KKR & Co. Inc. (KKR) Q2 2026 Earnings Call Transcript

ladies and gentlemen thank you for standing by welcome to kkr's second quarter 2026 earnings conference call during today's presentation all parties will be in the listen only mode following management's prepared remarks the conference will be open for questions at that time if you'd like to ask a question please press star one on your telephone keypad i will now hand the call over to your host craig larson partner and head of investor relations for kkr craig please go ahead.

Thank you, Operator.

Good morning, everyone, and welcome to our second quarter 2026 earnings call. This morning, as usual, I'm joined by Rob Loon, 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 this quarter Rob's going to begin by reviewing our key growth drivers as a firm and how those are impacting our results and afterwards I'll review our Q2 results in more detail and so with that I'd like to hand the call over to Rob.

Great, thanks a lot Craig. We've been in an environment with a lot of volatility and noise around back today better position than ever to drive differentiated earnings growth. Our confidence here comes from four key secular and structural growth drivers. What is particularly encouraging and what I will walk you through in the second is that we continue to see these drivers play out in our operating results as well as our financial by laying out our framework with multiple mega trends of asset management industry has been growing at a health we expect that to continue well into the future we are in the midst of a global capex digital and energy so massive needs here for capital on a global basis be increasingly relevant from a geographic perspective we continue to see significant opportunity in asia the asia pack region today is one of the most dynamic parts of the world and represents roughly 60% of the expected global GDP growth. It is the area where alternatives are the least penetrated relative to the U.S. and Europe, creating an enormous opportunity across private... Simultaneously, we are experiencing significant demographic shifts with an aging population that is in need of retirement solutions. The number of people aged 65 and up around the world is expected to roughly double between now and 2050. and more individuals are investing for their own retirement. Positioned against that backdrop with multiple identifiable growth avenues across our platform. Just to take you through a few of them, we have one of the largest infrastructure platforms in the world at approximately $120 billion of AUM. From that demographic shift and need for retirement solutions in both our insurance and our wealth businesses, In GA, we see significant opportunity to grow both in the U.S. and internationally, especially in markets like Japan. We remain bullish around the likelihood of individual investors allocating more to alternatives over time and believe we are still in the earliest days of this theme playing out. We have a differentiated presence. We are the largest private equity player. We're the largest infrastructure player. We have rapidly growing real estate and we see a huge opportunity. We have built a platform over the past 20 years that cannot be replicated, our geographic cover, as well as our existing footprint, which includes nine offices and nearly 1,000 people on the ground in the region, over 200 of whom could really go on here. We have a world-class, we have a leading asset-based finance platform. We are seeing increased demand in private investment grade and are incredibly well-positioned. With the acquisition of Arctos, we believe we can scale KTR solutions to over 100 billion of AUM is our differentiator. We have been very purposeful in building a business model that allows us to meaningfully grow our earnings and share price over the long term without requiring us to significantly increase our head count or sacrifice our culture. In our asset management business, there is substantial growth in front of us and we have been intentional about creating additional ways to take full advantage of the broader KKR 10 to 20 years. That is why we also have an insurance business and strategic holdings both of those segments leverage many of the core competencies that we have built up in asset management over the past 50 years including our investing acumen our access to differentiated capital brings me finally to that unique culture and how it could be a real accelerator we run kkr as one firm with one compensation approach relationships travel ideas travel lessons learned travel our culture creates much of our investing alpha which is why we have built a business model that allows us to keep the firm small and maintain that competitive advantage importantly kkr employees also own approximately 30 percent of our context the other companies in the s&p 500 have an average of approximately two percent that fundamentally shaped and long-term value creation. We are incredibly well aligned with our shareholders. I will walk you through some examples of how these drivers are showing up in our results. Example of a secular tailwind and how we are positioned. AI and the need for infrastructure build-out behind it will require trillions of dollars of investment. To date, we have committed and invested over $75 billion across digital infrastructure. Our existing infrastructure funds carry diversification guidelines that limit how much we can dedicate to a single theme relative to the scale. We formed Helix Digital