Investor letter, April 2021

The author is highly bullish on KKR, describing it as a juggernaut benefitting from the shift to larger alternative asset managers, with 35% employee ownership, mid-teens organic asset growth, and a path to $5/share earnings in a couple of years (shares ~$55, book value $23/share). The author says KKR is the one business they would hold for five years no matter what.

“KKR has built a juggernaut, benefitting from the continued shift to larger alternative asset managers. With 35% employee ownership, the company continues organically growing assets in the mid-teens with opportunities to accelerate this through the acquisition of Global Atlantic, a leading retirement and life insurance company. They are steadily increasing their base of permanent capital and are incubating several strategies to provide future growth. In their recent investor day (presentation linked here), they laid out a path to earning $5 per share in a couple of years (shares are trading around $55 as of the writing of this letter). Given their secular tailwinds, balance sheet (book value of $23 per share), stable base of capital, and track record of taking advantage of disruptions in the equity markets, if there were one business that I had to hold for five years no matter what, it would be KKR.”