KKR at Barclays Conference: Strategic Growth and Future Outlook

On Monday, 08 September 2025, KKR & Co (NYSE:KKR) presented at the Barclays 23rd Annual Global Financial Services Conference, offering insights into its strategic positioning and growth trajectory. CFO Rob Lewin emphasized KKR’s strengths in asset management and insurance, while acknowledging challenges such as persistent inflation. The firm showcased its diversified asset management business, approaching $700 billion in assets under management (AUM), and highlighted strategic advantages in the insurance sector.

Key Takeaways

• KKR is nearing $700 billion in AUM, highlighting its diversified asset management business.
• The firm anticipates inflation above the Federal Reserve’s 2% target but expects interest rate cuts in the coming years.
• Significant growth potential is seen in Asia, particularly in Japan and India.
• KKR’s infrastructure and credit businesses have experienced substantial AUM growth.
• The company reaffirmed its medium-term financial targets, including fundraising goals.

Financial Results

KKR reported robust financial performance across its various business segments:

• Asset Management: Approaching $700 billion in AUM.
• Private Equity: Americas 12 fund achieved a gross IRR above 20%. The Americas private equity fund 14 had $16 billion in capital as of June 30, 2023.
• Infrastructure: Approximately $90 billion in AUM, with a diversified core infrastructure strategy accounting for $13 billion.
• Credit: Around $260 billion in AUM, with asset-based finance comprising $75 billion. A $6.5 billion ABF fund was recently closed.
• Capital Markets: Generated $430 million in fee revenue in the first half of the year, with approximately $1 billion in revenue in 2024.
• Wealth Business: Raised nearly $10 billion in capital, with a 50% year-on-year increase in monthly capital raising.

Operational Updates

KKR continues to expand and optimize its operations:

• Private Equity: Focused on disciplined capital deployment and strong capital return metrics.
• Asia Platform: Manages roughly $80 billion in AUM, with infrastructure, real estate, and credit scaling in the Asia-Pacific region.
• Credit: Raising capital for opportunistic credit and direct lending, aiming for a record capital raising year.
• Wealth Business: Two-pronged approach with a case suite of vehicles and partnership with Capital Group.
• Global Atlantic: Concentrating on longer-duration liabilities and increasing exposure to alternatives.

Future Outlook

KKR’s outlook remains positive despite economic challenges:

• Macroeconomic Environment: Anticipates continued inflation above the 2% target and expects several interest rate cuts.
• Private Equity: Projects some general partners will shrink due to high fixed costs.
• Credit: Sees opportunities in shifting allocations from regional banks to alternative asset management.
• Capital Markets: Plans to increase market share in third-party capital markets.
• Wealth Business: Predicts strong adoption in the coming years.

Q&A Highlights

Key insights from the Q&A session include:

• Private Equity: KKR differentiated itself with linear capital deployment, unlike the broader industry’s overdeployment in 2021.
• GP Consolidation: No inorganic consolidation expected, but organic consolidation may occur due to fundraising challenges.
• Asia Opportunities: Significant growth potential in Japan and India, driven by economic factors and a rising middle class.
• Infrastructure: Driven by total addressable market and limited partner appetite.
• Global Atlantic’s Profitability: Operating earnings expected to remain stable in the near term.

Readers are encouraged to refer to the full transcript for a detailed account of the conference call.

Full transcript - Barclays 23rd Annual Global Financial Services Conference:

Ben Budish, Analyst, Barclays: Good afternoon, everyone. Thanks for joining us for this next session. I’m Ben Budish. I cover the U.S. brokers, asset managers, and exchanges here at Barclays. For this next chat from KKR, we’ve got CFO Rob Lewin. Rob, thanks so much for being here.

Rob Lewin, CFO, KKR: Ben, thanks for having me and having the team. Great turnout today.

Ben Budish, Analyst, Barclays: Before we dive into the details of some of the various parts of KKR, can you maybe level set for the group here? What are some of your key focuses for the firm? How is KKR, how do you view the company as different from some of your peers?