Infrastructure, which we announced in June, with over $10 billion of initial long-duration committed capital. Helix is an AI infrastructure company that delivers coordinated data center, power, and connectivity to hyperscalers. It is a perpetual open-ended vehicle. KKR will earn management fees and performance fees. Alongside our infrastructure team, Helix is led by Adam Slipsky, who is the former CEO of Amazon Web Services, the world's largest cloud business, and deep insight into hyperscaler priorities. NVIDIA and Vistra joined us as important strategic partners, and together with Kuwait Investment Authority and KKR as founding investors. KCARE's tracker expertise with the execution capabilities at Helix, we believe that we have unique positioning against what is a mega trend. Growth avenues and funding has been tangible. April 2024 Investor Day, we set out a three-year, $300 billion fundraising target. That was an ambitious number for us at the time, given our size. Since the beginning of 2024 through June 30th of this year, we have raised $305 billion of capital with $34 billion coming in in Q2, so beating our three-year target in just two-and-a-half. In those two-and-a-half years, we have seen significant AUM growth. Private equity increased approximately 45%. Credit business is up roughly 35%. Asia increased over 30%. Third-party insurance is up over 50%. Wealth increased six times, and we are still in the earliest of the days. And with the closing this quarter, we now manage approximately $20 billion of capital through Arctos with significant abroad-based fundraising success relates to capital. A common narrative that investors hear is that our industry isn't returning capital to investors. This is just not accurate. We've actually had an acceleration. The second quarter was the largest monetization quarter in our history. Let me turn your attention to page 21 of our earnings release. You see some of the activity in just this quarter alone. as well as transactions that we've announced but have not yet closed. Importantly, exits have been diversified across strategies, regions, and exit type, and reflect strong returns with multiples ranging from two times to up to 20 times. Success here speaks to the quality and maturity of our portfolio, the strength of our operational teams, and the collaborative culture that our heightened level of monetization activity over the last three years. The remaining unrealized gains in our portfolio have continued to grow and today stand at roughly $18 billion. Now, let me address our differentiated business model and some of the impacts that we are seeing in our results. In Q2, our FRE margin was 70% and has been over 65% for the last 10 consecutive quarters and we do not view that as a success. The reason for that goes back to that we have no ambition to be all things to all people in asset management. We want to be great in the areas that we are already present, and we have a lot of confidence as a management team that we will be. We are going to continue to grow our revenue at a pace that meaningfully exceeds our headcount and expense growth. We're starting to see that operating leverage flow through our financials, and when we look to future earnings growth, we still have significant latent earnings within our asset management, insurance, and strategic holding segments. We have a record amount of capital on which we are not yet earning fees, with $72 billion committed, and that is up almost 30% since this time last year. And it has a weighted average management fee of about 90 basis points that turns on when the capital is either invested or enters its investment period. And second, our average annual performance income eligible deployment over the past five years has more than doubled versus the prior. And it is that more recent deployment that is going to drive future performance-related income. So significant visibility into future earnings growth. In insurance, given we report largely based on cash, we've been focused on elongating GA's liability profile and in turn growing, which we are showing on a cash outcomes basis versus mark-to-market. Including the impact of mark-to-market, insurance operating earnings would have been north of $600 million year-to-date. And looking at strategic holdings, our existing portfolio and activity gives us confidence that we could scale strategic holdings operating earnings from 187 million over the LTM period to 1.1 plus billion by 2030. This quarter we made an important structural performance fees earned from this vehicle within fee-related performance revenues within our segment earnings, which is subject to a 15 to 20 percent compensation rate. Historically, these fees were included within realized performance income and we're subject to a 70 to 80 percent we feel this change conforms to current industry practice and enhances comparability for investors and rate impact this change structurally increases cake errors forward earnings per share and I think further reflects our commitment we do think like shareholders first you have tremendous confidence in our forward monetization pipeline and our ability to generate differentiated performance its outcomes, which gives us the confidence to make changes like this to enhance long-term earnings, multi-decade secular tailwinds, multiple growth avenues across geographies and asset classes, a business model that allows us to compound earnings over a long period of time, and a culture built on alignment and long-term outcomes.

