Thank you, operator. Good morning, everyone. Welcome to our first quarter 2024 earnings call. This morning, as usual, I'm joined by Rob Lewin, our Chief Financial Officer; and Scott Nuttall, our Co-Chief Executive Officer. We would like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our press release, which is available on the Investor Center section at kkr.com. And as a reminder, we report our segment numbers on an adjusted share basis. This call will contain forward-looking statements, which do not guarantee future events or performance. Please refer to our earnings release and our SEC filings for cautionary factors about these statements. We know many of you joined us for our 2024 Investor Day just 3 weeks ago. Thank you for spending the day with us. And for those of you who were unable to participate or are newer to KKR, we would encourage you to watch a replay of the webcast or review the Investor Day presentation and transcripts that are on the Investor Relations section of our website. There is a wealth of information, of course, across all of those materials. And as a reminder, before getting to the numbers themselves, starting with this quarter, our financial reporting reflects the previously announced segment and financial metric changes. Of particular note, first, we closed on the remaining interest in Global Atlantic on January 2, and we now own 100% of GA. Second, we're now reporting a new segment, Strategic Holdings. Third, we've introduced a new financial metric, total operating earnings, which consists of fee-related earnings plus insurance segment and Strategic Holdings operating earnings. Total operating earnings represents the more recurring and stable portion of our earnings and is a measure we look at to evaluate our performance as it reflects how our business model and how our financial profile has evolved. Our expectation is that total operating earnings should approximate 70% of pretax earnings over time. And finally, our Q1 financials reflect our revised compensation ratios, which deliver more FRE to our shareholders and drive even more alignment between our compensation model and the outcomes of our clients. And as a reminder, for additional details, we posted recash financials in late March. So now turning to Q1 and our headline financial metrics. Fee-related earnings per share for the quarter came in at $0.75, that's up 22% compared to Q1 '23. Total operating earnings were $1.08 per share in the quarter. And adjusted net income per share, which is after tax, was $0.97, and that's up 20% year-over-year. Looking at our financials in a little further detail. Management fees in Q1 were $815 million. That's up 4% sequentially from last quarter. Net transaction and monitoring fees were $152 million, $116 million of which were generated from our Capital Markets business. Our fee-related compensation ratio was 17.5%, which is right at the midpoint of our target range. Other operating expenses were $145 million. You're seeing a continued focus on expense management. This number is down 4% compared to Q1 of 2023. But we expect this line item to increase modestly over the balance of the year, driven by continued investments in operations across KKR, alongside an increase in placement fees, given our active fundraising pipeline. So in total for the quarter, fee-related earnings were $669 million or the $0.75 per share I mentioned a moment ago. And our FRE margin came in at 68%. That margin figure is up 700 basis points compared to Q1 '23, and that's driven both by the change in our compensation framework as well as the strong expense management in the quarter. Insurance operating earnings were $273 million. There are really 2 things to point out here. First, portfolio yields this quarter reflect elevated cash and more liquid assets at GA, and that's largely due to 2 sizable recent transactions with the MetLife and Manulife blocks closing in Q4 '23 and Q1 '24, respectively. So the full cost of those liabilities come on to the GA balance sheet at close, but it does take some time to redeploy those assets into our target portfolios. And that delay or that ramp is expected, of course, and is built into our pricing for each of these deals. And secondly, we're seeing attractive investment opportunities in asset classes like core plus real estate and infrastructure, as our origination capabilities are presenting GA with attractive risk-adjusted return opportunities. However, while these opportunities come with attractive long-term ROEs, near-term yields tend to be more modest. And moving to our new segment, Strategic Holdings. In page 18 of the earnings release. Remember, the segment today consists of our direct interests in our core private equity portfolio, which is a long-duration investment strategy with an expected hold period of 10 to 15-plus years. So 19 businesses that are well diversified and generally have durable, defensive financial profiles alongside growing earnings. And looking at KKR's share of these businesses, 2023 revenues were approximately $3.6 billion, with EBITDA of $900-some-odd million. And given the maturing of the portfolio as well as the stability of operating performance, we anticipate these investments to be more regular dividend payers over time. So operating earnings in the quarter were $21 million, driven by dividend activity. As we stated previously, we expect Strategic Holdings' operating earnings to be more modest in 2024. However, we expect that will change in a pretty significant way looking beyond '24, with operating earnings of $300-plus million by 2026, $600-plus million by 2028 and $1-plus billion by 2030. Our visibility and the opportunities we see here are highly differentiated looking across our space. So putting all of that together, total operating earnings were $1.08 per share. Moving to investing earnings. Realized performance income was $272 million and realized investment income was $135 million. This was primarily driven by secondary sales, strategic exits, and realized carry from the core private equity portfolio. So altogether, adjusted net income totaled $864 million or $0.97 per share.

