KKR & Co. Inc. ($KKR)

Thanks for joining us today. Really excited to be hosting Rob Lewin, CFO of KKR. KKR is one of the world's largest alternative asset managers. They've got about $744 billion of AUM as of December 31, 2025. And that's spread across private equity, real estate, infrastructure, private credit and liquid strategies. So Rob, welcome.

Bart, thanks for having us this morning. And thanks, everyone in the audience for your interest today.

Super. Maybe we can start just with an intro in terms of providing a high-level overview of KKR and maybe more importantly, like what are your strategic priorities as you're focused on in 2026?

Sure. So our business model and strategy is largely set today. Our Asset Management business plus our Insurance business plus Strategic Holdings, we think, is the winning business model. And so as we look to 2026, 2026 is very much an execution year for us. And so, Bart, you asked about our priorities. Always at the top of the list is going to be generating exceptional investment performance on behalf of our clients and our policyholders. Private wealth remains a really big strategic priority for us, and prudently building our private wealth platforms with vehicles and products that we feel we can be really proud of 10-plus years from now. We -- and I'm sure we'll discuss this as part of this discussion -- we recently announced the acquisition of Arctos. Big priority is making sure that, that gets integrated well into our firm. And that we're benefiting day 1 from our respective ecosystems, we thought there's a lot of synergy there. On the Insurance side of our business, it's really about marrying our competitive advantage in sourcing and origination with our competitive advantage in raising third-party capital. Those two things, we think, in combination with GA's platform will continue to allow us to build a really differentiated Insurance business over the course of the next decade. And then Strategic Holdings, again, leveraging our global sourcing and origination platform on the private equity side to add to a part of our business that is in addition to everything we're doing in Asset Management and Insurance. And then the final priority is the most important one, Bart, and that's continuing to invest in our people and our platform. KKR will celebrate its 50-year anniversary on May 1. And in a lot of ways, I think our culture is similar today to when Henry, George and Jerry Kohlberg set up KKR in 1976. And our job is really to continue to protect and grow that culture over the next 50 years. And we take that responsibility really seriously.

Thanks for that overview. Very helpful. And it's actually a good segue into what I want to touch on in terms of that culture. You've been with the firm now for 20 years. You mentioned you're celebrating -- KKR is celebrating its 50th anniversary this year. So walk us through what differentiates KKR's culture and what makes it unique.

Yes. So I've had a really fortunate run at KKR over the past couple of decades. I've gotten to work in different businesses, different geographies. I've gotten to oversee some different functions at KKR, inclusive of being CFO for the last 6 years. So I do have, I think, a pretty interesting purview around this question. I think if you looked at KKR's senior leadership team, many of them are going to look like me in the sense that they've been at KKR for a long period of time and they've also worked across different businesses and geographies. And I think the commonality amongst all of us and the reason why we've decided to make our careers with KKR is because we really like winning together as part of a team. We trust each other, we root for each other. And I can't speak for other organizations, but it's a big reason why we've all decided to make our careers at the firm. More tangibly, as it relates to what is unique about KKR, we still operate KKR with 1 P&L across the firm. And what that means is that everybody gets paid off of compensation P&L. Anybody who gets carried interest at the firm shares in global carried interest. So if you work in our Asia credit business, you're going to have carry in our U.S. private equity business and vice versa. We think all of that really incents collaboration, incents teamwork, makes mobility across the firm much easier, and at the end of the day, we think is a big contributor to generating alpha on behalf of our clients. So when you think about KKR, we believe of lessons learned travel, best ideas travel in a way that is really unique and in a way that drives differentiated investment performance, and I think you've been able to see that in our results over the last number of years. And I do want to tie in, just quickly, Bart, that point with our business model. That is the reason why we have the business model that we do. It is so that we can grow KKR without feeling like we need to add very significant additional headcount, resources or operating complexity. We want to keep our collaborative culture intact, and we want to keep the place small. That's why we've chosen the business model that we have.

Thanks for unpacking that. I think it's very powerful. And one item I want to just dive into a little bit more on that front is you've got an employee ownership program that you created within portfolio companies, and it's a differentiator. Maybe walk us through that and how it's leading to an advantage for the business.

