Arnaud Giblat

Arnaud Giblat asked about TPG's confidence in its real estate fundraising cycle for 2026, considering the broader real estate market's performance and outlook.

Answer

CEO Jon Winkelried expressed strong confidence, citing TPG's industry-leading value creation numbers and a distinct change in the real estate opportunity set, with increased deployment in 2025. He noted growing interest from LPs in real estate and an expectation for fund-over-fund growth across all real estate strategies. CFO Jack Weingart added that the TREP business is a major tentpole, seeing strong institutional demand, and will also be offered to the high-net-worth market for the first time.

Arnaud Giblat inquired about TPG's confidence in its real estate fundraising for 2026, particularly in the context of broader market performance and a potentially softer outlook for the real estate sector.

Answer

Jack Weingart, CFO at TPG, expressed strong confidence in the real estate franchise and the upcoming fundraising cycle, citing robust, industry-leading performance and value creation. He noted a distinct change in the opportunity set due to market stress, leading to increased deployment in 2025. Jim Coulter, Executive Chairman at TPG, added that institutional LPs show strong demand for the TREP business, and a strategic channel partner plans to offer the closed-end fund to the high-net-worth market.

Arnaud Giblat asked how the economics from the Intersect Power and Google opportunity are captured by TPG and questioned whether the gap between total AUM and fee-earning AUM is due to timing or to no-fee co-investments.

Answer

Executive Chairman Jim Coulter clarified that the Intersect investment is held at the fund level, with growth potential from continued investment into the company. CFO Jack Weingart explained that no-fee, no-carry co-investments are a regular and important part of the business to serve LPs, and that this accounted for some of the gap in Q4, particularly in the credit and capital platforms.

Arnaud Giblat inquired about Global Atlantic's flow mix, specifically if it was skewing more towards real estate, the reasons behind any such shift, and its potential impact on the insurance business's margins and return on equity.

Answer

CFO Rob Lewin confirmed there was no change in Global Atlantic's flow mix. He explained that KKR strategically invested in core real estate in early to mid-2024 due to a scarcity of capital and favorable valuations in that segment. These investments, while having lower running yields (around 4%) compared to liabilities (5-6%) and initially showing P&L losses under cash accounting, are expected to generate significant accreted income and cash earnings over time, contributing positively to insurance operating earnings without meaningfully altering asset class concentration.

Arnaud Giblat inquired about a perceived shift in Global Atlantic's flow mix towards real estate, asking for confirmation, drivers, and the impact on the Insurance business's margins and ROE.

Answer

CFO Rob Lewin clarified there was no significant change in mix, but KKR strategically invested in core real estate in early/mid-2024 due to a capital dearth and trough valuations. These investments, while initially having lower running yields than liabilities and impacting the P&L, are expected to generate accreted income and cash over time, ultimately adding to Insurance operating earnings without meaningfully altering asset class concentration.

Arnaud Giblat of BNP Paribas requested more details on the €50 billion KKR-ECP joint venture, asking about the deployment mechanism, the capital split between partners, and the expected timing.

Answer

Craig Larson, Partner & Head of IR, and Scott Nuttall, Co-CEO, clarified the partnership's goal is to be a 'one-stop shop' for hyperscalers, providing creative solutions across construction, real estate, and energy. Larson stated the partnership is roughly 50/50, with KKR's capital coming from existing funds and strategies, and there is no specific investment timeline. Nuttall added that there is an ability to raise incremental capital for new projects as they arise.

Arnaud Giblat from BNP Paribas inquired about the evolving availability of bank debt for large deals and whether KKR's private debt business sees an opportunity to regain market share from banks.

Answer

CFO Rob Lewin acknowledged a brief dislocation in early April but stated the leveraged finance market is now open, though at wider spreads. Co-CEO Scott Nuttall added that capital is available, with different financing routes chosen based on the deal's complexity. He sees the syndicated and private credit markets co-existing, with private credit poised to gain share whenever increased volatility causes banks to pull back.

Arnaud Giblat requested further details on the outlook for performance in the multifamily real estate sector, specifically asking about the drivers that could help performance, beyond the low levels of new construction starts and potential rate cap improvements.

Answer

President and COO Jon Gray explained that U.S. multifamily has seen slow or flat growth due to construction absorption and slower job growth. He highlighted the positive supply dynamic, with new construction starts down two-thirds from their peak, which should support rental values over time. He noted that continued population growth, aging stock, and high costs of homeownership are pushing people into rentals, creating incremental demand. He observed an improvement in fundamentals compared to six or twelve months prior, suggesting a favorable dynamic for the year.

Arnaud Giblat asked for more details on the outlook for performance in multifamily real estate, specifically the drivers that could help improve performance, such as low new construction starts and potential rate cap improvements.

Answer

Jon Gray, President and COO, explained that slow growth in U.S. multifamily over the past couple of years was due to absorption of construction and slower job growth. He highlighted that new construction starts are down two-thirds from their peak, which should support rental values over time. He noted an improvement in fundamentals compared to 6-12 months ago, driven by lack of new supply and a healthy economy, pushing people into rentals due to high ownership costs.

Arnaud Giblat inquired about the doubling of dry powder in credit and insurance, specifically in direct lending/private debt given tight spreads and loose covenants, and BCRED's capacity development if conditions remain hot and flows strong.

Answer

President and COO Jon Gray clarified that the market isn't overheated, citing a 38% loan-to-value for Q3 direct lending originations (half of 2006-2007 levels) and spreads in line with historic levels. He noted a record deployment year and no erosion of credit standards. Vice Chairman and CFO Michael Chae added that dry powder is largely for drawdown funds, and direct lending capital sits in various vehicles, including perpetual ones, making it a smaller fraction of overall dry powder.

Arnaud Giblat inquired about the doubling of dry powder in credit and insurance, specifically asking if this trend applied to direct lending given tight spreads and loose covenants, and about BCRED's capacity development if strong flows continue.

Answer

Jon Gray, President and Chief Operating Officer, clarified that market conditions are not overheated, citing Q3 direct lending LTV at 38% and spreads in line with historical levels, with no erosion of credit standards. He noted a strong deployment year for direct lending. Michael Chae, Vice Chairman and Chief Financial Officer, added that dry powder is primarily for drawdown funds, and direct lending capital is spread across various vehicles, making it a smaller fraction of overall dry powder.

Arnaud Giblat inquired about the BXP (Blackstone Private Equity Strategies Fund), asking how the firm thinks about the product's ultimate size, its capacity to deploy capital, and potential vintage diversification relative to flagship funds.

Answer

President & COO Jonathan Gray stated that Blackstone's greatest strength is its capacity to deploy capital effectively. He explained that BXP was designed with the widest possible investment aperture—spanning geographies and strategies from control private equity to opportunistic credit—to accommodate regular inflows. By limiting the fund to qualified purchasers, Blackstone ensured maximum flexibility. Gray expressed high confidence in the firm's ability to find sufficient opportunities to serve both BXP and its institutional clients without compromising performance, citing the firm's proven ability to scale platforms.

Arnaud Giblat inquired about the five-year outlook for Blackstone's perpetual products, specifically how distribution might evolve and the level of investment required to support that growth.

Answer

Jonathan Gray, President & COO, expressed significant optimism, predicting the business could be "far larger" in five years. He noted that Blackstone has already made an "enormous investment" in its private wealth platform, with over 300 dedicated personnel globally. He believes the power of the Blackstone brand is a key differentiator that enables capital-light expansion, seeing a massive opportunity as private wealth allocation to alternatives (currently ~1%) moves closer to institutional levels (~30%).