We are confident in our ability to drive differentiated earnings growth for many years. and he's going to walk you through our record q2 results in some additional detail in short you're seeing continued performance at a first for the quarter we're reporting record results across all three of our headline financial metrics over the trailing 12 months ltm results for all three of these metrics also set historic highs and in terms of our key operating metrics new capital raised over the LTM, as well as capital invested over the LTM, outpacing again any other 12-month period in our history. Looking more specifically at Q2, FRE per share came in at $1.32. That is up 34% on a year-over-year basis. Total operating earnings of $1.68 per share are up 27% year-over-year. and adjusted net income per share of $1.63 are up 38% year-over-year. Going into the P&L in a little more detail, management fees and management fee growth continues to be strong. For Q2, management fees were $1.2 billion. That's up 26% year-over-year. Excluding catch-up fees in both periods, this activity has been driven by both our fundraising success alongside continue healthy deployment. So spending a minute on these two topics first on fundraising as Rob mentioned a moment ago We raised 34 billion of new capital in the quarter with demand really widespread across asset classes and geographies And that brings capital raised over the LTM 233 billion it's worth beginning with infrastructure and taking a step back for a moment You've seen us raise approximately 45 billion of capital for our latest vintage funds and and new initiatives as the platform continues to expand. That includes Infra 5 and Asia Infra 3, which as of June 30 are at $25 billion and counting on a combined basis, plus Helix, which Rob touched on a few moments ago, our global climate transition strategy, as well as capital raised over the LTM at our K-series Infra vehicles and our diversified core Infra strategy. Ultimately, these figures highlight the breadth and depth of our seeing capital raised for different geographies, different risk reward, and through different distribution channels, as well as, crucially, our track record of delivering on the inflows across our K-Series have rebounded nicely after the April lows. In total, we brought in $3 billion of capital in Q2, and K-Series AUM now stands at $42 billion compared to approximately 25 a year ago so up almost 70 percent year-over-year and all of the noise around wealth KKR's experienced healthy net inflows with total k-series AUM year-to-date through June 30th we're reaching new milestones the largest first-time fund in the broader GP solution space and the first fund closed since KKR completed its acquisition of Arctos back in on the investing side we deployed $24 billion of capital in Q2, bringing us to $104 billion of capital invested over the LTM. So healthy investment activity this quarter really diversified again. Turning back now to the P&L, total transaction and monitoring fees were $221 million in the quarter. Capital markets fees were $178 and fee-related performance revenues were $205. Performance revenues erupt meaningfully year over year driven equity k-series vehicles and as rob walked through this is the first quarter that the crystallization from private equity wealth is sitting within frp related compensation was again right at the midpoint of our guided range which as a reminder is 17 and a half percent other operating expenses for the quarter came in at 210 million so in total fear related earnings were a billion two or the one dollar and 32 cents per share figure that i mentioned a few moments ago nrf re margin came in just above spending a few moments on insurance segment operating earnings came in at 288 million in q2 three things of note here first we had approximately 40 million of net realization activity in our alternatives book in the quarter we've noted historically on these calls how we report based on cash outcomes for the alternatives portfolio with ga seasons and realizations occur you should expect to see gains run through the P&L and provide a lift to our reported operating earnings and that's what you saw this quarter now we don't think that 40 million is a quarterly run rate figure for us as the ALS portfolio is still quite young and it's maturing but it's certainly a positive sign of a trajectory that we see over time as a reminder insurance segment operating earnings alone do not capture the impact of GA recognizing the economics that are part of our of asset management and this is really important slide 17 of our earnings release outlines our total insurance economics so alongside insurance operating earnings we receive management fees under our investment management agreement fees from ivy related vehicles where we have 62 billion of a way 50 billion just a year ago as well as GA related capital markets fees which we think can reach hundreds of millions annually over time. So considering all of these pieces, total insurance economics were $2 billion net of compensation over the 13% versus the prior period, and that growth rate would have been higher. Finally, it's worth emphasizing how well GA is positioned strategically because of our ability to bring together liability origination and asset origination. On the liability side, our decades of experience and well-established insurance franchise provides a differentiated base of long-duration liabilities across products and geographies. And on the asset side, KKR's origination engine, including 20 proprietary ABF platforms with more than 7,000 employees alongside of our globally integrated investment teams, allows us to originate and tailor bespoke. and we also believe we can we can scale our insurance business globally particularly in asia and distribution capabilities position as well turning out to strategic holdings operating 37 million in the we continue to have a lot of confidence in the 350 plus millions for 2026 with that activity as we've expressed previously 2026. so all together total operating earnings or the more recurring components of our earnings streams were $1.68% year over year. 84%, again, 84% of our total pre-tax segment earnings were driven by these more recurring earnings earnings streams, which again, we feel demonstrates the durability of our business model. Moving to investing earnings within our asset management segment, we had the highest monetization quarter in our history with realized performance income of $848 million, income of $220 million, which we added slide 21 to our earnings release to all of the realization activity, together with the gains that sit on our backstand at $18.2 billion. After interest expense and taxes, adjusted net income was just about $1.63 per share figure I mentioned at the beginning of my remarks. Turning to investment performance, page 10 of the release highlights the broad-based performance we continue to generate across additional PE our portfolio appreciated four percent in the quarter and nine percent over the performance was led by our America's portfolio with strong appreciation across both our public and private investments across the remainder of the platform our infrastructure portfolio appreciated one percent in the quarter and eight percent over the last four months opportunistic real estate was down modestly in the quarter but remain positive over the trailing 12 months while both our leveraged credit and alternative credit composites generated positive returns in

