The $723 billion investment giant posts stronger earnings as credit inflows and insurance profits offset private equity headwinds.
NEW YORK (November 7, Market Insider) — KKR & Co. (NYSE: KKR) reported stronger-than-expected third-quarter earnings on Friday, powered by robust credit inflows and a record fundraising run — though a one-time charge tied to an underperforming Asian fund tempered early stock gains.
The private equity powerhouse posted adjusted net income of $1.27 billion, or $1.41 per share, topping Wall Street’s forecast of $1.30 per share, according to LSEG data. The stock initially rose 3% in early trading before paring gains to flat by mid-day.
Credit and Insurance Drive the Quarter
KKR’s total assets under management climbed to $723 billion, fueled by $43 billion in fresh capital, including a record $27 billion into credit strategies. Its fast-growing insurance arm, Global Atlantic, contributed heavily, with operating earnings up 28% year-on-year, now accounting for nearly one-third of KKR’s total assets.
The firm’s fee-related earnings hit $1 billion, underscoring how alternative asset managers are leveraging recurring revenues from management fees to guard against market volatility.
“Results for alternative asset managers with balance sheets have demonstrated that the moat created from these businesses has increasingly immunized against rate volatility,” analysts at Piper Sandler wrote in a client note.
Aiming for $1 Trillion by 2030
Co-CEOs Scott Nuttall and Joe Bae reaffirmed KKR’s ambition to hit $1 trillion in assets under management by 2030, joining peers Blackstone (BX) — which has already crossed the $1 trillion threshold — and Apollo Global Management (APO), targeting the milestone by 2026.
During the quarter, KKR raised $17.5 billion for its latest North America private equity fund, which insiders say is targeting roughly $20 billion, making it one of the largest buyout vehicles in the market.
Despite global fundraising challenges, KKR executives downplayed concerns about capital commitments and asset sales, saying investor appetite for long-term private markets exposure remains strong.
Private Equity Softens, Retail Business Surges
While returns from KKR’s traditional private equity portfolio slipped to 2% — down from 5% in the prior quarter — the firm’s retail investor division, K-Series, continued its explosive growth, doubling assets to $29 billion from $14 billion a year ago.
The firm’s dry powder — investor capital committed but not yet deployed — stood at a formidable $126 billion, giving it ample flexibility for acquisitions and opportunistic deals.
KKR also expanded through strategic investments, including: A majority stake in Healthcare Royalty Partners, a biopharma royalty firm; A $2 billion injection from Japan Post Insurance; and A $7 billion post-quarter co-investment with Apollo in Keurig Dr Pepper (NASDAQ: KDP).
Balancing Growth and Caution
The firm acknowledged a fourth-quarter charge tied to an underperforming Asian private equity fund, but executives noted other Asia-based vehicles had been “a bright spot.”
KKR shares remain down 19% year-to-date, reflecting investor caution toward private equity exits and valuations amid higher interest rates. Still, the firm’s diversification into credit, insurance, and retail channels has provided a powerful buffer.
“KKR has shown it can pivot from deal-making to durable income,” said one analyst. “Its trillion-dollar goal no longer looks like a stretch — just a matter of time.”
Even as traditional buyouts lose momentum, KKR’s results highlight the new reality for private markets — the era of balance-sheet strength, credit expansion, and long-term yield strategies is firmly taking center stage.