Thanks a lot, Craig, and thank you all for joining our call this morning, and for the many of you that spent time with us at our Investor Day a few weeks back. I thought I would start this morning by going through some of our key operating metrics. During the quarter, we raised $31 billion of capital. That's almost $90 billion over the last 12 months. In just this quarter alone, we had attractive outcomes across each of our businesses. Our private equity and real asset businesses together raised $9 billion of capital across a number of strategies. And that's before any meaningful closes from our upcoming flagship raises. And our momentum in credit has really continued, with new capital raise totaling $21 billion, with most of the capital coming from our direct lending, asset-based finance and leveraged credit strategies. And looking more specifically at our K Series vehicles, we raised almost $3 billion year-to-date through April 1, primarily in private equity and infrastructure. We also launched a private BDC in the quarter and are starting to see some real inflows here as well. Turning to capital invested. We deployed $14 billion in the quarter. Deployment within private markets was largely driven by infrastructure as well as real estate equity. And over half of the capital invested in the quarter came from credit, primarily across asset-based finance and direct lending. We are seeing a significant ramp in credit deployment, reflecting the overall growth of our credit platform. Now looking forward to Q2, we expect there to be a healthy pipeline of new deployment given the activities we are seeing broadly across the firm. And over the course of the year, we do expect deployment to pick up meaningfully. Before wrapping up this morning, I did want to spend a couple of minutes summarizing the key takeaways from our Investor Day a few weeks back. Scott and Joe led off our Investor Day with a very simple message: While we have experienced a lot of growth, it feels like we are just getting started. In terms of the key takeaways from the day, first, we provided medium-term guidance. Over the next 12 to 18 months, we expect to be raising capital for over 30 strategies, including a number of our flagships. We expect to raise $300-plus billion of capital over the course of 2024 through 2026. In terms of our financial metrics, by 2026, we expect $4.50-plus per share of FRE, implying a CAGR of approximately 20%, $7-plus of total operating earnings per share and $7 to $8 per share of adjusted net income, implying a CAGR of roughly 30%. Second, looking ahead, we feel quite confident in our longer-term trajectory. We expect $15-plus of adjusted net income per share in the next 10 years or less, with approximately 70% of these earnings to be more recurring in nature. Over the next 5 years, we also expect $25-plus billion of cash generation. We anticipate that this cash will get deployed across 4 key areas: core private equity, share buyback, strategic M&A and insurance. Our model really gives us the confidence across all of these avenues of deployment. In each case, we have a strong track record of being able to deploy capital against high ROE opportunities that also generate recurring and growth-oriented earnings per share. And number three, looking at our key themes, we made sure to highlight our diversified and purpose-built business model. Asset Management plus Insurance plus Strategic Holdings, all working synergistically together to generate sustainable and significant P&L outcomes. And we have a lot of confidence in each of our 3 growth engines. In Asset Management, we have multiple paths to surpass $1 trillion of AUM over the next 5 years. In insurance, we have strong conviction that we could double Global Atlantic from here. And finally, strategic holdings, which is really an unconstrained market opportunity for us and where we have a real right to win. We expect to have $1 billion-plus of annual operating earnings by 2030. Our business model is built to drive compounding earnings over a very long period of time. And while the opportunity in front of us is a massive one, we do believe that we can achieve our outlined targets without having to build anything new. And we have a team and culture, as you would have heard from over 15 of our business leaders on April 10, that both facilitates and accelerates our ability to achieve our strategic ambitions. So when you combine our business model, together with our team and our culture, this is what distinctly differentiates KKR.

