KKR & Co. Inc. Quarterly Report for Q2 Ended Jun 30, 2023

Summary

KKR & Co. Inc. reported its financial results for the second quarter ended June 30, 2023. The company demonstrated strong performance across its asset management and insurance segments, with total revenues significantly increasing year-over-year. The asset management segment saw robust growth in fee-related earnings, driven by higher management and transaction fees, despite a decrease in realized performance income due to market conditions affecting carried interest. The insurance segment, operated by Global Atlantic, also showed improvement with higher net investment income, benefiting from increased assets under management and higher market interest rates. Overall, the company reported a net income attributable to KKR & Co. Inc. common stockholders of $844.5 million, a substantial turnaround from a net loss in the prior year's comparable quarter. The company also continued its share repurchase program, demonstrating a commitment to returning capital to shareholders. Key financial highlights include a strong increase in Fee Related Earnings in the Asset Management segment, driven by growth in management and transaction fees, and higher net investment income in the Insurance segment due to increased assets under management and higher yields. The company's robust capital position and strategic capital deployment across its diverse business lines position it well for continued growth. Investors should note the significant swing from a net loss in Q2 2022 to a net profit in Q2 2023, underscoring a positive operational performance trajectory.

Key Highlights

• 1Total revenues increased significantly year-over-year, driven by strong performance in both asset management and insurance segments.
• 2Fee Related Earnings (FRE) in Asset Management grew substantially, reflecting higher management and transaction fees, signaling a healthy recurring revenue base.
• 3Net investment income in the Insurance segment (Global Atlantic) saw a significant increase, driven by higher AUM and improved portfolio yields due to rising interest rates.
• 4Asset Management Segment Operating Earnings saw a decrease due to lower realized performance income and investment income, partially offset by higher fee-related earnings.
• 5Insurance Segment Operating Earnings showed a slight decrease, primarily due to lower variable investment income, though overall net investment income improved.
• 6Net income attributable to KKR & Co. Inc. common stockholders turned positive at $844.5 million, a substantial improvement from a net loss of $734.6 million in the prior year's quarter.
• 7KKR continued its share repurchase program, with approximately $221 million remaining under the program as of June 30, 2023, indicating ongoing capital return to shareholders.

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