Rob Lewin, CFO, KKR: Sure. We’ve spent much of the past couple of decades really building out a business model very much on purpose that accentuates our core capabilities and our strengths. That’s investing acumen at the top of the list, capital allocation, access to differentiated forms of culture, and then probably most importantly is the collaborative culture that we’ve created across the entire firm. We still pay everybody at KKR off of one compensation P&L. If you look at our asset management business, now approaching $700 billion of assets under management, a 49-year track record, much of those core capabilities have been built up inside of our asset management franchise. We have no aspiration to be all things to all people in asset management. It’s about taking those core capabilities and extending them to other parts of our firm. It’s why we have an insurance business. It’s why we have strategic holdings.

As you think about our insurance footprint, Global Atlantic, we think best in class in sourcing long-dated and predictable liabilities with a risk management overlay. From KKR’s perspective, I think it’s well understood that when you’re sourcing liabilities, a great synergy is our investment platform. I would take our global investment platform against anybody’s out there. I think there’s a number of other synergies where we’re able to really leverage those core capabilities. I think the one that’s maybe as impactful but less well understood is our access to distribution. Our IV funds and our recent strategic partnership upsize with Japan Post really both third-party capital that pays asset management economics to Global Atlantic and really invests up and down the assets and liabilities of Global Atlantic. We are accessing through our global distribution team in our asset management business those same investors to invest in an insurance asset class.

IV plus Japan Post, that latest iteration of funds is already north of two times where we were in IV2. There’s additional synergy with our capital markets business, our geographic breadth. I’ll come to that maybe a little bit later on in this discussion. Finally, strategic holdings. As we think about strategic holdings, it’s an unconstrained addressable market. It’s an area where we are leveraging our global private equity footprint. We think we are the best private equity investor globally, sourcing investments, building companies. I would say our clients, our limited partners back that up in that we’ve got the most significant amount of AUM in direct private equity relative to any of our peers. An unconstrained addressable market in an area where we’ve got a real right to win organizationally, that’s why we have strategic holdings as a part of our business plan.

It is on top of everything that we are doing in asset management insurance. The best part about this business model is, you know, we don’t believe that in order to achieve long-term and perpetual growth, that we need to add meaningfully to our number of people or the operating complexity inside of our business. Importantly, not only does it accentuate that core capability around our culture, it allows us to retain it. That’s why we’re most excited about our business model. Of course, we think there’s a lot of growth in what we’re doing over the next three to five years. Just as importantly, more importantly, as we think about the next 10 or 15 years, we think we’ve got the business model that sets us up really well to go out and execute against.

Ben Budish, Analyst, Barclays: Okay, great. Maybe turning to a more zoomed-out macro question, talk a bit about what you’re seeing most recently in terms of realizations and transaction activity. Does it look like 2026 could be the year we’ve been waiting for? What are the key factors? What’s the house view on rates and inflation? How are you thinking about all that?

Rob Lewin, CFO, KKR: Sure. I think the global macro backdrop is one that is clearly very constructive right now. You know, global equity markets are close to all-time highs. Fixed income spreads are really tight. Volatility indices remain at relatively low levels now for a multi-month period of time. A forward-looking metric I look at a lot is CLO formation, which has shrunk. You’re starting to see naturally a buildup in the IPO calendar. You’re seeing increased levels of secondaries, and you’re seeing growing pipelines across sponsor-backed exits. I was actually having breakfast earlier this morning with a Senior Member of our sponsor coverage team. This covers both sponsor clients from our private credit as well as capital markets businesses. They’re starting to see growing pipelines that are consistent with that. We’ll see what happens over the next few months. We’re pretty constructive looking into 2026 right now, Ben.

You have those views on inflation and interest rates. Consistent with some of our past commentary here, organizationally, we expect inflation to continue to persist north of that 2% Fed target level. At the same time, we do expect two interest rate cuts this year, three next year. Given some of the recent employment data, probably bias there is for increased cuts over time. Not a market shift in how we’re thinking about some of those core macro drivers.