the quarter and appreciated 5% over the last year so in summary we had a strong Q2 and we have a great deal of momentum as we enter the second half of the year and with that at this time we'll be conducting a question and answer session if you'd like to ask a question please press star one on your telephone keypad a confirmation tone will indicate your line is in the question queue you may press star 2 if you'd like to remove your question from the queue. We ask that analysts please limit to one question and return to the queue if they have a follow-up. For participants using speaker equipment it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from Alex Blosin with Goldman Sachs. Your line is now live.

Hi, good morning. Thanks everybody for taking the question. A bit of a high level question for us for you guys. So when we think about KKR's management for growth trajectory, really strong 2026, obviously in the back of a number of larger flagships kind of hitting the run rate. As you look forward into 27, maybe it would be helpful to just take a step back and talk through some of the biggest drivers of management for growth into next year, given the tough comps from 2026 and how do you think about the kind of multi-year management fee growth algorithm in the business broadly thanks great thanks a lot Alex of our business including now take care solutions where we're just

getting going multi-year maybe I'll take the opportunity of your question to just maybe get a broader sense not just management fees but how we're just feeling overall and how we're seeing things you know we've been public 17 years Joe and I've been here 30 you know you and I've talked about our space is subject to periodic bouts of external pessimism and periodic bouts of optimism in our time here I don't recall a period of time where the external perception is so disconnected from the operating fundamentals and how it feels inside the firm and in our experience the best response to pessimism is performance and so we're largely inclined to let the numbers do the talking but we also recognize all the external narrative we sympathize with how hard it must be to try to decipher what's what so i just want to spend a second going through kind of what we hear anyway is some of the sources of pessimism that you may be getting barraged by and kind of how it feels inside the firm and there seem to be i'll put it in five buckets uh first is private credit um anxiety about that space for us uh we expect a record third-party credit fundraising year concerns and tends to be private wealth we've all seen a lot of articles about redemptions anxiety about the forward opportunity and whether it's different than everybody thought a year or two ago as the guys mentioned private wealth AUM up 70% last 12 months even more importantly over 20% in the first half and we've seen a meaningful rebound from the April lows well you don't read about in the articles there's the inflows but we're up 20% net year-to-date third bucket of concern tends to be private equity monetizations aren't happening you saw the results you're the narrative record monetization year for us for this software it's all going to be disrupted by AI it's about 6% of our AUM we sold one stream which is a software business for four and a half times our cost earlier this year and we're still seeing high single-digit LTM revenue and EBITDA growth and then the fourth you know the fifth thing I'll say is the four big buckets of anxiety lead to an overall concern that this is going to slow down fundraising and a year today we're ahead of expectations record LTM fundraising we expect a record fundraising year for the firm and our momentum feels like it's accelerating so you put all that together net income up 40 percent in the quarter 30 percent in the first half so acknowledging not everything's perfect everywhere all the time but wanted to share kind of a little bit about it feels inside the firm right now our industry is increasingly k-shaped most of the external focus is going to be on the unhappy part of the K. We find ourselves on the happy part of the K, and that's what's showing up in the numbers. But thanks for that, Chris.

No, thank you for that perspective.

Our next question comes from Craig Seigenthaler with Bank of America. Your line is now live.

