01—Abstract
Summary
Summary of the 10-K filed February 27, 2023. Cited figures are marked; the original filing is the authoritative source.
KKR & Co. Inc. (KKR) reported a net loss of $1.02 billiona for the year ended December 31, 2022, a significant shift from a net income of $12.3 billion in the prior year.
This change was primarily driven by a substantial decrease in Capital Allocation-Based Income (loss) from $6.84 billionb in 2021 to a negative $2.50 billion in 2022, reflecting net depreciation in the value of underlying investments across many of its carry-earning funds, particularly in the Private Equity segment. Despite a challenging market environment characterized by rising interest rates and geopolitical uncertainty, KKR's Asset Management segment's Fee Related Earnings (FRE) increased by 10% year-over-year to $2.17 billion, driven by growth in management fees across its Private Equity, Real Assets, and Credit and Liquid Strategies businesses.
The Insurance segment, operated by Global Atlantic, contributed $545 millionc in operating earnings, though this was lower than the prior year due to higher net cost of insurance and general and administrative expenses, partially offset by higher net investment income. The firm ended the year with $503.9 billion in Assets Under Management (AUM), an increase from the prior year, driven by new capital raised and acquisitions, although total uncalled commitments saw a slight decrease.
02—Key points
Key Highlights
- KKR reported a net loss of $1.02 billion for the year ended December 31, 2022, a significant decrease from a net income of $12.3 billion in 2021.
- Capital Allocation-Based Income (loss) shifted from a gain of $6.84 billion in 2021 to a loss of $2.50 billion in 2022, largely due to market depreciation impacting investment values.
- Fee Related Earnings (FRE) from the Asset Management segment increased by 10% year-over-year to $2.17 billion, driven by higher management fees across key business lines.
- Global Atlantic, KKR's insurance arm, reported $545 million in segment operating earnings, a decrease from $653 million in the prior year, primarily due to increased insurance costs.
- Total Assets Under Management (AUM) grew to $503.9 billion as of December 31, 2022, up from $470.6 billion at the end of 2021, reflecting new capital raised and acquisitions.
- The company repurchased or retired approximately $74.8 million worth of common stock and equity awards from 2015 through December 31, 2022.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 27, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $5.70B$16.23B | −64.8% |
| Interest Expense | $1.55B$1.07B | +44.9% |
| Net Income | -$521.66M$4.73B | −111.0% |
05—Questions
Frequently Asked Questions
What was KKR's overall financial performance in 2022?
KKR reported a net loss of $1.02 billion for the year ended December 31, 2022. This was a significant decrease compared to a net income of $12.3 billion in 2021. The decline was primarily driven by a substantial negative shift in Capital Allocation-Based Income, which moved from a gain of $6.84 billion in 2021 to a loss of $2.50 billion in 2022, reflecting the impact of market depreciation on investment values.
How did the Asset Management segment perform in 2022?
The Asset Management segment saw its Fee Related Earnings (FRE) increase by 10% year-over-year to $2.17 billion. This growth was primarily fueled by higher management fees across its Private Equity, Real Assets, and Credit and Liquid Strategies businesses, despite a decrease in Transaction and Monitoring Fees, net, largely due to lower capital markets activity.
What was the performance of the Insurance segment (Global Atlantic) in 2022?
Global Atlantic reported Insurance Segment Operating Earnings of $545 million for 2022, a decrease from $653 million in 2021. This decline was mainly due to higher net cost of insurance and increased general and administrative expenses, partially offset by higher net investment income resulting from growth in average assets under management and higher market interest rates.
How has KKR's Assets Under Management (AUM) changed?
KKR's total Assets Under Management (AUM) increased to $503.9 billion as of December 31, 2022, up from $470.6 billion at the end of 2021. This growth was driven by new capital raised across its various strategies, including significant contributions from Global Atlantic, and acquisitions such as KJRM.
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