10-QPeriod: Q3 FY2021

KKR & Co. Inc. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 5, 2021For Securities:KKRKKRTKKR-PDKKRS

Summary

KKR & Co. Inc. (KKR) reported strong financial results for the period ending September 30, 2021, driven by significant growth in both its Asset Management and Insurance segments. The company saw substantial increases in total revenues and net income attributable to KKR & Co. Inc. common stockholders, largely due to the successful integration of Global Atlantic and robust performance across its investment strategies. Key drivers included growth in management and transaction fees within Asset Management, bolstered by new fund performance and increased capital deployment. The Insurance segment, primarily Global Atlantic, contributed significantly to revenues through net premiums and net investment income, reflecting the strategic acquisition earlier in the year. The company's balance sheet reflects a substantial increase in total assets and equity, largely due to the Global Atlantic acquisition. KKR maintained a strong liquidity position, with significant cash and cash equivalents across both segments, and managed its debt obligations effectively. The report highlights KKR's strategic focus on expanding its asset management capabilities and the positive financial impact of its insurance operations, positioning the company for continued growth.

Financial Highlights

30 data points
Beta

Revenue

$4.48B

Net Income

$1.16B

25.8% Net Margin

Total Assets

$265.80B

Cash & Equivalents

$12.51B

Free Cash Flow

-$2.25B

Financial Statements
Beta
Revenue$4.48B
Interest Expense$278.17M
Net Income$1.16B

Key Highlights

  • 1Total Revenues surged to $4.48 billion for the three months ended September 30, 2021, a significant increase from $1.90 billion in the prior year period, driven by both Asset Management and the newly included Insurance segment.
  • 2Net Income Attributable to KKR & Co. Inc. Common Stockholders rose to $1.16 billion for the three months ended September 30, 2021, up from $1.06 billion in the prior year period, reflecting strong operational performance.
  • 3Asset Management Segment Operating Earnings increased significantly to $1.07 billion for the three months ended September 30, 2021, up from $593.8 million in the prior year period, driven by growth in management fees and realized performance income.
  • 4The acquisition of Global Atlantic (Insurance segment) contributed positively, with Insurance Segment Operating Earnings of $115.0 million for the three months ended September 30, 2021, demonstrating early success from the integration.
  • 5Total Assets grew substantially to $265.8 billion as of September 30, 2021, compared to $79.8 billion as of December 31, 2020, largely due to the Global Atlantic acquisition.
  • 6Fee Related Earnings (FRE) for Asset Management increased to $529.6 million for the three months ended September 30, 2021, up from $324.0 million in the prior year period, highlighting recurring revenue strength.
  • 7Total Capital Invested in Public Markets increased significantly to $9.7 billion for the three months ended September 30, 2021, from $1.7 billion in the prior year period, indicating robust deployment of capital.

Frequently Asked Questions

KKR demonstrated strong financial performance for the quarter ending September 30, 2021. Total Revenues increased significantly to $4.48 billion, and Net Income Attributable to KKR & Co. Inc. Common Stockholders rose to $1.16 billion. This growth was driven by strong contributions from both the Asset Management and Insurance segments, the latter benefiting from the recent acquisition of Global Atlantic.

The acquisition of Global Atlantic, completed on February 1, 2021, significantly expanded KKR's balance sheet and diversified its revenue streams. The Insurance segment, primarily comprising Global Atlantic's operations, contributed $2.24 billion in revenues and $115.0 million in Insurance Segment Operating Earnings for the three months ended September 30, 2021, demonstrating a positive initial impact on KKR's overall financial performance.

The Asset Management segment's growth was primarily driven by an increase in management fees, particularly from new fund vintages like North America Fund XIII and Global Infrastructure Investors IV, and a rise in transaction and monitoring fees. Fee Related Earnings (FRE) also saw a substantial increase, reflecting the recurring nature and profitability of KKR's fee-generating businesses.

KKR maintained robust liquidity, with $7.26 billion in Cash and Cash Equivalents for Asset Management and $4.72 billion for Insurance as of September 30, 2021. The company's debt obligations increased primarily due to the Global Atlantic acquisition and senior note issuances, but were supported by strong operating cash flows and prudent management of its credit facilities and borrowing arrangements.