Yes. The only thing I'd add, Craig, is we do think the M&A market is coming back. I think to your point, the leveraged credit markets opened up in January. We are starting to see this impact all of our businesses, to Craig's comments. But I'd say, in particular, private equity pipeline, which is up significantly. There's a lot of activity. What we announced in Q1 is obviously backward looking given it takes some time for these deals to close. The Cotiviti deal that you mentioned actually closes today. So I think you're going to see more of the announced deals get closed, and you're going to see more deals get announced as this pipeline turns into real deal pipeline and that turns into real deployment. I think you're also going to see this on the monetization side. If the M&A market is picking up and the IPO markets are open, you're going to see us selling more assets as well, refinancing more assets and taking more companies public. So I think you're going to see more activity overall across private equity.

Thanks for the question. I'll start, and I'm sure Scott will have some thoughts too. The $1.1 billion of deployment this quarter doesn’t reflect our overall activity. We have a strong backlog of announced transactions, and a relatively small amount of that closed in the 90 days ending March 31. In terms of capital deployment, we can begin with the themes discussed at Investor Day. We see Asia as a significant opportunity for KKR moving forward, particularly Japan. The largest deployment this quarter was from our Japanese REIT business, which successfully acquired over 30 logistics warehouses. We also focus on corporate carve-outs and private equity opportunities where our operational resources can make a significant impact. Two of our larger pending investments are corporate carve-outs in Europe and the U.S. Additionally, infrastructure continues to be a focus area for us, with our second-largest investment in the quarter involving a U.K.-listed smart metering business. Our pipeline of announced but not yet closed activity in infrastructure remains strong, with a variety of themes including digital and renewables. This activity extends globally, with interests in companies based in Italy, Germany, and Portugal. Overall, the main takeaway is that we have a robust pipeline and are consistently seeking opportunities to deploy capital.

Great. And thanks a lot for the question, Alex. So you did mention this, I think the most important thing as it relates to capital allocation is to have a consistent framework, and we've had a really consistent framework for some time with one overriding objective, and that's to use our excess free cash flow to drive durable and recurring and growth-oriented earnings per share and to do so by leveraging our platform at really high ROEs. And I think the only thing that's really changed is, at our Investor Day, we outlined the opportunity to generate $25-plus billion of cash generation over the course of the next 5 years, and it's just a huge opportunity for us. In terms of bucketing across the 4 main areas of deployment, core private equity, share buybacks, insurance and strategic M&A, we don't have a fixed percentage by design. And it's really about being able to allocate that capital base nimbly to the opportunities that drive the highest return and the highest amount of earnings per share over a long period of time. That's our focus that's what we think we're really good at. As it relates to your question on Strategic Holdings, we outlined a path to $1 billion plus of Strategic Holdings operating earnings by 2030. It's something that we're confident in. We've got real visibility on where that's going to come from. I do think there's the opportunity if we see investments for us to be able to make in Strategic Holdings to drive that number north of that over time as we allocate capital. But again, no fixed percentage in how we're thinking about it. And I think that's a good thing, frankly, because I think it allows us to go after the highest returning and most ROE-friendly and earnings per share friendly opportunities that exist.

Bill, it's Craig. I'll start by highlighting investor interest in private credit, which continues to be strong. In direct lending, spreads have certainly narrowed. However, when looking at new direct lending deals, given the current base rates over the last three months, we are still seeing rates above 10%. In asset-based finance, there are several positive macro factors at play, as Chris Sheldon discussed a few weeks ago. We are active in both investment-grade asset-based finance and opportunistic financing. As of March 31, private credit for KKR amounted to $93 billion in assets under management, a significant increase from $76 billion a year ago, marking a 22% year-over-year growth. Additionally, regarding fundraising activities, we are witnessing growth across various channels. It's encouraging to see the institutional, private wealth, and insurance sectors contributing, as well as multiple forms of capital such as traditional funds, separately managed accounts, and perpetual structures, both in the U.S. and internationally. This broad activity is reflected in our performance this quarter. In direct lending, we've raised evergreen capital in both the U.S. and Europe. For opportunistic asset-based finance, we have also raised capital. In Asia private credit, we've been successful in capital raising, and we remain confident about the opportunities available given the strength of our Asia franchise. Moreover, we recently launched our private BDC strategy within our K Series suite of products. Overall, we feel there's a healthy momentum that is widespread across the firm.