Yes. Maybe I'll start with some background for those in the audience who aren't familiar, what we've done. But about 15 years ago, a partner of mine, Pete Stavros, he currently co-heads our global private equity business. At the time, he ran our U.S. industrials platform. He started experimenting in industrials businesses. So big employee base that are nonmanagement-oriented and providing broad-based equity ownership in those businesses. And it wasn't just about providing equity, but it's really about creating an ownership mentality. And what you saw from a results perspective was quite staggering. You saw engagement scores go way up. Importantly, quit rates went way down in these industrial businesses, safety incidents went way down, working capital efficiency up. And ultimately, you saw big flow-through to margin expansion in those businesses. So fast forward today, we've started to roll this out broadly across our portfolio, and today, have 85 businesses across the world that have a broad-based ownership program in place. And of those 85 businesses or if you look at those 85 businesses, we have given out billions of dollars of equity to almost 200,000 nonmanagement employees. And in terms of the ones that we've exited and how they've performed, just to give a few stats here, 13 of those 85 businesses have had an exit. And we have, as part of those exits, distributed $1.7 billion of equity value to 30,000 nonmanagement employees. And so I really do feel like we've created a win-win where we've created a structure that as a fiduciary to our clients is driving more equity value to them in spite of increased dilution. And it is also providing an upside equity opportunity to a population of an employee base that generally has not been able to participate in that equity. And of those 13 businesses, I think these stats are really interesting. If you look relative to similar vintage exits across all of KKR, we've generated a 50% better return in those 13 exits. And of those 13 exits, they have roughly doubled their EBITDA over our whole period. So it's something we believe really strongly and across our platform. We think it is a differentiator for us. It, in part, explains why we've generated the investment performance we have for our clients. And it's something as part of our culture, we're really proud of, too.

Great. Thanks for unpacking that for us. Maybe we can zoom out a little bit now and talk about macro and lots of volatility, geopolitical, AI software-related concerns. How do you think about the macro and that dynamic impacting capital deployment and monetizations? And you've got a globally diversified business model. How does that help mitigate some potential impacts?

Yes. So if -- obviously, we're at a moment in time on the geopolitics side that's quite turbulent. We've had some volatility on the public policy side, tariffs over the past 11 months. So far, those things have not materially bled into the macro. Capital markets continue to remain fairly robust across the world, but we're watching it closely. And so we have not seen a material slowdown across those core operating metrics that you mentioned. The monetization side, we have a couple of examples already in the year of some very healthy exits. In early January, we announced the sale of a great software business called OneStream for 4.5x our money. Just last week, we did a secondary offering in a health care business in our U.S. private equity portfolio at approximately 5x our money. We had some peers last week do a very big exit as well. So the monetization environment today largely feels okay. On the capital deployed side, again, we're seeing opportunities across the world. I think we're advantaged in the sense that we do have a really global footprint. Over half of our investment professionals sit outside of the U.S. How that's translating to our Capital Markets business, as an example. I'd expect our revenue in Q1 -- and again, still coming together, we're not through the quarter -- but to be largely in line with what we did last quarter, be largely in line with where we were in Q1 of 2025 in that $200 million to $225 million range. And so I'd say the capital markets are holding in there. But undoubtedly, volatility is up. And if we do spill over into the macro, we talk a lot about how are we positioned as a firm to be able to come out of that in a place that is much stronger. So if we do go through a very volatile time in the macro, can that impact near-term earnings? Yes, but our job is to make sure that our medium and longer-term earnings are better as a result. We have almost $120 billion of dry powder to be able to invest into that dislocation. That's almost a record number for us. I think a lot about how we're positioned in our insurance franchise. When you think about that type of an environment, spreads are going to likely blow out. So the left-hand side of the balance sheet in our Insurance business becomes cheaper. At the same time, you probably have less competition on the right-hand side of your balance sheet for liabilities. And so our job is to make sure that we can really benefit from that type of environment on behalf of our policyholders and shareholders. And I think third-party capital is a big part of that story. So of $120 billion of dry powder, $6.5 billion of dry powder sits against our Insurance business that we can draw down just like a private equity fund to be able to invest into dislocation. Fully deployed, we think that $6.5 billion translates to over $65 billion of fee-paying assets under management. I just want to put that number in perspective relative to the $744 billion of total AUM that we have as a firm today.