Ben Budish, Analyst, Barclays: Got it. Why don’t we come back to private equity? In your opening remarks, you sounded quite confident on KKR’s franchise there. How would you describe current LP attitudes towards traditional PE? It seems like the whole industry for a few years has been struggling to raise and realize. Can KKR be an exception? I’m also curious, we’ve heard a lot of trends about anecdote, things like GP consolidation. Anything you can share, any anecdotes that might, things you might be observing on that kind of theme?

Rob Lewin, CFO, KKR: Sure. I think it is fair to say that our industry has struggled at returning capital to our collective clients over the past couple of years. I think one of the largest drivers around that is a level of overdeployment that our industry had in 2021 and 2022, early 2022, when multiples were quite high. It hasn’t allowed for some of those near-term exits that our industry has gotten used to. I think one of the differentiators of KKR, and you look at our private equity franchise, what’s different about us is we’ve had a real focus on linear deployment of capital really since the financial crisis 15 years ago. Relative to our industry, we well outdeployed our industry in 2020. We underdeployed against the industry in 2021. Actually, our private equity deployment, global private equity deployment in 2020 and 2021 were roughly equivalent to each other.

I bet if you look at most industry participants, you would see a big multiple in 2021 and early 2022 deployment relative to 2020. That’s not the case with us. I think that’s one of the big reasons why we’ve outperformed from a returns perspective. Importantly, we’ve outperformed from a capital return and DPI perspective. You look at our Americas private equity franchise, over the past eight years, we have distributed twice as much capital as we’ve called. In each of those eight years, we have returned at least as much capital as we’ve called in any given year. Given that that’s been a growing business for us, I think that further highlights the point. You see our Americas 12 fund, our most mature recent fund, has a gross IRR of north of 20% today, attractive DPI metrics.

I think that’s all translated to the fundraising success that you’re seeing across our private equity franchise. Our most recent Americas private equity fund, 14, currently at $16 billion of capital as of June 30, 2023. Our last fund was roughly $18 billion, so a lot of good momentum there. I think that capital raising has really underpinned some of the successes we’ve had in capital raising across all of KKR over the past couple of years. Lastly, Ben, you had asked on GP consolidation. I’m personally not a big proponent of GP consolidation or think you’re going to see a ton of GP consolidation, at least on the inorganic side. From KKR’s perspective, we have a really high bar in how we think about inorganic growth in the asset management space.

You know, from our perspective, we really look for businesses that have differentiated forms of capital, capital that might elongate our capital base, certainly diversify it, capabilities that can source across our platform, including Global Atlantic, including K-Series. I don’t expect a lot of GP consolidation in the inorganic sense. That said, I do think in this next wave of capital return to clients and capital raising, you’re going to see a number of GPs that are going to shrink in size and some materially so. Given that they’ve got relatively high fixed base cost basis, you could see some of those firms go away altogether. I think organically, you’re going to see a fair bit of GP consolidation over the next five years. That should inure to the bigger players and certainly the players who’ve been able to deliver on behalf of their clients. We feel well positioned there.

Ben Budish, Analyst, Barclays: Sticking on the PE side, can you maybe talk about deployment opportunities? Where are you seeing the most interesting opportunities to deploy in traditional private equity these days?

Rob Lewin, CFO, KKR: We’ve had a healthy amount of deployment over the past 12 months in global private equity across everything we do, roughly $16 billion of capital. We’ve been particularly active internationally outside of the U.S. As a reminder, roughly 50% of our investment professionals sit outside of the U.S. We’ve been quite constructive in Europe over the past 12 months. Pockets of areas in Asia we’ve really leaned into. The two I’d highlight are Japan and India for very different reasons. Of course, Japan is coming out of a multi-decade deflationary environment. I think we’re really well positioned on the ground there. In India, we’re a big believer in the multi-decade growth that the economy will benefit from, from a rising middle class. No doubt you’ll have a lot of volatility over that period of time, but we think that volatility can create some interesting investment opportunities for us.

