KKR(KKR) - 2024 Q2 - Quarterly Results

Financial Performance - KKR reported a GAAP net income of $0.7 billion for Q2 2024, compared to $1.4 billion year-to-date[15]. - Total revenues for Q2 2024 were $4.17 billion, up 15% from $3.63 billion in Q2 2023[16]. - Fee Related Earnings (FRE) reached $755 million in Q2 2024, an increase of 25% year-over-year[17]. - Total Operating Earnings (TOE) for Q2 2024 were $1.0 billion, reflecting a 36% increase compared to Q2 2023[17]. - Adjusted Net Income (ANI) was $972 million in Q2 2024, up 49% year-over-year[17]. - The company reported a Net Income of $667.93 million for Q2 2024, down from $844.46 million in Q2 2023[83]. - Adjusted net income for Q4'23 was $971,869 thousand, compared to $652,604 thousand in Q2'23[91]. - Total GAAP revenues for Q4'23 were $4,171,910 thousand, an increase from $3,626,518 thousand in Q2'23[92]. - Total operating earnings for Q4'23 were $1,049,462 thousand, up from $772,533 thousand in Q2'23[91]. Assets Under Management (AUM) - Assets Under Management (AUM) increased to $601 billion, a 16% rise from the previous year[17]. - KKR's Fee Paying Assets Under Management (FPAUM) grew to $487 billion, up 18% year-over-year[17]. - Global Atlantic's Assets Under Management (AUM) reached $183 billion, with $139 billion in Credit AUM[51]. - Total Assets Under Management amounted to $493.63 billion, with $328.54 billion eligible to receive carried interest[73]. Capital Raising and Investments - KKR raised $32 billion in new capital during the quarter, marking the second highest quarterly capital raised[17]. - Capital invested in Q2 2024 was $23 billion, which is 90% larger than the same period in the previous year[17]. - New capital raised in the Asset Management Segment totaled $12.8 billion in the quarter, with $32.4 billion raised in the LTM[23]. - KKR's portion of Uncalled Commitments to its investment funds includes $4.6 billion for Private Equity, $2.9 billion for Real Assets, and $1.2 billion for Credit and Liquid Strategies[100]. Dividends and Shareholder Returns - The company declared a regular dividend of $0.175 per share of common stock[17]. - The company declared a dividend of $0.175 per share for Q2 2024, payable on August 15, 2024[79]. Performance Metrics - Fee Related Earnings per Adjusted Share rose by 18% year-over-year, reflecting growth in management and transaction fees[26]. - Total Asset Management Segment Revenues consist of Management Fees, Transaction and Monitoring Fees, Fee Related Performance Revenues, Realized Performance Income, and Realized Investment Income, excluding unrealized gains[127]. - Total Segment Earnings excludes equity-based compensation charges and transaction-related items, providing a clearer view of operational performance[120]. Risks and Challenges - KKR faces risks related to future business growth and the ability to capitalize on growth opportunities, including assumptions about New Capital Raised and Assets Under Management[142]. - The company reported high variability in earnings and cash flow, with potential impacts from geopolitical developments and difficult market conditions[142]. - KKR's investment activities are subject to risks such as dependence on significant leverage and investments in relatively illiquid assets[142]. - Global Atlantic's growth strategies may face challenges, including differences between policyholder behavior estimates and actual claims experience[143]. Strategic Outlook - Future outlook includes continued focus on strategic holdings and potential market expansions, although specific guidance was not detailed in the call[89]. - The company anticipates future growth in its Strategic Holdings segment, which is expected to generate compounding earnings over time[137]. - KKR is focused on expanding into new investment strategies and geographic markets, which may involve additional risks[142]. Organizational and Regulatory Considerations - KKR's organizational structure poses risks, including the potential decline in common stock price and obligations under a tax receivable agreement[144]. - The company must navigate extensive regulations, including compliance with the Investment Company Act of 1940[144].