KKR(KKR)2025-05-28 18:30Financial Data and Key Metrics Changes - The company has a long-term view on inflation and interest rates, expecting them to remain higher for longer, which aligns with historical trends [4][5][9] - The company has $116 billion of dry powder available for investment, indicating strong capital reserves for future opportunities [7] Business Line Data and Key Metrics Changes - The private equity portfolio is marked at over 60% at more than 1.5 times the cost, while public names are marked at an average of four times the cost, reflecting strong performance [18][19] - The company has been actively exiting investments, including sales in Japan and infrastructure, contributing to a mature portfolio [19] Market Data and Key Metrics Changes - More than 70% of the company's deployment in infrastructure over the last five years has been outside the United States, showcasing a global investment strategy [34] - The company has seen a shift in investor sentiment, with a more balanced approach to global allocations, particularly towards Europe and Asia [36] Company Strategy and Development Direction - The company is focusing on building portfolios that can navigate different economic cycles, emphasizing long-term investments [15][16] - Strategic holdings have been introduced to capture lower-risk, attractive reward investments, diversifying the company's offerings [23][25] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the realization outlook, citing a strong pipeline of realizations and a disciplined investment approach [15][21] - The company does not foresee significant stress in its portfolios despite macroeconomic concerns, indicating confidence in its investment strategy [12][14] Other Important Information - The company is expanding its product offerings for high-net-worth individuals through partnerships, aiming to capture a larger share of the market [45][49] - The insurance segment is expected to see growth in earnings as the business model transitions and third-party capital is raised [92][93] Q&A Session Summary Question: What is the company's view on inflation and economic growth? - The company expects inflation and interest rates to remain higher for longer, which is consistent with historical trends [4][5] Question: How is the company managing its portfolio amidst macroeconomic concerns? - The company has not seen significant stress in its portfolios and feels confident due to its portfolio construction and historical experience with economic cycles [12][14] Question: What is the outlook for the company's strategic holdings? - The strategic holdings segment is designed to capture lower-risk investments with attractive returns, and the company is optimistic about its growth potential [23][25] Question: How is the company addressing client demand for alternative products? - The company is seeing significant adoption of its alternative products and is expanding its offerings to cater to high-net-worth individuals [38][45] Question: What is the company's strategy regarding direct lending and asset-based finance? - The company is actively involved in both direct lending and asset-based finance, with a focus on scaling third-party business alongside its own insurance growth [76][80]