That's great, and lots of buffers there and resilience. And maybe we can dive into one other topic in terms of private credit, lots of headlines out there. Could you maybe unpack the private credit AUM within KKR and the risks or opportunities you're seeing in the portfolio?

Yes. Obviously, a lot of headlines on private credit. And so I will do my best to be very fact-based as we go through this. But I think it's important to start with context. The global credit space today is roughly $45 trillion. And the headlines around private credit largely relate to direct lending. Direct lending market is $1.7 trillion, so only 4% of the global addressable credit market. Inside of KKR, as we define private credit, it is roughly $135 billion of AUM. But importantly, $85 billion of that $135 billion comes from our fast-growing and differentiated platform and asset-based finance. Approximately $40 billion of our $135 billion is direct lending, the aspect of the credit markets that's getting a lot of headlines. And as you break down that $40 billion either -- even further, most of that direct lending capital sits in institutional funds that we have, SMAs that we have, all performing, we think, really well and ahead of industry benchmarks. The minority of our capital, roughly $17 billion of direct lending sits in BDC format, again, where a lot of the headlines are. $14 billion of the $17 billion sits in a public BDC. That public BDC has had pressure on returns over the near term, largely from some subordinated exposure. And we have $3 billion of capital in private perpetual BDCs, think private wealth BDCs, that's where a lot of the headlines are. So in fact, we don't have much capital in that private BDC space, and we think can be a real opportunity for us here where a lot of our peers have a lot more concentration in the private BDC space that can come under pressure for us to be able to come out of this period of time potentially taking share. And so we spend, I think, a lot of time at the headline level, but in the reality as you unpack it and you look at our private credit business, we think our asset-based finance business is a leader in the space. There's a lot of tailwinds secularly with asset-based finance that we think we will benefit from, given our leadership position. Direct lending today for us is a relatively small part of our business versus our peers. But we think it remains a real opportunity for us. And our job in what is, I would say, a turbulent time is to really take share coming out of this.

Great. Thanks for that detail. And just on software, you had mentioned on the call, it's about 7% of AUM. Earlier in our discussion, you talked about an exit portfolio company on a good mark. What are you seeing there within the software portfolio? Are you seeing any weakness otherwise? Could you just unpack that a bit?

Yes. I think it's important to note is as we think about our software exposure across KKR and the 7% number we quoted, we really tried to be expansive in how we thought about that definition. So it's not an SIC code-based approach. As we look at, as an example, a private equity deal that would sit in our health care vertical, if the underlying is software, we've included that in the software definition. One area -- question that we've received and is not out there in the public domain, so I wanted to provide it in this session, is if you look at Global Atlantic, our software exposure there is roughly 2.5%. So not all that material. But I did want to put that 2.5% in context. The largest concentration that we have at Global Atlantic, of course, is across investment-grade fixed income. As part of that investment-grade fixed income portfolio, we own some Microsoft bonds. Those Microsoft bonds will be incorporated in that 2.5% figure. So I don't think when people talk about concerns around software, they're really talking about that. More broadly, on the software side, Bart -- we do have -- this is not something that we've been focused on for a few weeks across the headlines. This has been an effort across our firm for a few years now. And we do have some humility in our approach here. I don't think anybody really knows what the end game is, but we are taking very thoughtful and educated views with the best people across the firm and outside resources to help us do that. We don't believe all software is equal. We think across our portfolio, you're going to have real winners that will benefit from AI, and you're going to have some businesses that will likely underperform and that may get disintermediated over time. But one of the things we spend time thinking about and looking at is -- we just look at ourselves. We are a big user of technology across all of KKR and I think in a pretty sophisticated way. And we look at our long-term tech road map at KKR. And our perspective, our forecast is we're going to continue over the long term, being big users of software, especially enterprise-wide software that is really embedded across our platform. And I hope I'm wrong on this statement, although I'm probably not, given how embedded it is in our platform, probably at a higher price point over time, too. And so I -- as I said, I think we're spending a lot of time here watching it carefully. It is evolving real time, but our most considered view right now is that we're going to have more winners than losers in our portfolio as a result of the shifting dynamic that's going on in the world right now.