Ben Budish, Analyst, Barclays: Great. You kind of answered my next question on the opportunities in Asia. Is there anything else to add? That was going to be the next one.

Rob Lewin, CFO, KKR: I think it’s, if it’s okay, Ben, I think spending a bit of time on our Asia platform is worthwhile.

Ben Budish, Analyst, Barclays: Please do.

Rob Lewin, CFO, KKR: You know, today in Asia, we have roughly $80 billion of assets under management, and we are the leading alt player by some margin in that part of the world. Five, six years ago, that number was closer to $20 billion, and of that $20 billion, 90% was private equity. Of our $80 billion of capital today, less than 50% comes from private equity. While our private equity business has doubled over that time period, our business in Asia-Pacific has diversified quite a bit as we scaled infrastructure, real estate, and credit. We’ve been on the ground there since 2005. We’ve got very large, deep, and local teams across eight geographies in Asia-Pacific. As we think about that opportunity over the next decade, we believe more than half of global GDP growth is going to come from that part of the world.

Secularly, adoption to alternatives is still well behind in Asia versus Western markets, and we can see some shift change there as well. Our market position in that part of the world, I think, really does differentiate us. There are some real barriers to entry from what we’ve built up over the past approximately 20 years.

Ben Budish, Analyst, Barclays: Great. Maybe now switching gears to infrastructure real quick. That is your other significant flagship fund in the market. Maybe talk about how LPs are currently thinking about allocations to this asset class. What might that mean for the ultimate level of fundraising for the fund in the market? How do kind of deployment opportunities play into this? Does that sort of expand the TAM or the appetite from LPs even further?

Rob Lewin, CFO, KKR: Yeah, I think it for sure does. You look at our infrastructure business, zooming out for a second, roughly $90 billion of AUM. I’m going to do another comparison relative to where that was. Five years ago, that business was $15 billion of AUM, $15 to $90 billion, you know, all organic. Five, six years ago, we had, I think, a great team built out in infrastructure, still more of maybe an upstart competitor in a lot of ways. Today, you look at our global infrastructure franchise, I think we’re regarded fairly so as amongst the real leaders in infrastructure investing globally. You mentioned our flagship capital raise where there’s really good momentum. It’s more than just that, our diversified core infrastructure strategy, now roughly $13 billion of AUM. We’ve got quite a bit of momentum in our K-Series vehicles that are infrastructure related.

Our Asia infrastructure business I referenced just a minute ago on its third capital raise for that strategy. It’s an area, and we’ve talked about this in the past, given the amount of infrastructure investment that’s required in that part of the world and our leading franchise in Asia infrastructure investing, you know, we’ve got quite a bit of optimism about what that business can be both from a client interaction perspective at KKR and then what it can mean for our shareholders. You mentioned these flagship capital raises and the word flagship gets thrown around quite a bit. We’ve said our job is to really proliferate the number of funds we have at KKR that are quote unquote flagships. I think Asia infrastructure, you know, soon can be in that category.

Ben Budish, Analyst, Barclays: Right. Maybe moving over to credit now. You recently closed on a $6.5 billion ABF fund, which is your largest in credit. Where do you see the next leg of near-term growth in the broader credit business coming from? Is it scaling this franchise? You’ve got a non-traded BDC in the market. How do you think about that growth vector?

Rob Lewin, CFO, KKR: Our credit business is roughly $260 billion of AUM today. It’s our largest business by AUM. ABF, the asset-based finance part of that business, is roughly $75 billion. Our asset-based finance business operates today in an addressable market that we think is plus or minus $5 trillion in size, growing to $8 to $9 trillion over time. Much of the addressable market still today sits on regional bank balance sheets. A big opportunity, I think, for our industry from a share perspective is shifting allocation of dollars from regional bank balance sheets over time to the alternative asset management space. I think the biggest reason for that shift that you’ll see, and this is not all going to happen at once, of course, is that our industry has a core competency in creating long-dated liabilities, whether that’s long-dated fund structures, permanent capital vehicles like BDCs, long-dated insurance liabilities.

