KKR(US:KKR)2025-11-07 15:00Financial Data and Key Metrics Changes - The company reported fee-related earnings of $1.15 per share, total operating earnings of $1.55 per share, and adjusted net income of $1.41 per share, all of which are among the highest in its history as a public company [3][6] - Management fees reached $1.1 billion, up 19% year over year, with a healthy growth of 16% excluding catch-up fees [3][4] - Total operating earnings were $1.55 per share, a record quarter and 17% ahead of the previous quarter [5][6] - Adjusted net income was $1.3 billion, or $1.41 per share, reflecting an 8% increase year over year [6][7] Business Line Data and Key Metrics Changes - The insurance segment reported operating earnings of $305 million, maintaining a run rate around $250 million [5] - Strategic Holdings operating earnings were $58 million for the quarter, significantly ahead of the previous year [5] - Realized performance and investment income totaled $935 million within the asset management segment [6] Market Data and Key Metrics Changes - The company raised $43 billion in capital during Q3, marking the second-highest fundraising quarter in its history [8][9] - Inflows from Global Atlantic within credit were $15 billion, significantly up year over year [9] - The private equity and real asset business lines raised $16 billion of capital in the quarter [10] Company Strategy and Development Direction - The company is evolving its insurance business to extend the duration of its book and leverage its global investment management capabilities [12][13] - There is a focus on raising more third-party capital across its IV Sidecar strategy to grow Global Atlantic in a capital-efficient manner [12][13] - The company aims to achieve $4.50+ in fee-related earnings per share and $7+ in after-tax adjusted net income per share by 2026 [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 guidance, citing strong fundraising momentum and a constructive monetization environment [26][27] - The company noted that while the monetization environment is currently favorable, it may delay some activities if conditions deteriorate [27] - Management highlighted the importance of maintaining a disciplined approach to investment pacing and portfolio construction [30][31] Other Important Information - The company has over $1 billion in monetization activity, indicating the strength and maturity of its portfolio [6] - The company has $126 billion of dry powder available for future investments, positioning it well for growth [10] - The company expects to see a significant increase in third-party capital capacity, which could translate to over $60 billion of additional fee-paying AUM [17][18] Q&A Session Summary Question: Can you summarize your international perspective, particularly regarding Asia? - Management noted increasing investor demand for Asia, with a broad understanding of opportunities in markets like Japan, India, and Southeast Asia [36][37] Question: What is the normalized level of ROE for the insurance business? - Management indicated that they expect to achieve an all-in ROE of over 20% as the portfolio matures and third-party capital contributions increase [49][50] Question: How do you see the capital markets business expanding? - Management highlighted the potential for significant annual opportunities in capital markets, driven by the capabilities built out in distribution and origination [54][55] Question: What are the expectations for fee-related earnings in 2026? - Management expressed confidence in achieving the $4.50+ target for fee-related earnings per share, driven by strong fundraising and operational leverage [46][47] Question: How will the changes in the insurance business improve client partnerships? - Management emphasized that owning an insurance company allows for a better understanding of client needs and enhances the quality of engagement with insurance CIOs and CEOs [62]