Good morning, Scott. Rob Craig. Hope everyone's doing well. And Scott, I really appreciate your perspective on that last one um our question is on global antic and it's a two-parter how is ga's organic growth outlook evolved across retail annuities flow reinsurance blocks and the institutional channel and can you also provide an update on the are we trajectory just given higher competition than prior years thanks greg yeah i'll go titian um we've made the

determination that we're going to allocate a little bit. What we did in Q&A, 99% of those liabilities were at least five years in duration. Approximately 80% of those liabilities were seven years in duration. So it's allowed us then to in turn start, you know, in turn that is probably going to lend itself to less competition on the liability side. And so from our perspective, we spent a ton of time figuring out how is it that we can make sure that we are competitively advantage in how we set ourselves up longer duration liability and companies in the world are able to do that then we're incredibly well positioned that's why when you think about ROE's and insurance we think it makes sense to look at that through a cycle and we're at a period of time here where we think ROE's are structurally low given the competition on both the asset side where spreads are and on the law.

Thanks Rob.

Our next question comes from Glenn Shore with Evercore. Your line is now live.

Hi thanks very much. Scott I want to follow up on your first comment in the open remarks was about the in the midst of a mega capex mega cycle and AI power I think a lot of us agree but the market certain days like yesterday and the day before feels more like we're overbuilt we're priced in spending is going to come down cash flow is going to come down so I think it has that schizophrenia in terms of where we are in that cycle so so curious on a what you think of that and B how does that impact if any what risk you hold for clients and on balance sheet as you think about

this you know next industrial revolution and fully monetizing the wave versus managing that risk I appreciate the question Glenn and you're right it there is a bit of a schizophrenia out there I'd say net answer for us is we actually think this is a huge opportunity for us as a firm but as ever when you have these kind of mega themes there's ways to do it well and there's ways to do it less well and so we're focused as a reminder not so much on investing and what's going to be the next chip company or the next LLM it's more about the opportunities around this development in particular from an infrastructure and real estate and credit standpoint so it's kind of around the space and there's a maybe I'll ask Craig to kind of give you some of the details on what we've been up to in particular in power and data centers and how we've kind of thought about navigating what's going on right now yeah I think one of the things and you're right we are at this very interesting moment in time so hypers have widened pretty meaningfully just over the last couple of weeks, that stands in contrast to the broader IG markets, which, again, still pretty much remain at their tights.

And we've had year-to-date this flurry of jumbo deals. I saw a note a day or two ago, I think we've had more $25-plus billion deals year-to-date than the last five or six years combined. And so it does, it feels like there's indigestion. And so to just echo what Scott said, I know our team's going to be consistent. And I think all All the things that you're going to see from us are going to ring true to what we said historically. We're going to care about our counterparty. We're going to care about contract terms. And it allows us to be selective. And in that context, the volatility we're seeing, we think is helpful for us. And while the data center piece does get a lot of the press, again, the digital themes are much broader, fiber networks, mobile infrastructure. We've been very active across renewables. again Rob gave you some of the stats earlier and that's in addition speaking about our infrastructure more broadly around things like electricity and gas transmission and wastewater networks etc so again there's it just feels like there's a lot to do even in spite of the volatility that we're saying thank you our next question comes from Devin Ryan with Citizens Bank your line is now live thanks good morning appreciate taking the question here I want to ask a question on Arctos, obviously, some really nice momentum kind of after the transaction

close and with Keystone, I think just kind of an early example of kind of seeing the benefits of KKRS distribution and kind of the broader client network. We'd love to just kind of more broadly think about the potential for the business as you think about kind of the next sports kind of flagship and then just more broadly just how it connects to the path to kind of getting that solutions over $100 billion of AUM.

You hit on some of what we're building in Keystone. And then as you think about the opportunity on the secondary space, people, the connectivity, and what the Arctos team brings to the table combined with what we bring to the table on the KKR side between relationships and industry expertise, we believe that we can build a really world-class business. And then finally, the opportunity that maybe is a little bit more hidden but we think is very real is the opportunity for the – you know, we feel really good about the target of $100-plus billion of AUM from our solutions business over time and feel great in the early days of how we're coming together, culture working together to be able to make sure that we are optimizing the combined footprint.

Yeah, Devin, Scott, just the way I think about it, you got three businesses sports fast-growing incumbent already the largest player but the space is young GP solutions run fund one we have a differentiated model seems like there's a ton of opportunity and growth ahead pipelines big and then we have a third space secondaries which is the startup up in a very large TAM. I don't know how the 100 plus billion is going to break down, but we see lots of different ways to get there.