Much like you would have seen in direct lending over the past 10 years, it’s that duration of capital that’s a real competitive advantage, especially when much of the capital you’re competing against is really coming from on-demand liabilities in bank deposits. Over time, I think there’s a real opportunity for our industry to take increased share. I think given our leading platform today, our 18 origination platforms that we benefit from across the globe, we’re really well situated from an industry perspective to participate in that share growth. That would be one that I would highlight. We are raising capital today around opportunistic credit, direct lending, junior capital opportunities, related credit investing down the capital structure. This year shaping up, you know, either close to a record capital raising year for us in credit or will be a record capital raising year for us in credit.

A lot of momentum in this part of our business, both from a returns perspective and then capital formation on top of that.

Ben Budish, Analyst, Barclays: Great. All right, we touched on a bunch of the different segments of your asset management business. Maybe thinking more broadly about deployment, the tactical timing of the back half of the year, how are things shaking as we’re going into the next couple of quarters? Curious about your capital markets fees. I think on your last update on your earnings call, you said the back half should look flattish with upside from constructive markets. How are things trending so far? Is there any update you can share there?

Rob Lewin, CFO, KKR: If you look at the first half in capital markets, we generated $430 million fee revenue. I think there’s some interesting stats that are worth sharing on that $430 million. Just under 30% of that revenue, respectively, came from each of our private equity and infrastructure businesses. On top of that, an additional 20% came from our third-party capital markets business. Pretty well diversified from an origination perspective. I think that’s part of the reason why you zoom out our capital markets business, why we have, I would say, increased the floor in what that business is able to generate. If you look at 2022 and 2023, for much of those two years, the equity and debt capital markets were largely closed. Our capital markets business generated plus or minus $600 million of revenue in each of those two years.

It wasn’t that long ago, Ben, you’ve known us for a while, where in a really good year, we were generating $600 million of fees in that business. Fast forward to 2024, the markets were more open and our business really did capitalize on that, generating approximately $1 billion of revenue. I think we’ve shown we were able to protect the P&L in down markets and be able to capitalize in up markets. When I look at 2025, I don’t think we’re going to quite get to 2024 levels from a revenue perspective, but we continue to be quite constructive on this business. Importantly, we really think we can grow this business over the next three to five years. As KKR does more around the world, our capital markets business is poised to capitalize on that.

I believe there’s an opportunity for us to take increased share in our third-party capital markets business, where we’ve got, I believe, a really differentiated model and offering to the market. We’ve talked about in some of these settings before the opportunity and the synergy between Global Atlantic and our capital markets business, where we’re just getting going on that. I’ve talked about the opportunity here being in the hundreds of millions of dollars from a fee perspective. It’s a lot of opportunity for us to continue to grow this franchise over time. By nature, you know, it will have some lumpiness to it. Really, as we evaluate performance, it’s over that multi-year period of time. As we look back over the past three, three and a half years, we’re quite proud of what we’ve been able to generate given the different market cycles that that business has faced.

Ben Budish, Analyst, Barclays: Great. Maybe moving on to your wealth business. Maybe just to start, can you give us a little bit of an overview of the current product suite? You know, where are you focused on building out distribution? Where’s the room for additional product innovations?

Rob Lewin, CFO, KKR: Yeah. There are really two parts of our wealth franchise today, or wealth franchise that I think you’re referring to. There is our case suite of vehicles and products, where today I would say there’s a predominant focus on the accredited investor on up. We’ve got large vehicles and products and companies up and running across our four major investing verticals. It’s private equity, infrastructure, real estate, and credit. In fact, in credit, we’ve got two separate vehicles. We have a non-traded BDC, and we’re in the process of converting an opportunities fund into an asset-based finance product that we’re quite excited about, given some of the secular dynamics that I referenced a few minutes ago. Quite a bit of momentum in case suite so far. We’re tracking ahead of what our expectations have been for this part of our business.

