10-QPeriod: Q3 FY2024

KKR & Co. Inc. Quarterly Report for Q3 Ended Sep 30, 2024

Filed November 5, 2024For Securities:KKRKKRTKKR-PDKKRS

Summary

KKR & Co. Inc. reported a strong third quarter and first nine months of 2024, demonstrating robust growth across its diverse business segments. The company's Asset Management division saw significant increases in Fee Related Earnings driven by higher transaction and management fees, particularly in its Private Equity and Capital Markets businesses. The Insurance segment, operated by Global Atlantic, also performed well with increased net investment income and expanded AUM, bolstered by the full consolidation of Global Atlantic following the acquisition of remaining minority interests. Strategic Holdings contributed positively, reflecting KKR's growing direct investments in private equity strategies. Overall, KKR reported substantial year-over-year growth in Total Segment Earnings and Adjusted Net Income, underscoring the effectiveness of its diversified business model and strategic capital deployment.

Financial Highlights

28 data points
Beta

Revenue

$4.79B

Net Income

$600.55M

12.5% Net Margin

Total Assets

$360.66B

Cash & Equivalents

$14.96B

Free Cash Flow

$1.88B

Financial Statements
Beta
Revenue$4.79B
Net Income$600.55M

Key Highlights

  • 1Total Revenues increased significantly to $4.79 billion for the three months ended September 30, 2024, up from $3.32 billion in the prior year period, reflecting strong performance across all segments.
  • 2Asset Management Segment Earnings grew by 42.4% year-over-year to $1.23 billion for the third quarter, driven by substantial increases in management and transaction fees, particularly from the Capital Markets business.
  • 3Insurance Operating Earnings increased to $238.5 million for the third quarter, up from $210.0 million in the prior year period, benefiting from higher net investment income and growth in assets under management.
  • 4Strategic Holdings contributed $94.5 million in Segment Earnings for the third quarter, reflecting newly recognized dividends and realized investment income from KKR's direct private equity investments.
  • 5Fee Related Earnings (FRE) within Asset Management showed robust growth, reaching $1.00 billion for the quarter, up from $557.5 million year-over-year, highlighting the recurring revenue streams.
  • 6Total Segment Earnings increased by 47% year-over-year to $1.56 billion for the third quarter, demonstrating broad-based growth across KKR's business segments.
  • 7KKR maintained a strong capital position with $14.96 billion in cash, cash equivalents, and restricted cash as of September 30, 2024.

Frequently Asked Questions

KKR reported a strong financial performance for the third quarter of 2024, with total revenues increasing by 45% to $4.79 billion year-over-year. Net Income Attributable to KKR & Co. Inc. Common Stockholders decreased to $600.5 million compared to $1.47 billion in the prior year period, reflecting higher net policy benefits and claims from Global Atlantic and increased compensation expenses, partially offset by higher fees and capital allocation-based income. However, key non-GAAP measures like Total Segment Earnings and Adjusted Net Income showed significant year-over-year growth, indicating underlying operational strength.

The Asset Management segment saw strong growth in earnings, with Segment Earnings up 42.4% to $1.23 billion, driven by higher management and transaction fees, particularly in Capital Markets. The Insurance segment's Operating Earnings increased to $238.5 million, up from $210.0 million, due to higher net investment income and asset growth. The newly established Strategic Holdings segment contributed $94.5 million in Segment Earnings, reflecting income from direct private equity investments.

Fee Related Earnings (FRE) in the Asset Management segment demonstrated significant growth, increasing by 80% year-over-year to $1.00 billion for the third quarter. This growth was primarily driven by higher transaction fees from the Capital Markets business and increased management fees across Private Equity, Real Assets, and Credit and Liquid Strategies, indicating a healthy and growing recurring revenue base for KKR.

Net Investment Income for Global Atlantic increased by 21% to $1.70 billion for the third quarter of 2024 compared to the prior year period. This growth was driven by higher average assets under management resulting from strong new business volumes in both the institutional and individual market channels, as well as increases in portfolio yields attributed to portfolio optimization and asset rotation strategies.