Excellent. Thank you.

Our next question comes from Stephen Tripek with Wolf Research. Your line is now live.

Rob Craig, hope you're all well, and thanks for taking my question.

Thanks, Stephen.

So I wanted to ask on the retail strategy. I know that you touched on this a bit in the prepared remarks. K-Series, private equity, and infra vehicles continue to generate really strong flows. You're benefiting from being less indexed to credit where fundraising headwinds have been more acute. But given the elevated redemptions year-to-date, commentary suggesting that redemptions have also been more concentrated across a subset of international investors, whether the recent turmoil has reshaped your approach to expanding retail distribution abroad, if you could speak to the pipeline of new distribution platforms and how it informs the outlook for retail flows over the next six to 12 months that would be great hey steven it's scott i'll take a shot so um yeah you're right i mean we've we've been reading all the news articles as well um as i mentioned before i mean we're they tend not to mention the inflows um so that's kind of the fact we're up over 20 year-to-date net uh is usually lost uh from an external standpoint but that those

are the numbers uh and we see a lot of momentum i mean i think there's a couple things going on with us you know we've kind of roughly 85% of K series is in private equity and infrastructure today so that's maybe a bit different than what others have in terms of exposure we are continuing to build out our Asia and Europe platform and relationships we probably on the margin have a bit less from those markets although it's roughly 40% of kind of what we've been doing as of late from outside the United States but in terms of the build of the team and the relationships those are still building outside the US and we think there's lots of opportunity ahead the short answer to your question it is that it has not changed our perspective on investing in growth I actually think this is long term very healthy that advisors and clients understand what these products are and are not and most people are experiential learners so I think this is great news that while it is a very small percentage of our firm a fast-growing small percentage of our firm I'd rather people learn well it's this size as it pertains to our space as opposed to a very large percentage of our space and so I kind of view this as a healthy educational period and if

anything because of that we would be more comfortable investing even more and having it be a larger percentage of the firm down the road then I would have been if these lessons had not been learned our next question comes from brennan hawkin with bmo capital markets your line is now live good morning thank you for taking my question um i know that you uh reiterated the earnings uh target for strategic holdings and your prepared marks but you know at this point and you also said back and loaded but it really is quite hockey stick looking really so i'd love to know what drives the confidence. Moreover, some investors have expressed concerns that the investments you have in that portfolio could be at risk from AI. And the AI risk, I know you touched on software, but business services, we see a lot of sectors trading as though they have some disruption risk there. So if you take a wider lens about the AI risk, how would you address those concerns sitting in that portfolio. Thanks.

Great, Brendan. Thanks a lot. If it was in the early years, that's when you're going to start to see your holdings being more what we need to get done to generate the operating earnings will get done, you know, continually to perform at a high level. And this is not necessary.

Thanks for that color, Rob.

Our next question comes from Michael Cypries with Morgan Stanley. Your line is now live.

Hey, morning. Thanks for taking the question. Just wanted to ask on private wealth, which I think has exceeded your expectations there, despite some of the recent volatility. But I guess as you look out over the next couple of years, just curious what you see is ultimately driving the greatest impact on adoption rates and penetration within private wealth, whether it's evolving technology or new wrappers what do you think could be the most meaningful to really scale private wealth adoption more more broadly in the chat hey Michael Scott let me take a shot so honestly I think the first thing is education just spending time making sure advisors and their clients understand what private markets is and the different forms of it whether it's

private equity infrastructure real estate or credit and you know we are running multiple it seems lately KKR academies a week having a hundred advisors at a time come in spend a dinner and a day with us and a lot of the answer to your question on adoption is spending time with them so they understand what it is that we actually do and that I think has been the most important thing to try to get right we've invested a lot in that over the last few years and that's a global effort we're running those US Europe and Asia the second thing I would say is obviously you need access and you need distribution which is back to the discussion we had about the relationship with platforms around the world and so you need to actually be on the platform be approved and then do that education so at building those relationships and we're watching that closely as to how many different platforms and RIAs our products are on by product type and those numbers are accelerating up into the right at a very rapid rate the third thing I would say is it's also the type of investor I think as we've talked about on these calls K series is built to be able to go to the accredited investor in the US which is a million and up in net worth that is a single digit percentage of US households the other 90 plus percent K series is not relevant to today and so that's where our partnership with capital group comes in because we want to further extend our reach and our distribution relationships and you know they have relationships with 220,000 of the 300,000 advisors in the United States if we spend another 50 years at K care I'm not sure we could build that kind of relationship and trust with that kind of penetration so that's the other thing that we're doing. We think that'll take time to pay off, but in the long run, we'll meaningfully expand our efforts. Hopefully that gives you some color.

