KKR & Co. Inc. (KKR): history, ownership, mission, how it works & makes money

A Brief History of KKR & Co. Inc.

Founded in 1976, KKR & Co. Inc. (KKR) is a global investment firm that manages multiple asset classes, including private equity, energy, infrastructure, real estate, credit, and hedge funds. The firm has evolved significantly over the decades, establishing a robust reputation in the financial industry.

Growth and Expansion

KKR's initial focus was on leveraged buyouts, which allowed the firm to acquire companies using a combination of debt and equity. By the 1980s, KKR gained notoriety for its high-profile buyouts, including the $25 billion acquisition of RJR Nabisco in 1989, which remains one of the largest leveraged buyouts in history.

Public Offering and Strategic Developments

In July 2010, KKR became a publicly traded company, listing on the New York Stock Exchange under the ticker symbol "KKR." This move allowed the firm to enhance its capital-raising capabilities and expand its global footprint.

Financial Performance Metrics (as of June 30, 2024)

As of June 30, 2024, KKR reported significant financial metrics, reflecting its robust performance:

Assets Under Management (AUM)

KKR's AUM has seen significant growth, with the following breakdown as of June 30, 2024:

Investments and Portfolio Performance

KKR continues to diversify its investment portfolio, with notable increases in the value of privately held investments, which include:

• Seiyu Group
• Cloudera, Inc.
• USI, Inc.

As of June 30, 2024, the value of KKR's real estate investment portfolio increased by 3%, while the infrastructure investment portfolio saw an 8% rise during the same period.

Recent Developments

In March 2024, KKR issued $750 million in senior unsecured notes due 2054 with an interest rate of 6.750%. This issuance was part of KKR's strategy to optimize its capital structure and enhance liquidity, reflecting its ongoing commitment to maintaining a strong balance sheet.

Additionally, KKR's strategic holdings segment was established to report its ownership in businesses acquired through its core private equity strategy, further solidifying its position in the market.

Overall, KKR has demonstrated resilience and adaptability in the evolving financial landscape, maintaining a strong financial foundation and robust investment strategy.

A Who Owns KKR & Co. Inc. (KKR)

Ownership Structure

As of June 30, 2024, the ownership structure of KKR & Co. Inc. (KKR) is comprised of common stock and preferred stock, with significant holdings by institutional investors. The total stockholders' equity for KKR is reported at $21,673,103,000.

Major Shareholders

The major shareholders of KKR include institutional investors and company executives. The following table summarizes the ownership percentages of the top institutional shareholders:

Management Ownership

Management, including Co-CEO's and executive officers, holds a significant portion of KKR's equity through various equity-based compensation plans. As of June 30, 2024, management ownership is reported as follows:

Institutional Ownership

Institutional ownership remains a significant aspect of KKR's capital structure. As of June 30, 2024, institutional investors hold approximately 70% of total shares outstanding.

Preferred Stock and Other Securities

KKR has issued Series C Mandatory Convertible Preferred Stock, with a total value of $1,115,792,000 as of June 30, 2024. This preferred stock has specific dividend rights and is convertible into common stock under certain conditions.

Recent Changes in Ownership

In the first half of 2024, KKR experienced fluctuations in ownership due to stock repurchases and the conversion of preferred shares. The total number of common shares outstanding as of June 30, 2024, is approximately 887,394,513.

Conclusion

KKR's ownership structure reflects a diverse mix of institutional and management shareholders, with significant equity held by the founders and executive team. This aligns with KKR's overall strategy for growth and investment across various sectors.

KKR & Co. Inc. (KKR) Mission Statement

Overview

KKR & Co. Inc. is a leading global investment firm that focuses on alternative asset management and capital markets. The company aims to generate attractive investment returns through a disciplined investment approach, employing world-class professionals and supporting growth in its portfolio companies and communities.

Mission Statement

The mission of KKR is to provide innovative investment solutions and capital markets services that enable clients to achieve their financial objectives while fostering a sustainable future through responsible investment practices.

Core Values

• Integrity: Upholding the highest standards of ethical conduct in all business dealings.
• Excellence: Striving for excellence in investment performance and client service.
• Innovation: Embracing innovation to develop new investment strategies and solutions.
• Collaboration: Fostering collaboration among diverse teams to achieve common goals.
• Responsibility: Committing to responsible investing and creating positive societal impact.

Financial Performance and Metrics

As of June 30, 2024, KKR reported total revenues of $4.171 billion, an increase from $3.627 billion in the same period of the previous year. The company's net income attributable to KKR & Co. Inc. was $668 million, compared to $861 million in the second quarter of 2023.

Investment Strategy

KKR employs a multi-faceted investment strategy across a range of asset classes including private equity, credit, and real assets. The firm sponsors investment funds that invest in private equity, credit, and real assets and has strategic partners managing hedge funds.

Recent Developments

In January 2024, KKR completed the acquisition of Global Atlantic for approximately $2.6 billion. This acquisition is expected to enhance KKR's capabilities in the insurance sector and improve its overall financial performance.

Assets Under Management (AUM)

As of June 30, 2024, KKR reported total assets under management (AUM) of approximately $348.5 billion, reflecting the firm's ongoing growth and expansion in various investment sectors.