Bill, it's Scott. The only thing I'd add is in addition to the organic fundraising that Craig ran through from third parties, we mentioned in the Investor Day the symbiotic relationship between Global Atlantic and our credit business in particular. We're definitely seeing that show up in the numbers as well. And it's also allowing us to see how our third-party insurance AUM as well at the same time. So it really does feed credit, and it has historically. What I think you're going to see over time though, and as Craig mentioned this, is that we are going to see GA also starting to do more across asset classes like real estate and infrastructure, especially on the core side. And as we mentioned last November when we announced that we're going to 100% ownership of Global Atlantic, that's one of the opportunities that we saw, we're just getting after that now. So I think you'll see it not only show up in credit, but in some of the real asset lines as well.

Brian, it's Rob. I'll start off. Plus or minus $20 million Strategic Holdings operating earnings, a pretty good level to model for the remainder of the year. As we move forward and get closer to $300-plus million by 2026, I think you'll see a little bit more stability in that line item quarter-to-quarter. Might bump around a little bit in 2024, but plus or minus $20 million is about right. And as it relates to our core private equity strategy, listen, we are the largest core private equity manager today globally by a good margin. We think we've built because of our investment teams, our geographic reach, our industry gap, our collaborative culture. We've really built a best-in-class franchise, and it's something that I think we certainly be excited about continuing to partner with our clients on over time. Glenn, it's Rob. I'll start. I think you hit on it in your last remarks there. It is not a need-to-have for us. And so we want to be in businesses where there are large addressable markets, and we've got conviction, we can be a top 3 player. Of course, over time, we've looked at the secondary space. You could assume that most every M&A transaction that's happened in the secondary space has come across our desk here. And either we determined it wasn't the right partner to be a top 3 player or we determined that we just weren't willing to pay the price that was prevailing in the market. And so we're perfectly comfortable focusing on the aspects of our business that we're already in today. With that focus, we think we can be uniquely great at the things that we've already started and that provides more than enough running room for growth going forward. Yes, sure. Thanks for the question, Patrick. So I'd say that if you look at the flows at GA this quarter, probably about 75% from the institutional side of our business, give or take. Again, that's inclusive of the big block transaction that we did in the quarter with Manulife. We've had really good momentum on the individual side of our business as well, with very strong sales both in Q4 of '23 and again in Q1 of 2024. And then on the PRT side, pension risk transfer side, we've talked about this as being a medium to long-term opportunity at GA. We really, coming into this year, did not have very much exposure here at all, but we have a team assembled against the opportunity, and we continue to believe that it's a really big opportunity given the capability of our Institutional Reinsurance platform for us to be able to take some share again starting off of a very low base. Sure, Dan, it's Rob. I'll start. So what we're seeing in the GA business is really strong performance, really strong operating performance, and really an even stronger outlook for the future. What happened in Q1 or what transpired from a P&L perspective in Q1, very much by design. When you complete 2 very large block deals north of $20 billion of assets, you're going to take on the cost of those liabilities day one. But we really have a 12- to 18-month period where we've modeled redeployment of the assets into higher-yielding investments. And we're operating at higher levels of cash balance. That was point one. Point two is a really interesting one, Scott started to touch on it a little bit earlier. We're seeing a really interesting opportunity in core and core plus real estate right now. There is just almost no core and core plus real estate capital out there. And we're able to create really attractive unlevered returns by leaning into that asset class. But one of the downsides of leaning into that asset class is a near-term downside in that the running yields on those investments tend to be in the 4%, 4.5% range. But we think those investments will certainly more than pay off in terms of the longer-term ROEs that they could generate. So much like how you'd hear us talking about investing in the near term for benefits of long term across everything we do, that would be a really good example where you could see some dilution to ROEs in the near term, but we think that are more than going to benefit Global Atlantic, its policyholders, ultimately our shareholders, in the long term given the attractive risk-adjusted returns we're seeing there.