Our next question comes from Bart Zarsky with RBC Capital Markets. Your line is now live.

Thanks, and good morning, everyone.

I wanted to ask, you recently made an announcement you added Roy Gorey as a senior advisor. Maybe just walk us through the strategic rationale for that and how his experience as former CEO of Manulife could help you achieve your Investor Day target of doubling GA AUM? Thanks.

Thanks for the question, Bart. You know, Roy, we've known for many years. He did a remarkable job as CEO of Manulife for that. Amongst other things, he built their Asia business as lived and worked all around the world. And we got to know him first as a client and just really enjoyed the engagement a lot of wisdom and a lot of experience in terms of how he built with his team that business and sometimes you spend time with people and you realize they can make you better and so when he stepped down we asked if he wanted to spend some more time with us helping advise us on how we think about all things KKR strategically insurance and otherwise as I think we've discussed before you know global Atlantic by name is a bit of an aspirational name most of the business today is in the United States if you kind of think about the footprint of our insurance business relative to all of KKR we have half our investment professionals roughly outside the United States at KKR and so we're thinking actively about what is there to do outside the US and insurance we think Roy can be quite helpful with that topic amongst many others in particular in Asia where we're starting to spend quite a bit of time together so hopefully that gives you a little bit of background but um we just think he's going to make us better at what we do very helpful thanks our next question comes from bradley hayes with td cowan your line is now live hi good morning you spoke to strong demand for private ig could you maybe

dig in a little more on your positioning against the opportunity and perhaps focus a little more on the origination platforms in particular please craig why don't i start so i think first of all look, the opportunity is massive.

I think you look at the addressable market and credit, it's $45 trillion. And we're all seeing headlines every day with issuers increasingly turning to private market solutions. I think in terms of our business and how we're thinking about it, we look at private IG as all we are doing in asset-based finance, plus bespoke solutions for large established corporates, plus long duration investments across real estate. And when you think of the capital that we have organized against that, it's Global Atlantic, it's through our funds, it's through SMAs, and we have our capital markets business as an additional overlay against all of that. And I think most recently, IG issuers for these customized, privately bespoke solutions has really catalyzed the growth of the private IG market. And to answer your question, we think we're really well positioned against this opportunity. and our ability to address it at scale. We benefit from collaboration across all our teams, the relationships that we have across our private equity and teams. We support companies with holistic solutions. You mentioned some of the origination engines that we have as an advantage for us. That includes the 36 caps, both asset-based finance as well as real assets. We've got five decades of relationships, capital markets, as well as that activity coming through multiple channels. And from a fundraising perspective, look, Rob and Scott talked earlier about the outlook we have from a credit fundraising standpoint, but we've been very active across private IG SMAs and our pipeline feels very good as we look to the second half of the year. And so look, stepping back, since the acquisition of GA, our credit business is up, give you some round numbers from $80 billion to $300. and similarly you look at management fees tied to that growth are also more than 3x where they were up at 1.2 billion so you're seeing the a big growth part of the business and it just feels like in private IG there's a lot more for us to do alongside yeah Bradley Scott just maybe zooming out a little bit I'd kind of put a lot of what we're seeing across the firm into a few buckets um when you get one you got growth areas where we're already top three a lot of capital

coming into the space and it's just about keep your performance strong and keep investing in your barriers to entry back to the platforms and the 7 000 plus employees abf fits squarely into that bucket one you got bucket two which is back to my comments about a bit of a k-shaped industry the happy part of the K is taking market share from the unhappy part of the K and so we've got that going on in different aspects of our business I actually think what's going on in terms of this bout with pessimism our space is feeling this is going to be wonderful for us in the long term and it'll lead to more growth in the future and then the third bucket I'd say things like wealth or brand global reach and scale really matter and probably a large percentage of the market share is going to go to relatively few. And you can take our businesses globally and largely put them into those three buckets, but ABF is in bucket one.