As of September 1 closing, eight months into the year, we’ve generated just about $10 billion of capital raised. That’s right around $1.25 billion per month across our case suite. If you look back at the first eight months of 2024, that number was closer to $800 million a month, a 50+% increase in capital raising year on year. We continue to believe that this channel will have real adoption over the next several years. While our focus isn’t month to month or year to year capital raising in this business, it really is not. We are pleased by the receptivity.

So far, we’ve been able to deliver from a returns perspective to this new client base and think that the opportunity over the next five, seven, ten years is one where we can really differentiate ourselves, further differentiate ourselves on the performance side, and build a business here that we’re really proud of.

Ben Budish, Analyst, Barclays: Sorry.

Rob Lewin, CFO, KKR: That was the first part of our wealth business. I’d be remiss if I didn’t talk about the second part of our wealth business that we’re building out, which is really our partnership with Capital Group, where we are exclusive partners to each other on building private and public hybrid solutions for clients and benefit from Capital Group’s really leading position around distribution through to the financial advisor community. We today have two products on offer in the credit space. We have a public-private equity hybrid product that is currently under registration and have talked about potentially creating a real assets product over time as well. We are in the earliest days of that partnership, but we think that that can be an additional addressable market that today KKR really doesn’t attract and doing so with a really first-class partner in Capital Group.

Ben Budish, Analyst, Barclays: Maybe one final question on the retail side. One of the questions we get asked quite often is, you know, how do you manage the conflict between retail fundraising, which needs to be invested immediately and is earning fees immediately, versus institutional capital, which can be patient but doesn’t always generate fees right away? How do you think about managing those two sides and that sort of inherent conflict at times?

Rob Lewin, CFO, KKR: Yeah, I’m really glad you asked this question. We spent a lot of time on product construction here. I would say if you look at our private equity and our infrastructure vehicles, we spent over two years with those products in the lab. One of the really important things for us from the earliest of days was to make sure that our institutional vehicles and our wealth vehicles were really investing in the same deals. What we didn’t want to have happen, and we structured accordingly, was for one investor group to be well overweighted in a transaction versus the other. Unlike what some of our peers have structured that relies more on greenfield investing, relies on large co-investing, we’re investing largely pari passu between institutional and retail and wealth. I think that that’s a really important differentiator.

I think that really, as we think about some of the reputational risks in this space, as we think about managing conflicts, how we’ve structured these vehicles, these funds is really important to keep in mind as you think about the question that you asked. That’s one that we spent organizationally a really long time talking about and focused on making sure we can come up with as best a structure we can to mitigate that risk that you highlighted.

Ben Budish, Analyst, Barclays: Got it. Okay, maybe moving into Global Atlantic.

Rob Lewin, CFO, KKR: Yeah.

Ben Budish, Analyst, Barclays: You’ve owned 100% of that business for a few years now. Maybe just to start, can you talk about the changes you’ve made since you’ve owned the entirety of the business, how things have evolved in the last few years or so?

Rob Lewin, CFO, KKR: Yes. When you have roughly 40% of the business owned by co-investors, a really important quarter-to-quarter measure of performance is book value. I believe book value and book value per share in the insurance business over a multi-year period of time is a really important metric. Quarter-to-quarter, given what could move around on an insurance company balance sheet, it is a less relevant metric. We have refocused how we think about the business and driving profitability. What have we done? Number one, we really turned on the full KKR organization for the opportunity at Global Atlantic. As I said, Global Atlantic is great at sourcing long-dated predictable liabilities, with great risk management overlay to that. One area where we’ve changed approach is that we are now focused on longer duration liabilities and in turn increasing our exposure to alternatives on the asset side of the balance sheet.