Awesome. Thanks for unpacking that for us. Maybe we can move to fundraising. You're coming off a record fundraising year, and I view KKR as going through sort of a fundraising supercycle, if you will, through the next 2 years. So what's the latest update on fundraising? Maybe you could touch on institutional wealth as well, but help us understand that a bit better.

Yes. So maybe I'll touch on institutional, insurance and wealth in those 3 buckets. Fundraising has been a real bright spot for us. In 2025, we raised a record $129 billion of capital. The institutional market has felt very strong, continues to feel strong for us. Of course, we're watching the volatility that's in the market. But to date, it remains a strong channel at KKR, and we believe our peers as well. If you put that $129 billion into context for a second -- and you referenced our flagship fundraises -- in actuality, only 14% of our capital raised in 2025 came from flagships, and we had our 2 largest flagships in the market in Americas Private Equity and Global Infrastructure. So we've become a much more diversified firm over even the last 5 years. 5 years ago, that ratio would have been substantially different. And I think that's an important point. So that's the institutional side. On the insurance side, we've become a much better partner to insurance companies by virtue of owning Global Atlantic. Our AUM from insurance companies outside of Global Atlantic has more than tripled since we bought the business. And we have consolidated under 1 team, our broader insurance relationships. So we're able to go talk to insurance companies with 1 team around potentially being a reinsurance provider for them, either on the flow side or block side, how we can partner with them on the asset management side and how we might be able to distribute to them through our Capital Markets business. So I think it's a pretty powerful way of approaching that industry remains a strong point for us. And then I touched on private wealth at the outset of this discussion. A lot of headlines on private wealth. I wanted to provide some facts on -- some new facts as part of this discussion as well. We mentioned on our Q4 earnings call that in January, so Feb 1 closes, we had raised $1.3 billion of C-suite capital as our private wealth vehicles. That was up 20% year-on-year, I think, differentiated from the space. A new number that we wanted to provide this morning was that in February, so for March 1 closes, we've raised $1.4 billion of capital. And so again, past performance doesn't indicate future performance, but it is a healthy data point for us, especially when we look across our industry and see different numbers coming from our peers and I think speaks to the diversification of our platform. But again, the long-term vision in private wealth to us is not about month-to-month capital raising, it's really about building products and vehicles that were proud of 10-plus years from now that starts with creating a great client experience, with delivering exceptional investment performance. And if we do that, we're confident over the long term that the adoption of the private wealth investor to alternatives will follow. And we'll have products that are very scaled, and it can be quite generative on behalf of our shareholders.

It's great color, and thanks for sharing that additional data point. Super appreciate it. One point I want to touch on a bit further is from an operational perspective, how do you manage -- I think you've got about 30 strategies in the market, so very diversified across asset classes. How do you guys manage that fundraising pipeline, if you will, internally?

Yes. It's interesting. We've had a large number of products out there now for a number of years. The 30 products isn't new for us. I think importantly, though, I want to take you back to our strategy. We do not want to be all things to all people in asset management. We want to be great at the things that we are already doing. And so I don't think you're going to see -- certainly not going to see a lot of strategy proliferation for us at all. And I don't think that you're going to see as much product proliferation for us relative to our peers. Because it's not about the next asset management product and the next asset management product after that. That is not how we define our strategy. And so when -- it's really about trying to be great at the things that you're already doing, it makes managing that portfolio of capital raising a lot easier to digest. Of course, you layer on top of that, a substantial sales force across the globe and global relationships that extend across, of course, the institutional insurance and wealth side, I think, position us to be able to handle that number of products that are in the market. But I don't think, Bart, you're going to see us over the next couple of years go from 30 products to 60-plus products.

Okay. Got it. Got it. Rob, you mentioned earlier in our discussion, the Arctos acquisition. I want to spend a couple of minutes there in terms of -- walk us through the strategic rationale for that deal. And then you've put out a target -- a longer-term target of $100 billion in that segment, and so the building blocks as you think about that scaling over time.

