Private Equity Deployment Outlook
Q: What is the expected investment activity in private equity?
A: Management highlighted a very healthy pipeline in private equity, with significant pending investments in corporate carve-outs in Europe and the U.S.. They expect increased activity as the M&A market comes back, and recent deals like the Cotiviti transaction, which closed today, illustrate this momentum.

Capital Allocation Priorities
Q: How will you allocate the $25 billion cash flow over the next 5 years?
A: Management intends to use excess free cash flow to drive durable and recurring growth in earnings per share by allocating capital nimbly across four areas: core private equity, share buybacks, insurance, and strategic M&A. They have no fixed percentages and focus on pursuing the highest-return opportunities, aiming for $1 billion plus in Strategic Holdings operating earnings by 2030.

Growth in Private Credit and Fundraising
Q: Can you discuss the growth and fundraising in your credit portfolio?
A: Investor interest in private credit remains strong, with KKR's private credit AUM reaching $93 billion as of March 31, up 22% year-over-year. Fundraising is broad-based across institutional, private wealth, and insurance channels, including evergreen capital in direct lending, opportunistic asset-based finance, and Asia private credit.

Monetization Pipeline and Realization Outlook
Q: What is the outlook for realizations and monetizations?
A: KKR has over $400 million of visible pipeline related to monetizations, with approximately 60% expected from carry and 40% from investment income. Management notes that pipelines are healthier than at any point in the past 12 to 18 months, driven by a maturing portfolio and strong investment performance, with gross unrealized carry up 50% year-over-year.

Asset-Based Finance and Synthetic Risk Transfers
Q: How do you see the ABF deployment opportunity unfolding, especially in synthetic risk transfers?
A: KKR is active in the synthetic risk transfer market, which is expanding, particularly in the U.S.. With the ABF platform now over $50 billion in AUM, KKR sees significant macro tailwinds and expects continued robust deployment opportunities as banks look to free up capital.

Capital Markets Business Outlook
Q: What is the outlook for your capital markets business?
A: After generating around $600 million of revenue in each of the past two tough years, KKR's capital markets pipelines are better today than at any point in the last 12 months. In 2021, the business generated $850 million in revenue, and with increased activity and greater market share, management expects to exceed that figure as markets continue to open up.

Impact of Block Transactions on GA Returns
Q: How have recent block transactions affected Global Atlantic's returns?
A: Completing over $20 billion in block transactions led to a temporary reduction in returns due to the immediate cost of liabilities and a 12- to 18-month asset redeployment period. Management views this as part of a strategic investment, expecting long-term ROEs to benefit as assets are deployed into higher-yielding investments, including attractive opportunities in core and core-plus real estate.

Cost of Insurance and ROE Outlook for Global Atlantic
Q: How should we think about the cost of insurance and ROE for Global Atlantic?
A: As interest rates rise, crediting spreads and yields have increased, allowing Global Atlantic to maintain its spreads. Management continues to forecast long-term pretax ROEs for Global Atlantic in the 14% to 15% range, confident in their ability to source attractive liabilities and deploy assets effectively.

Scaling Asset-Based Finance Originations
Q: What steps are you taking to drive ABF originations higher?
A: Post the Global Atlantic acquisition, KKR's ABF business has scaled significantly, with 18–19 global platforms and over 7,000 people sourcing unique deal flow. While they plan to add more platforms and resources, the focus is on leveraging existing opportunities, as they are capital constrained rather than opportunity constrained.

Global Atlantic Flows and PRT Opportunity
Q: Can you discuss Global Atlantic's flows and the pension risk transfer opportunity?
A: In the quarter, about 75% of Global Atlantic's flows came from the institutional side, including a significant block transaction with Manulife. While starting from a low base, KKR sees the pension risk transfer market as a medium- to long-term opportunity, leveraging their institutional reinsurance platform to capture future growth.

View on Secondaries Market Participation
Q: Do you plan to scale into the secondaries market?
A: KKR does not see secondaries as a need-to-have business and focuses on areas where they can be a top three player. Management is comfortable concentrating on their existing businesses and has evaluated opportunities in secondaries but determined they were not the right fit or did not offer acceptable returns.