KKR(US:KKR)2022-08-02 17:58Financial Data and Key Metrics Changes - The company reported fee-related earnings per share of $0.52 and after-tax distributable earnings of $0.95 for Q2 2022, with management fees up 39%, fee-related earnings up 28%, and after-tax distributable earnings up 14% compared to the first half of 2021 [5][36] - Assets under management (AUM) reached $491 billion, a 14% increase year-over-year, while fee-paying AUM increased to $384 billion, up 20% compared to last year [14][32] - Realized performance income was $731 million, contributing to total asset management operating earnings of just over $950 million [35][36] Business Line Data and Key Metrics Changes - The private equity business line AUM increased from $92 billion at the end of 2019 to $172 billion today, with management fees and capital invested growing at a compounded annual growth rate of approximately 30% [13] - Real assets AUM grew from $28 billion at the end of 2019 to $114 billion today, with infrastructure AUM increasing from $15 billion to almost $50 billion and real estate AUM rising from $9 billion to over $60 billion [9][10] - The public markets business line was renamed to credit and liquid strategies, reflecting the growth in the real assets business [8] Market Data and Key Metrics Changes - Fundraising momentum was strong, with $25 billion of new capital raised in Q2 and $52 billion for the first half of the year, with over 40% of new capital raised coming from real assets [14][15] - The company deployed $19 billion in Q2 and over $40 billion year-to-date, with significant investments in real assets [18][19] Company Strategy and Development Direction - The company is focused on becoming a more diversified asset management firm, with 65% of new capital coming into real assets and credit businesses [37] - Long-term financial goals include achieving fee-related earnings of over $4 per share and after-tax distributable earnings of over $7 per share by 2026 [46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the firm's ability to navigate the current volatile market environment, highlighting a strong investment portfolio and a unique business model [40][55] - The company is not overly concerned with near-term volatility and believes it can capitalize on opportunities presented by market fluctuations [55] Other Important Information - The company published its 11th annual Sustainability Report, emphasizing its commitment to managing ESG issues across its investment portfolio [21] - The company has implemented broad-based employee ownership programs across many of its investments, which have shown positive operational improvements [29][30] Q&A Session Summary Question: Deployment and Capital Allocation - Management indicated that the $44 billion of committed capital is spread across private equity, real assets, and credit businesses, with a blended management fee rate of just over 1% [58] - The company noted that private equity and real assets deployment in the first half of the year was $27 billion, up from 12% in the first half of last year [59] Question: Private Equity Performance - Management confirmed that public equity was down more than private equity, with a significant write-up on a private portfolio impacting the results [63] Question: Capital Management and Buybacks - Management stated that they have bought back approximately 85 million shares since initiating the buyback program and will continue to focus on maximizing profitability on a per-share basis [69] Question: Real Assets Strategy - Management clarified that the segmentation of real assets is a recognition of the business's growth and does not indicate a change in strategic focus [87]