Interestingly, and I think this surprised a lot of people when they hear it for the first time, about a year ago, Global Atlantic had zero private equity allocation on its balance sheets. If you look at the vast majority of insurance companies in the world, mutuals, many of which are KKR private equity clients, but Global Atlantic was not. Today we have roughly 1% allocation to alternatives. The industry average is closer to 5% to 8%. You should expect us, as we elongate our liabilities, to shift our asset exposure up closer to industry average. Some of the changes we’ve made: today the co-CIOs of Global Atlantic Balance Sheet are longtime KKR partners, really enabling us to be able to get the most out of our investing platform. We’ve fully turned on, as I talked about, distribution for third-party capital.

When you own 63% of the profitability of a business, it’s really hard to fully turn on a 100% organizational cost, which is our distribution. Now that we own 100% of Global Atlantic, there really isn’t anything to think about. We fully turned on distribution. That’s another change. You’ve seen that play through as it relates to the momentum we have on our capital raising effort. Those would be some of the changes that you would have seen since 100% ownership. We feel really good about the trajectory of the business and importantly how we’re setting ourselves up over the course of the next several years to be a real leading player in what we believe to be a growing marketplace over that period of time.

Ben Budish, Analyst, Barclays: Maybe can you talk about what you’re seeing currently? How would you describe the current environment for retail annuities? We’ve heard from some of your competitors about increasing competition, narrowing market-wide spreads, weighing on yields. What are you seeing from your look?

Rob Lewin, CFO, KKR: I don’t think it’s a surprise in this kind of a market environment that you’re seeing increased levels of competition. It’s part of the reason, not the most significant reason, but it’s part of the reason why we’re focused on more long-duration liabilities. On the margin, we see less competition now than we do in some of the short-dated liabilities. From our perspective, it’s not, you know, we don’t just look at one period of time. Today we still operate at a level where we’re able to achieve our cost of capital hurdles for that business, even with that intensified competition, even with where fixed income spreads are. Sure, as we’re sitting here, there will be moments in time, you know, in the insurance business when volatility levels are up. In turn, insurance companies are going to want to deploy less capital in those kinds of environments.

There will be less competition on the liability side, which is at the very same period of time where definitionally spreads on the asset side are increasing. How have we set ourselves up? Third-party capital is going to be a big part of our model in that kind of environment. Just like in a private equity context where we could draw down a private equity fund to be able to invest into dislocation, we have the ability to draw down our third-party capital, our IV funds, as an example, to be able to invest into dislocation. The other competitive advantage that KKR would have, I think, relative to the industry in that kind of environment, is we have free cash flow at KKR that sits outside of our insurance business.

If the market opportunity is so meaningful, we’ve got the ability to redirect capital to be able to capitalize on that market opportunity. I think unlike what most insurance companies will be able to do at that point in time. As we evaluate how we’ve situated ourselves in our insurance business, it’s very much how do we think we’re going to perform through a cycle. You’ve highlighted that we’re at a point in the cycle today where there’s more competition on the liability side and on the asset side, there’s a lot more competition too, broadly speaking, given where spreads are.

Ben Budish, Analyst, Barclays: Maybe putting that all together just from a P&L perspective. I think your current guidance calls for a continued kind of flattish near-term outlook for insurance operating earnings despite ongoing growth in the asset base.

How should investors think about the cadence, the timing of the inflection here? Given your plans to elongate the liability profile, what should we expect in terms of when you might get back to like a mid-teens reported pre-tax ROE?

Rob Lewin, CFO, KKR: What we’ve said, to be clear, is we think that, or believe for the next handful of quarters, that we would expect operating earnings to be flattish, plus or minus, in the business. I think there’s a couple of reasons for that. Number one, and I think the largest driver here, is as we think about increasing our alternatives portfolio, we cash account for that alternatives portfolio. A lot of the market participants, I think it’s worth noting, mark to market. I’m not saying there’s a right or wrong answer, but for us, we believe cash accounting is the right answer and consistent with how we think about A&I across all of KKR. As we’re ramping our alternatives portfolio, much of what we’re doing in alternatives, actually from a P&L perspective today, loses money because the ongoing yield is less than the cost of liabilities that we’re writing.