We're incredibly excited about this acquisition. It's something, in a lot of ways, we wanted to get done for a long period of time. The Arctos business today has two parts of the business. In a lot of ways, they really created the asset class around sports, team and league investing across the globe. They are the clear leader in that space. We think the broader sports ecosystem has got a lot of tailwinds behind it. It will be a real addressable market that grows over the next decade at really attractive rates, and we are very well positioned to be the leader in that broader space over that period of time. A lot of growth in front of us in sports. Second part of the business is GP Solutions. This is a large and growing addressable market in its own right. Arctos on its first-time fund is already a top player in the space. It's really about being a liquidity provider to other alternative asset managers. Think growth capital, dealing with succession issues, potentially buying out retired partners from -- or institutional investors. We think there's a lot of tailwinds, especially in an environment in the alternative asset management space that can see some consolidation over time. And then the third part of the business doesn't exist today, but in some respects, might be the biggest over time. You look at KKR on a blank sheet of paper, and the biggest area or addressable market that we're not present in today -- I get asked about this all the time -- is the secondary space. And we've always said that it is not a need to do for KKR. We can achieve our long-term financial ambitions without it. But if we ever found the right partner that we felt like we can build a top player globally with, we would be all in. And we feel like we felt -- we found that, rather, with the Arctos team. The legacy of the leadership team comes from the secondary space. We think their credibility in that asset class, their ability to recruit talent, combined with our brand, our access to capital, our industry expertise can allow us on a blank sheet of paper to build a business over a long period of time that we think is quite scaled and meaningful to KKR. And Bart, you talked about in combination, being able to build to a $100-plus billion platform. To be clear, if we did not think we can do that, we would not have done this deal. And likewise, I think if Ian Charles or Dr. O'Connor, the two founders of Arctos were up here, they would say the same thing. They would not have been interested in doing this deal if they didn't think that the combination of our two platforms can build something that's really special over time. So we're, as I mentioned, really excited about what this platform can do for KKR over a long period of time.

Great. Thanks for that. And I wanted to touch on next, Strategic Holdings. It's a differentiator for KKR as well. How are the operating companies performing in today's environment? And you've got a longer-term $1.1 billion operating earnings target. Like is that reliant on a few portfolio companies? Or is it the broader portfolio kind of hitting sync and stride?

Yes. Maybe let me be clear on what Strategic Holdings is today. Strategic Holdings is really about buying businesses and owning them for the long term and generating compounding cash flow for the benefit of our shareholders. This is in addition to everything that we're doing in Asset Management and Insurance, and it is very culturally friendly in that we have no employees that sit in Strategic Holdings today. We think it is really, in a lot of ways, an unconstrained addressable market and an area where we think institutionally, given our global private equity footprint, that we've got a real right to win as an organization. And so we've got approximately 20 businesses that sit in Strategic Holdings today. It is a big and diversified portfolio. We have outlined plans to take operating earnings in Strategic Holdings from $350-plus million in 2026 to $1.1-plus billion by 2030. We're well on our way to being able to do that with the portfolio that we have. Your question, is it reliant on a small number of companies or really the portfolio? As I think about building towards 2030, very much that portfolio effect. Is it possible we can have some underperformance as part of the 20? Of course, but we're also well on track with a number of those 20 businesses that are well exceeding the investment cases that we've underwritten. So based on the diversified and global nature of that portfolio, we feel really good about being able to achieve the targets that we've outlined. And as I mentioned, this is on top of everything we're doing in Asset Management and Insurance. I want to bring us back to where I started. We think we've got the winning business model for the next decade, and Strategic Holdings is a really big piece of that.

It's a great diversifier. Look, we're coming up on time, Rob. I want to make sure I give you the floor in terms of any final comments or thoughts as we wrap it up.

Yes. Well, again, Bart, thank you for having KKR at the RBC conference today, and thank you all for your interest. There's a lot of volatility out there and a lot of headlines. But in terms of the things that we can control at KKR, our business model and the execution against that business model, we have never felt as well positioned as we do today. We feel like we've got the right team in place globally and a team that, in a lot of ways, is really locked on in being able to execute on a unique vision that we have for where we can take KKR. So thanks again for spending the time with us this morning. And Bart, thank you for having us.

Thank you, Rob, and thank you, everyone, for spending time.