forward there, feel very confident in our model. And then lastly, I'd point you to page 17 in our earnings release.

Speaker #5: Which looks at the all-in economics of our insurance business. Those are up 13% year on year, even in a world where we've been allocating less capital.

Rob Lewin: Those are up 13% year on year, even in a world where we have been allocating less capital. As a reminder, that does not include the mark to market benefit on the alts portfolio either.

Speaker #5: And as a reminder, that does not include the mark-to-market benefit on the alt portfolio either.

Speaker #8: Great. Thank you, Rob.

Craig Larson: Great. Thank you, Rob.

Crispin Love: Great. Thank you, Rob.

Speaker #5: Thanks, Crispin.

Rob Lewin: Thanks, Christopher.

Speaker #1: Our next question is from Renud Gallot with BNP. Your line is now live.

Operator: Our next question is from Arnaud Giblat with BNP. Your line is now live.

Speaker #9: Good morning. Could you talk more about the capital raised by Athelix Digital Infra? What is the final target size of this fund and the mandate of the fund in particular?

Arnaud Giblat: Good morning. Could you talk more about the capital raised at Helix Digital Infra? What is the final target size of this fund and the mandate of the fund? In particular, I would like to know if Helix will invest in power or if these investments will be provided by your partner, ECP. Is this fund generally incremental or part of the $50 billion targeted deployment that you announced two years ago in conjunction with ECP? Thank you.

Speaker #9: I'd like to know if Helix will invest in power or if this will be or if these investments will be provided by a partner ECP.

Speaker #9: And is this fund generally incremental or part of the 50 billion targeted deployment that you announced two years ago in conjunction with ECP? Thank you.

Speaker #8: ARL's Craig Water, let's start. So a couple of years ago, we did talk about the partnership with ECP. And the opportunities that we saw to bring our collective skills together with a hyperscalers.

Craig Larson: Hey Arnaud, it's Craig Larson. I start. A couple of years ago, we did talk about the partnership with ECP and the opportunities that we saw to bring our collective skills together with the hyperscalers. Yes, that was how we thought capital that KKR had together with ECP, again, would provide that one-stop shop. I think this is incremental and a continued evolution as it relates to the opportunities that we see in the massive CapEx needs that we continue to see from the hyperscaler space. We have a number of strategic partners, again, as Rob ran through. We think there's a real opportunity for us in the framework of a vehicle that is not a closed-end vehicle to work with Adam Selipsky and his team with really differentiated points of view, relationships, experience to help bring those solutions through to hyperscalers.

Speaker #8: And yes, this is and that was how we thought capital the KKR had together with ECP. Again, would provide that one-stop shop. And I think this is incremental and a continued evolution as it relates to the opportunities that we see in the massive capex needs that we continue to see from the hyperscaler space.

Speaker #8: And we have a number of strategic partners again as Rob ran through. We think there's a real opportunity for us in the framework of a vehicle that is not a closed-end vehicle, to work with Adam Selipsky and his team with really differentiated points of view, relationships, experience to help bring those solutions through to hyperscalers.

Speaker #8: The answer is yes, it is broader than just data centers. It is going to encompass a much broader mandate in that framework. So we're just getting going.

Craig Larson: The answer is yes, it is broader than just data centers. It is going to encompass a much broader mandate in that framework. We're just getting going. What you should expect more updates from us over time. This was just an important first step for us.

Speaker #8: And what you should expect more updates from us over time. This was just an important first step for us. Yeah. Hey, Arno. It's Scott.

Scott Nuttall: Yeah. Hey Arnaud, it's Scott. I'd say a couple things. One, it's a company, not a fund. I would think of it as more permanent in nature. In terms of the size target, don't have one. We think the opportunity's in the $10s of billions. We launched with $10+ billion just with the founding investors. We're continuing to talk to investors about large scale participation, and we expect that will be an ongoing process, just like it'll be for any company that's continuing to find very interesting investment and acquisition opportunities. Mandate is to be a one-stop shop for hyperscalers, power, data centers, connectivity, all in one place. Hopefully that helps.

Speaker #8: I'd say a couple of things. One, it's a company, not a fund. And so I would think of it as more permanent in nature.

Speaker #8: In terms of the size target, we don't have one. We think the opportunity is in the tens of billions of dollars. We launched with $10-plus billion just with the founding investors, but we're continuing to talk to investors about large-scale participation, and we expect that will be an ongoing process—just like it will be for any company that's continuing to find very interesting investment and acquisition opportunities.

Speaker #8: Mandate is to be a one-stop shop for hyperscalers. Power data centers, connectivity, all in one place. Hopefully that helps.

Speaker #1: We have reached the end of the question-and-answer session. I'd now like to turn the call back over to Craig Larson for closing comments.

Operator: We have reached the end of the question and answer session. I'd now like to turn the call back over to Craig Larson for closing comments.

Speaker #8: Just thank you, everybody, for your continued interest in KKR. Robert, thank you for your help. And if anybody has follow-up questions, please feel free to reach out to us directly.

Craig Larson: Thank you everybody for your continued interest in KKR. Robert, thank you for your help, and if anybody has follow-up questions, please feel free to reach out to us directly. Thank you, everyone.

Speaker #8: Thank you, everyone.

Speaker #4: Thank you.

Rob Lewin: Thank you.

Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Q2 2026 KKR & Co Inc Earnings Call

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