The bet we’re making, and one that we’re really confident in executing in, is that we are creating a lot of embedded profitability through accrued gains in our alternatives book that will materialize over time. A fair bit of what’s going on here is more accounting in nature. I think it would look different if we marked to market versus cash accounting, as an example. Our belief, and I think if you followed us for a long period of time, you would know that we are always going to choose long-term outcomes relative to short-term outcomes. I’d say there’s nothing different here than as we think about insurance. Maybe the last point here is as we’re talking about profitability and what we generate in insurance is obviously material and meaningful to KKR as a firm.

I was sitting down with Craig and his team on our IRR side last week, and it’s worth noting that even with that flattish expectation in insurance, our 2026 consensus growth numbers are industry-leading across our peer sets. It’s a piece of the earnings equation, but one piece of our earnings equation as opposed to the predominant one.

Ben Budish, Analyst, Barclays: All right, I have two final questions. I want to make sure we get to them both, so I’ll ask them both here. First, in addition to Global Atlantic, you know, strategic holdings is the other sort of newest line item at KKR. You talked about this at your last Investor Day, being the sort of solution to solving the longer-term problem of compounding in financial services. Maybe can you give us an update here, talk about your current level of conviction. The final question, I just want to make sure I get it as well, but just putting it all together, you know, there’s a number of sort of medium-term targets you’ve laid out, fundraising from 2024 to 2026, 2026 FRE and DE per share. You know, how are you feeling at the moment about those targets?

Rob Lewin, CFO, KKR: Great. I’ll start on your first question. What we’re building out in strategic holdings is really on top of everything we’re doing in asset management insurance that we talked about. It really leverages that core capability around capital allocation, around investing acumen, building businesses, our collaborative culture. Today in strategic holdings, we own roughly a 20% direct stake in just under 20 businesses. In aggregate, those businesses on our 20% ownership stake drive approximately $4.1 billion of revenue and $1 billion of EBITDA, so quite sizable in its own right. What we’ve articulated to our investors is we believe that strategic holdings will generate cash operating earnings north of $350 million next year, growing to $1.1 billion plus by 2030. We’re well on our way to being able to accomplish that. We’ve got a lot of confidence in what we’re building.

Importantly, there are no people that sit in our strategic holdings segment, so it’s very culturally friendly to what we’re building across the organization. It should add to our broader operating leverage as well. We’re really excited about what this means as an additional growth factor to the firm. One of the questions I get often, actually a little less often these days, is does strategic holdings add increased risk to your firm? My response to that is I think it’s just the opposite. If we’re able to achieve $1.1 billion plus of operating earnings by 2030, and we’ve got a lot of conviction as a management team that we’re going to be able to do that, at the extreme, if everybody left KKR on January 1, 2031, we’d still have that $1.1 billion of operating earnings. I don’t think you can say that across any of our peers.

From our standpoint, it’s both a real growth factor and something that reduces risk in our franchise as opposed to adding to risk. I think sometimes people conflate financial services and capital allocation to one that can add risk. We think it’s quite the opposite. Ben, your last question as it relates to some of our guidance, we’ve got a lot of momentum on the capital raising side. $110 billion of capital raised in the last 12 months, $220 billion in the last two years. We feel really well situated across our target of $300 billion plus of capital raising from 2024 through to 2026. We had put out some targets as it relates to FRE and A&I per share, $4.50 plus per share, $7 to $8 of A&I.

On our last earnings call, we had reaffirmed the guidance for both of those measures and have consistent feedback as it relates to our confidence in continuing to be able to achieve those numbers today.

Ben Budish, Analyst, Barclays: Great. We’re just about out of time, but Rob, thank you so much. What a pleasure to have you.

Rob Lewin, CFO, KKR: Great. Thank you all. Thank you, Ben.

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