KKR(US:KKR)2021-08-03 18:48Financial Data and Key Metrics Changes - The quarter reported record fundraising, deployment, and monetization activity, with fee-related earnings per share at $0.53 and after-tax distributable earnings per share at $1.05, both record figures for the company [3][14] - Management fees increased over 40% year-over-year to $480 million, contributing to a 68% increase in fee-related earnings [3][11] - Assets under management (AUM) reached $429 billion, up over 90% year-over-year and up 17% since the last quarter [4][10] - Book value per share is now $27.03, with net cash and investments per share increasing to $17 from $12 a year ago [4][15] Business Line Data and Key Metrics Changes - Fundraising highlights include $59 billion of new capital raised, with significant contributions from North America Private Equity, Global Infrastructure, and Core Private Equity strategies [5][6] - Infrastructure AUM increased to $38 billion from $14.5 billion a year ago, while Core Private Equity AUM rose to $28 billion from $12 billion [7][10] - Real estate AUM grew to $32 billion from $11 billion a year ago, indicating strong growth across various strategies [10] Market Data and Key Metrics Changes - Perpetual capital now constitutes 30% of AUM, with a new multi-asset class partnership bringing that figure to 43% [9] - The company raised $5 billion in its open-ended core infrastructure strategy, bringing AUM in that area to $7 billion [8] Company Strategy and Development Direction - The company is focused on expanding its product offerings, particularly in the retail market, and has seen significant engagement in private wealth and retail channels [18][34] - The firm is at an inflection point with multiple growth opportunities across strategies and geographies, aiming to continue growing AUM, revenues, and profits [19][20] - The integration of Global Atlantic is proceeding well, with expectations for continued organic growth alongside new blocks [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding previous fundraising expectations and highlighted the quality of capital raised, with 98% having a contractual life of over eight years [17][24] - The firm anticipates a robust fundraising pipeline over the next 12 months, with a focus on innovative strategies to scale businesses efficiently [10][20] Other Important Information - The company reported a total realization activity of just under $1 billion for the quarter, with diversified performance across multiple funds and geographies [13][16] - The firm has $21 billion of cash and investments on its balance sheet, providing a strong foundation for future growth [9] Q&A Session Summary Question: Update on fundraising and management fees - Management noted that the fundraising exceeded expectations and they feel optimistic about achieving the $100 billion target over the next couple of years [22][24] Question: Overlap between core PE and opportunistic funds - Management indicated that there is limited overlap between core and opportunistic funds, allowing for an expanded investor base [25][28] Question: Future FRE margin and dividend policy - Management expects to see margin expansion over time, aiming for mid-60s margins, and plans to evaluate dividend policy annually with expectations for modest increases [72][74] Question: Regular flow from Global Atlantic - Management estimated an annual flow of $8 billion to $10 billion from Global Atlantic, excluding block activity, with additional growth opportunities in institutional business [63][66] Question: Deployment and realizations off the balance sheet - Deployment was $800 million off the balance sheet, with realizations at approximately $900 million for the quarter [76][77]