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. "