What KKR & Co. Inc. (KKR) Said on Its Q3 Earnings Call

Key Points

• KKR posted record third-quarter results: Adjusted net income rose 26% year over year to nearly $1.6 billion, while fee-related earnings increased 24% and total operating earnings grew 21%.
• Fundraising and investment capacity remained strong: KKR raised $25 billion in the quarter, invested $20 billion and ended September with a record $146 billion in dry powder. The pending USI sale is expected to generate about $3.3 billion in after-tax proceeds.
• Insurance activity rebounded: Insurance capital raised topped $9 billion, up 42% from the second quarter, and retail new-business volume reached $3.4 billion, compared with $4.5 billion across the first half.

KKR & Co. Inc. NYSE: KKR reported record third-quarter 2026 results across its three headline earnings measures, as management pointed to investment realizations, fundraising and a rebound in insurance activity.

Adjusted net income was nearly $1.6 billion, or $1.78 per share, up 26% from a year earlier, Partner and Head of Investor Relations Craig Larson said on the earnings call. Fee-related earnings rose 24% to $1.42 per share, while total operating earnings increased 21% to $1.88 per share.

Management said it expects to close the year with a third consecutive quarter of record adjusted net income per share, helped by the expected contribution from its announced sale of USI. The transaction remains subject to closing.

Fees and Fundraising Support Results

Quarterly management fees totaled $1.2 billion. Excluding catch-up fees, they rose 16% from a year earlier, Larson said. KKR ended the quarter with $75 billion of assets under management that were not yet paying fees, up 24% since the start of the year.

Fee-related earnings totaled a record $1.3 billion, with a margin of about 71%. Capital markets fees were $290 million, the firm’s third-highest quarterly result, while fee-related performance revenue totaled $326 million.

KKR raised $25 billion in the quarter and $116 billion over the trailing 12 months. It invested $20 billion during the quarter and ended September with a record $146 billion of dry powder, or capital available to invest.

Larson said the firm’s latest flagship Global Infrastructure fund closed at $19.2 billion, exceeding its predecessor’s $17 billion. In private wealth, KKR raised $3 billion during the quarter, and assets in its K-Series vehicles reached $45 billion, up 55% from a year earlier.

Addressing questions about earnings quality, Chief Financial Officer Rob Lewin said the firm has built multiple sources of revenue. He pointed to capital markets fees of more than $600 million in each of 2023 and 2024, when he said markets were largely shut, as evidence that KKR had increased the business’s baseline.

USI Sale and Capital Allocation

KKR has returned $31 billion to clients across private equity, real assets and credit so far in 2026, Lewin said. Including announced transactions and activity completed after September 30, the firm expects that figure to exceed $40 billion for the year, more than 50% above its previous annual record.

The announced sale of USI is expected to generate approximately $3.3 billion of after-tax proceeds and about $2 billion of adjusted net income upon closing, according to Lewin. He said the deal would produce a roughly sixfold return on KKR’s original 2017 investment.

KKR is weighing share repurchases, strategic holdings, acquisitions and insurance investments as uses for capital. From the beginning of the third quarter through November 4, the firm repurchased or retired $567 million of stock. Year-to-date activity exceeded $900 million at an average price of $92 per share, Lewin said.

The CFO said three recently announced strategic holdings investments—Integer, Gen II Fund Services and A1—are expected to generate roughly half of USI’s anticipated operating earnings by 2028 and nearly match them by 2030. KKR reiterated its strategic holdings operating earnings expectations of more than $350 million for 2026 and $1.1 billion for 2030.

Insurance Activity Picks Up

Insurance segment operating earnings were $230 million for the quarter, or $257 million excluding the impact of Global Atlantic’s annual actuarial assumption review and related items, Larson said.

KKR became more active in insurance after being selective in the first half of the year. Insurance capital raised exceeded $9 billion in the third quarter, up 42% from the second quarter and 53% from the first, Lewin said. Retail new-business volume reached $3.4 billion, compared with $4.5 billion for the entire first half.

Lewin attributed the improved opportunity in part to higher rates and movements in fixed-income spreads, while competitors had not necessarily adjusted pricing as quickly. He also said KKR was gradually increasing the share of Global Atlantic’s portfolio allocated to alternatives, which stood at roughly 2%.

A separate sale of a Global Atlantic rail car equipment lessor is expected to generate more than $200 million of operating earnings when it closes, which KKR expects in the first quarter of 2027.

AI Exposure and Market Outlook

Co-Chief Executive Officer Scott Nuttall said KKR sees artificial intelligence as a significant opportunity but is mindful of the risks. Its seven data center platforms represent 6% of infrastructure assets under management; combined with other relevant investments across the firm, including Global Atlantic, exposure totals 1% to 2% of firmwide assets, he said.

Nuttall said 90% of long-term lease exposure was to governments or investment-grade hyperscalers, while 3% was to neoclouds. He also noted that KKR had sold some AI beneficiaries, including semiconductor equipment business KOKUSAI and cooling company CoolIT, at approximately 20 times and 15 times investors’ cost, respectively.

More broadly, Nuttall argued that KKR’s experience through prior market cycles has helped distinguish its performance. He said investors are concentrating commitments with firms they believe can perform through market uncertainty, while acknowledging that KKR will continue to make mistakes.

About KKR & Co. Inc. (NYSE:KKR)

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