KKR & Co. Inc. Q1 Earnings Call Highlights

Key Points

• KKR posted strong first-quarter results, with fee-related earnings per share of $1.13, total operating earnings of $1.47 per share, and adjusted net income of $1.39 per share, all up roughly 18% to 23% year over year and among the firm’s best ever.
• Fundraising and monetizations remained robust, as KKR raised $28 billion in new capital, saw management fees rise 30% to $1.2 billion, and generated about $880 million in monetization revenue, including $720 million of realized carried interest.
• Management became less certain about hitting its 2026 ANI target on time, saying it is now more likely KKR lands below its prior goal of more than $7 per share by 2026 because exit timing has slowed, though executives stressed the delay is about timing rather than lost value.

KKR & Co. Inc. NYSE: KKR reported higher first-quarter earnings and said fundraising, monetization activity and management fee growth remained strong despite market volatility, while management signaled that its prior $7-plus adjusted net income target for 2026 is now less likely to be reached on schedule.

Craig Larson, partner and head of investor relations, said fee-related earnings per share were $1.13, up 23% year over year. Total operating earnings were $1.47 per share, up 18%, while adjusted net income was $1.39 per share, up 20% from the prior-year period. Larson said all three figures were “among the highest” in the firm’s history.

Management fees totaled $1.2 billion, up 30% from a year earlier, supported by fundraising and deployment across the platform. Excluding catch-up fees in both periods, management fee growth was “a touch north of 20%,” Larson said. He added that KKR’s fee base remains diversified, with private equity, real assets and credit each contributing about one-third of total fees over the trailing 12 months.

Total transaction and monitoring fees were $253 million, while capital markets fees were $224 million, in line with the prior quarter. Fee-related earnings were more than $1 billion, and KKR’s fee-related earnings margin was about 69% at March 31.

Fundraising Momentum Continues Across Credit, Private Equity and Wealth

Chief Financial Officer Rob Lewin said KKR raised $28 billion of new capital during the quarter, with demand spread across asset classes and geographies. Credit accounted for $15 billion of the total, driven in part by the firm’s asset-based finance business, which Lewin said now represents more than $90 billion of assets under management.

Lewin said KKR also completed the final close of its North America Fund XIV at $23 billion, exceeding the prior $19 billion fund. Across its latest Americas, Europe and Asia flagship regional private equity funds, KKR has $46 billion of total capital to invest, he said.

In the wealth channel, KKR’s K-Series suite brought in $4 billion of capital in the quarter, while redemptions totaled about $250 million. Assets under management in K-Series stood at more than $38 billion. Lewin said flows in the first quarter were stronger than management expected given market conditions, though he said KKR expects a slowdown in the second quarter, similar to what it saw after tariff-related announcements last year.

During the question-and-answer portion of the call, Larson said K-Series assets were up from $21 billion a year earlier, even amid market volatility. Co-Chief Executive Officer Scott Nuttall said wealth remains a “multi-decade build” for KKR and that the firm’s focus is on performance and earning trust with advisers and clients.

Monetizations Increase, but Timing Clouds 2026 ANI Target

KKR generated about $880 million of monetization revenue in the quarter, up more than 50% from the first quarter of 2025. Realized carried interest was $720 million, up 120% year over year, Lewin said.

Recent transactions included the closing of the sale of OneStream Software at 4.5 times KKR’s cost and the sale of CoolIT Systems at nearly 15 times cost. Lewin also cited agreed sales of two 2021 investments, one in infrastructure expected to generate about a 2 times multiple of money and one in traditional private equity at nearly 3 times cost. KKR also completed a secondary sale of its remaining shares in HD Hyundai Marine Solution in Korea, producing a more than 7 times multiple of capital over the life of that investment.

Still, Lewin said KKR now has “modestly less visibility” than it had when it entered the year expecting 2026 adjusted net income to reach more than $7 per share, assuming a more normalized monetization environment. He said it is now “more likely” that KKR lands below that level, though delayed monetizations would be expected to shift into 2027 and beyond rather than be lost.

“This is just timing. This isn’t magnitude,” Nuttall said in response to an analyst question about potential delays in strategic exits.

Insurance, Direct Lending and Capital Allocation in Focus

KKR’s insurance segment produced operating earnings of $260 million. Larson said that figure would have been slightly above $300 million if it included the impact of marks on investments where a significant portion of return relates to appreciation rather than cash yield. He said total insurance economics over the trailing 12 months were $1.9 billion net of compensation, up 14% from the prior period.

Analysts asked about competition in annuities and Global Atlantic. Lewin said competition on the liability side is “very high,” while asset-side spreads have been tight, pressuring returns. He said KKR was disciplined on pricing and more selective in the retail channel during the quarter, though recent spread widening may create a more attractive entry point.

KKR also addressed questions around direct lending. Larson said direct lending totals $39 billion, or 5% of KKR’s assets under management. The firm’s private BDC footprint is about $3 billion, or 0.4% of total AUM, while FSK accounts for a little less than 2% of AUM. Larson said KKR included additional disclosure in its earnings release to provide context on direct lending investment performance.

On capital allocation, Lewin said KKR has four primary tools: strategic mergers and acquisitions, insurance, share buybacks and strategic holdings. The firm closed its acquisition of Arctos, which Lewin described as a leading investor in professional sports franchise stakes and GP solutions, with about $16 billion of AUM and $10 billion of fee-paying AUM.

KKR also repurchased or retired $317 million of stock through May 1 at an average price of about $91. Lewin said the board authorized a $500 million increase to the share repurchase program. Larson said KKR increased its annualized dividend to $0.78 per share, marking the seventh consecutive annual increase since its corporate structure change.

Management Reaffirms Confidence in Long-Term Earnings Power

Strategic holdings generated operating earnings of $48 million in the quarter. Larson said KKR continues to track toward expected strategic holdings operating earnings of more than $350 million for 2026, with earnings expected to be more back-end weighted.

KKR’s embedded gains, consisting of gross carry and gains on the balance sheet across asset management and strategic holdings, were $18.3 billion at March 31, up 11% from a year earlier. Lewin said embedded gains remain near record levels and provide visibility into future earnings potential.

Nuttall said KKR’s operating metrics have shown consistent growth over multiple years, while the volatility in the company’s stock is disconnected from the “lived experience” of the business. He said first-quarter results continued that trend, with key metrics up about 20% from the prior year.

Lewin said KKR remains confident it can exceed its 2026 targets for fundraising, strategic holdings operating earnings and fee-related earnings per share. He said more than 90% of KKR’s capital is perpetual or committed for eight years or more, and the firm has $125 billion of committed but uncalled capital.

About KKR & Co. Inc. NYSE: KKR

KKR & Co Inc is a global investment firm headquartered in New York City that specializes in private markets and alternative asset management. Founded in 1976 by Jerome Kohlberg Jr., Henry Kravis and George R. Roberts, the firm built its reputation in leveraged buyouts and has since expanded into a multi-strategy asset manager. KKR operates across private equity, credit, real assets (including real estate and infrastructure), growth equity and hedge fund strategies, offering a range of investment products and strategies for institutional and private investors.

KKR manages capital through traditional closed-end funds as well as customized vehicles such as separate accounts, co-investments, and listed investment vehicles.

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