Yes. The only thing I'd add, Dan, is that none of this is a surprise. I mean, we closed on $23 billion worth of block transactions. And when we price these deals, we assume there's going to be a ramp period. So that's proceeding as we expected. And I think the business overall is performing incredibly well. Both on the institutional side and the individual parts of GA, we're seeing a significant amount of growth and a significant amount of opportunity. And I think to the crux of your question, so far, the dollars that are getting deployed in the investment portfolio were hitting our target return levels. So it's just a rotation and it will take a little bit of time to get this money to work, but we feel very good about the progress of the trajectory.

So why don't I start first. I think as it relates to SRTs, it is a market we are active in. It fits in our view, very well with our ABS strategy. We're knowledgeable across a host of assets, and we do like to partner with the banks. As you note, I think that activity has mainly been EU-focused. It does feel like we are starting to see more activity in the U.S. It also seems like the potential opportunity set could be expanding. I do think the most common underlying assets for SRTs have been in corporate loans, fund finance facilities, consumer term loans, it does feel like banks are beginning to explore opportunities across other asset classes. And then I think the other point that you touched on, which is very important, is just this big macro tailwind we're seeing in that opportunity that it affords us and our team. Again, you look at the growth in our ABF platform as a whole, we're over $50 billion of AUM at this point in time. That's both opportunistic together with more investment-grade focused ABS strategies. And in terms of total deployment in a quarter like this one, we've overall as a firm have deployed a little over, round numbers, $3.5 billion of ABF activity in Q1, which is a pretty elevated pace for us. So activity does continue to feel like it's at a healthy level.

Part of the reason, Steven, that we spent so much time on this part of the business at the Investor Day is we do think this is a really interesting and sizable opportunity. Direct lending is really interesting as well in private credit, but asset-based finance is a much larger market, probably a $5 trillion market on its way to $7 trillion to $8 trillion. And it encompasses a significant number of asset classes, and you really need to have scale to be able to do it well. And so we talked about our 19 or 20 platforms better part of 7,000 people working at those platforms. I think you're going to see that business continue to scale at an attractive pace. And pleasingly, we're also seeing institutional investors understand this part of credit much more than they did a few years ago. So we are seeing this trend spread from Europe to the U.S. on the risk transfer side. I think that just speaks to the fact that deployment opportunity will continue to be robust. And banks are trying to free up capital, whether it's for M&A or to redeploy into other areas that they find interesting. So we've got plenty of opportunity here.

Yes. Brian, a few thoughts. When you look back at 2022 and 2023, really tough operating conditions for our Capital Markets business. And for much of that time, Capital Markets on the equity side, on the leveraged finance side, were largely shut. And our business generated ballpark $600 million of revenue in each of those 2 years. And so we're really proud of the durability of the franchise that we created. As I look at our pipelines today for the remainder of 2024, we get updated pipelines weekly, our pipelines are a lot better today than they were at this time last year. Now there's a lot to go execute on between now and the end of the year. But the forward indicators for our capital markets business sitting here in early May are definitely better than they were in May of 2023. And then more to your question around the longer term. If you look back in 2021, our Capital Markets business generated, a ballpark, $850 million of revenue. And clearly, you had buoyant capital markets that helped in 2021. But if you look at KKR today as a firm, we do more today than we did in 2021. I believe we have greater market share with our third-party clients than we did in 2021. And we've talked about the real opportunity to scale what we're doing in coordination with Global Atlantic. So when you combine all that, we continue to be really optimistic about what we're going to be able to create over the next several years with our Capital Markets franchise that is truly a unique business relative to any of our competitors out there right now.