Our next question comes from Mike Brown with UBS.

Your line is now live.

Great. Good morning, Scott, Rob, and Craig. I wanted to maybe dig in a little more on credit. It's a great caller on ABF. Just this quarter, we observed that that the management fees declined sequentially. Fee-paying AUM growth is also relatively muted. Can you just help us unpack the primary drivers there? And then based on what you're seeing, how should we think about the trajectory here in the second half in terms of net flows, management fees, and the fee rate here through the rest of the year?

Yeah, Mike, it's Rob. Why don't I start a little bit to this? while not all that material in the context of KKR.

Our next question comes from Benjamin Buttish with Barclays Bank. Your line is now live.

Hi, good morning, and thanks for taking my question. Rob, sometimes on the calls you'll give a little bit of forward-looking commentary on line of sight to transaction revenues and realizations, wondering if you could give us any color there. And just given the optimism around the ability to get transactions done, even in this kind of environment, I know you kind of talked down the sort of $7 target previously, but is it possible that it's on the table? I imagine you've got a decent look into the next five months. Just curious how we should think about all that.

Great. Thanks, Ben. Related visibility, maybe a bit of variability there based on the time. About 80% realized performance revenue and 20% realized investment income. 700, a healthy number for us, particularly coming off a record monetization quarter in Q2. And then we've talked about it. we continue to watch that earnings this quarter.

Fair enough. Thanks for all that, Rob. Very helpful.

Thank you.

Our next question comes from Crispin Love with Piper Sandler. Your line is now live.

Thank you. Good morning. I appreciate you taking the question. Just on insurers operating earnings, you've talked about the $250 million plus or minus guide in 26, given the cash accounting. You're closer to about $290 million this quarter. I believe you mentioned the $40 million or so against, can you discuss how that might trend in the back half of the year? Does that 250 million target still stand? Could you benefit sooner and break above those levels more consistently? And then as you just get into 2027, could you see a step function higher?

Great. Thanks, Crispin. So a couple of building blocks there. I think that the 250 plus we did have right now, you know, and we move into 2028, we believe we can position around what we're doing in insurance we talk good figure up our

next question is from renewed galat with BNP your line is now live good morning um could you talk more about the capital raised by at Helix Digital Infra what is the top final target size of this fund and the mandate of the Sun in particular I'd like to know if Helix will invest in power or this will all or fees investments will be provided by your partner, ECP. And is this fund generally incremental or part of the $50 billion targeted deployment that you announced two years ago in conjunction with ECP?

Craig, why don't I start? So a couple of years ago, we did talk about the partnership with ECP and the opportunities that we saw to bring our collective skills together with the hyperscalers. And yes, this is, and that was how we thought capital, the kicker hat together with ecp again would provide that one-stop shop and i think this is incremental and and a continued evolution um as it relates to the opportunities that we see in the massive capex needs that we continue to see from the hyperscaler space and uh we have a number of strategic partners again as as rob ran through uh we think there's a real opportunity for us in the in the framework of a vehicle that is that is not a closed-end vehicle to work with Adam Slipsky and his team with really differentiated points of view relationships experience to help bring that those solutions through to

hyperscalers the answer is yes it is broader than just data centers it is going to encompass a much broader mandate in that framework so we're just getting going and what you should expect more updates from us over time this was just uh an important first step for us yeah hey arno it's scott i'd say a couple things one it's a company not a fund and so i would think of it as more permanent in nature uh in terms of the size target don't have one we think the opportunities in the uh tens of billions of dollars we launched with 10 plus billion just with the founding investors but we're continuing to talk to investors about large-scale participation and we expect that will be an ongoing process just like it'll be for any company that's continuing to find very interesting investment and acquisition opportunities. Mandate is to be a one-stop shop for hyperscalers, power, data centers, connectivity, all in one place.

Hopefully that helps. We have reached the end of the question and answer session.

I'd now like to turn the call back over to Craig Larson for closing comments.

Just thank you, everybody, for your continued interest in KKR. Robert, thank you for your help. And if anybody has follow-up questions, please feel free to reach out to us directly. Thank you, everyone. Thank you.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.