Dividend Policy

KKR declared a quarterly dividend of $0.175 per share, which will be paid on August 27, 2024, to stockholders of record as of August 12, 2024. The annual aggregate dividend amount is projected to be $0.70 per share, reflecting the company's commitment to returning value to its shareholders.

Conclusion

KKR continues to prioritize its mission of delivering innovative investment solutions while adhering to its core values. The firm's strong financial performance and strategic acquisitions position it well for future growth.

How KKR & Co. Inc. (KKR) Works

Company Overview

As of June 30, 2024, KKR & Co. Inc. operates as a global investment firm with diversified strategies including private equity, energy, infrastructure, real estate, credit, and liquid markets. The firm had total assets under management (AUM) of $601.3 billion, an increase from $552.8 billion at the end of 2023.

Financial Performance

For the second quarter of 2024, KKR reported total revenues of $4.17 billion, up from $3.63 billion in the same period of the previous year. The net income attributable to KKR & Co. Inc. for Q2 2024 was $667.9 million compared to $861.7 million in Q2 2023.

Investment Strategies

KKR employs a variety of investment strategies across several sectors. The firm focuses on:

• Private Equity
• Real Assets
• Credit and Liquid Strategies

As of June 30, 2024, the breakdown of assets under management by investment strategy is as follows:

Capital Management

KKR manages significant capital across its strategies. The firm raised $11.5 billion in new capital during the second quarter of 2024, contributing to its growth in AUM. Uncalled commitments amounted to $107.7 billion, which can be deployed for future investments.

Key Financial Metrics

For the first half of 2024, KKR reported the following key financial metrics:

Operational Highlights

KKR continues to enhance its operational efficiency. The firm reported total expenses of $3.95 billion for Q2 2024, an increase from $3.12 billion in Q2 2023. Compensation and benefits accounted for a significant portion of expenses, totaling $895.2 million for the second quarter of 2024.

Market Position

KKR's competitive position in the market is bolstered by its diversified investment strategies and strong capital base. The firm aims to leverage its extensive network and experience to identify attractive investment opportunities globally.

Investment Income

Investment income for KKR during the second quarter of 2024 included net gains from investment activities amounting to $392.7 million, alongside dividend income of $471.3 million.

Risk Management

KKR emphasizes robust risk management practices to safeguard its investments and ensure long-term value creation. The firm employs various strategies to mitigate market and operational risks associated with its investment portfolio.

Conclusion

As of June 30, 2024, KKR & Co. Inc. remains a leading player in the global investment landscape, demonstrating resilience through a diversified approach and strong financial performance.

How KKR & Co. Inc. (KKR) Makes Money

Revenue Streams

KKR generates revenue through multiple streams, primarily including:

• Management Fees
• Transaction Fees
• Carried Interest
• Investment Income
• Insurance Premiums

Management Fees

For the three months ended June 30, 2024, KKR reported management fees of $470,076,000, compared to $446,809,000 for the same period in 2023, reflecting an increase of $23,267,000. For the six months ended June 30, 2024, management fees totaled $956,830,000, up from $899,902,000 in 2023.

Transaction Fees

Transaction fees for the three months ended June 30, 2024, were $316,457,000, an increase from $269,416,000 in the prior year. For the six months ended June 30, 2024, transaction fees rose to $535,075,000 from $479,255,000 in 2023.

Carried Interest

Carried interest for the three months ended June 30, 2024, was $640,322,000, compared to $540,615,000 in 2023, representing a significant increase. For the six months, carried interest increased to $1,785,250,000 from $883,685,000 in the previous year.

Investment Income

For the three months ended June 30, 2024, KKR's total investment income was $984,624,000, an increase from $946,977,000 in 2023. For the six months ended June 30, 2024, the total investment income was $2,003,881,000 compared to $1,088,013,000 in 2023.

Insurance Premiums

In the insurance segment, KKR reported net premiums of $935,794,000 for the three months ended June 30, 2024, up from $626,429,000 in 2023. For the six months, net premiums reached $6,972,316,000 compared to $1,100,053,000 in the prior year.

Financial Performance Overview

KKR's total revenues for the three months ended June 30, 2024, stood at $4,171,910,000, an increase from $3,626,518,000 in 2023. For the six months ended June 30, 2024, total revenues were $13,828,648,000 compared to $6,754,000,000 in 2023.

Net Income

For the three months ended June 30, 2024, KKR reported net income attributable to KKR & Co. Inc. common stockholders of $667,926,000, down from $844,463,000 in 2023. For the six months, net income attributable to common stockholders was $1,350,140,000, compared to $1,167,207,000 in 2023.

Assets Under Management (AUM)

As of June 30, 2024, KKR's total assets under management were $601,341,000,000, up from $577,633,000,000 in March 2024. Fee-paying assets under management were $487,320,000,000, an increase from $470,603,000,000.

Table of Financial Data

Investment Strategy

KKR's investment strategy focuses on private equity, credit, and real assets, leveraging its extensive network and expertise to generate returns. The firm actively manages investments across various sectors, aiming for long-term growth and value creation.

Conclusion on Financial Metrics

KKR's diversified revenue streams and strategic investment approach position it well for continued growth in the competitive financial landscape.