Yes, so Brian, we've been in this business since 2006. And over that period of time, what you see is that the revenue tends to be quite correlated with deployment and monetization, especially in private equity and infrastructure. So if you go back to the prior discussion around the fact that our pipelines have picked up significantly, especially in those areas, and we're seeing more activity on the monetization side as well as the markets open up and strategic buyers come back. I think that bodes well. We had $800 million plus of revenues at KCM at a period of time where we had less dry powder, we had less overall AUM, we had less firm activity. So as the markets open back up, our expectation is we'll do better than that, but it's going to be somewhat dependent on deployment and monetizations across the firm. But it looks pretty good as we sit here today.

I'll start, Mike. You've highlighted many key points. The asset-based finance business has changed significantly since the Global Atlantic acquisition. This is a sector where scale leads to more scale. We've seen tangible benefits from our partnership with GA and other third-party clients. An essential aspect has been the platforms Scott mentioned and Chris Sheldon discussed during our Investor Day. When considering those 18 or 19 platforms, they are global, with around 7,000 personnel aiding us in sourcing and originating unique deal flow for our clients going forward. Are we looking to expand our network of platforms? Yes, but I wouldn't suggest it will be double what it is today in two years. However, there are continuous opportunities for us to grow and enhance our scale. Another key point, as Scott noted earlier, is that client awareness of this opportunity has increased significantly. It seemed that for a while, sectors like infrastructure and direct lending required substantial client education, which can happen gradually. ABF is an unusual asset class, having existed for a long time, yet it hasn't been viewed distinctly by many of our clients in relation to their portfolios. As our strategic position has improved considerably, client knowledge is also rising, which is reflected in our results.

Michael, it's Scott. I think we'll add more platforms, though probably not as many as we have. We will enhance resources for the existing platforms. However, it's important to remember that these businesses are already in the market sourcing investment opportunities. To some extent, I view it as being constrained by capital rather than opportunity. As we continue to grow our capital base, we can achieve more with the current origination platforms we've established. It's less about needing to add numerous resources and more about taking greater advantage of the current flow we're experiencing. Furthermore, as Craig mentioned, private credit has become a more recognized aspect of our operations, and as private credit allocations are established, more work is being done in this area. We are observing an increase in allocations to direct lending and ABF as part of this trend. We've noticed a similar pattern across other asset classes; as these allocations are formed and clients aim to reach their targets, we typically see significant capital formation as a result. We believe we are well-prepared for that.

Great. Thanks for the follow-up, Patrick. So today, we've got north of $400 million of visible pipeline as it relates to monetization, call that roughly 60% carry, 40% investment income. As you noted, our pipelines are pretty healthy. As we look at that $400 million, I should be clear, it's not certain that all if that's going to close in Q2. Some of that's got some regulatory approvals as part of that. But as we look at our pipelines, they are better on the monetization side than they've been at any point over the past 12 to 18 months. I can't really comment on what others are saying. I could just comment on what we're feeling across the firm. And I'm not sure to be all that much of a surprise. We're seeing the leveraged finance market come back. You're starting to see CLO formation sit behind the leveraged finance market. And that all creates additional dry powder in the system for deal activity, which is the fuel for greater monetization. And so we'll see. There's a lot to get done in order to monetize the pipeline. But at least for KKR, we're feeling relatively constructive versus where we had been over the last 12 months.

Yes, Patrick, I’m not sure why you’re sensing a different tone. The markets might exhibit some fragility, and there is considerable concern regarding geopolitical risks and the overall macro environment, which could contribute to that perception. Our insights are based on the current state of the environment as we perceive it. However, if unforeseen events occur, the situation could change. It’s possible that our portfolio is more global and perhaps more mature than others in certain areas. We are experiencing these challenges firsthand in the ongoing discussions we are having.

I would just like to really thank everybody for the time that you've invested in KKR. When we think of the announcements we made in November and at the Investor Day just a few weeks ago, and then together with our Q4 and Q1 earnings, we've been very active in taking a lot of mind share from everyone. So thanks for your investment in understanding KKR better. And please follow up with us directly with any follow-on questions. Thanks so much.