KKR & Co Inc at Goldman Sachs U.S. Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : We'll keep it going. So let's start with a bit of an outlook into 2025. And the way I want to frame it is KKR had an Investor Day earlier this year, set quite meaningful targets. You guys talked about a multiyear target of $7 to $8 in earnings per share in '26. That's 30% three-year CAGR. You're well on your way there. If you kind of look at what Street is modeling for this year, it implies about 30%. So why don't we get started with your key priorities for 2025 as you look to execute on this path?

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Well, let's touch on the first one, I guess, and just bringing you to some of the current events. After the US election, there's clearly been a lot of enthusiasm in the markets around what the new administration could mean for financial regulation but also as a byproduct that just the pace of activity in the marketplace. And the market seems to be obviously quite excited about that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 1:00PM, KKR.N - KKR & Co Inc at Goldman Sachs U.S. Financial Services Conference KKR had already seen a pretty meaningful pickup in activity this year, which is how you guys deploy a lot of capital. Realizations started to pick up a little bit as well. How have your view pipelines have actually changed, if at all, post November election? And as you look out into 2025, maybe spend a couple of minutes how you're thinking about pace of capital deployment on both deploying and realizing?

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Great. With more capital market activity and as more capital comes back to LPs, the fundraising outlook hopefully gets a bit better for the industry. You guys have been on a strong path as it is. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 1:00PM, KKR.N - KKR & Co Inc at Goldman Sachs U.S. Financial Services Conference In terms of the targets, you talked about $300 billion of capital to be raised through 2026, I guess, based on even results year to date. You're well on your way there. So the firm is going to be in the market with several flagship products in '25 in addition to kind of your regular way fundraising. So based on the reception you're seeing from LPs, what are your thoughts on both sizing these flagships and maybe broader comments on 2025 fundraising?

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Right. Let's unpack a couple of these kind of bigger fundraising themes. And I want to spend a couple of minutes on sort of evolution of the institutional channel. Over the last couple of quarters, you've highlighted opportunities in forming longer-dated strategic partnership with several institutions on a multiyear kind of capital recycling basis. I think you highlighted $3 billion example as of the last quarter. I guess what's driving this renewed appetite from LPs? And what does your pipeline there look like? Maybe speak to the typical structures. And at the same time, do you think these vehicles could live side by side with your regular institutional flagship business? Or is there risk of that cannibalizing some of this kind of higher fee flagship dynamic?

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Great. Let's shift gears a little bit and talk about Private Credit. It's been probably one of the biggest themes for Alt and one of growing for financial markets for the last couple of years. It remains an important obviously, a priority for the firm as well. You talked about even earlier today, expansion of your asset-backed finance business. It's over $65 billion in AUM. When we look at KKR's Private Credit business, still a meaningful portion is related to two big kind of pools of capital. It's GA relationship and your publicly traded BDC. Can you talk a little bit about how you expand that to more third-party customers, the views on expanding both the asset finance franchise as well as other forms of private credit?

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Right. One of the important factors when it comes to asset-backed finance is obviously proprietary origination and really coming back to market with something unique. Can you spend a couple of minutes on that, especially as you further expand your capabilities within asset-backed finance? What do your origination engines look like? What kind of partnerships you guys either have today or considering in the future?

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Yeah. And I guess, more importantly, not super dependent on the bank channel originate, which is critical. All right. Let's pivot, talk about wealth. Huge theme for you guys. Huge theme for the space. We all know the stats. The addressable market is very large. And you and your peers execute well against that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 1:00PM, KKR.N - KKR & Co Inc at Goldman Sachs U.S. Financial Services Conference I really like the way you framed it, both today and just in general, the way you're attacking the market in kind of three verticals. You have the K-Series. You have your regular way kind of funds for more affluent client and then you launched the partnership with Capital. So we'll kind of unpack all of those. On K-Series, you guys are now managing about $14 billion it's AUM. It's up from, I think, just $5 billion a year ago. So off to a really nice start with Infra and private equity driving the bulk of that flow. So let's spend a couple of minutes on one of your product pipeline looks like on anything new that you guys are thinking about? And more importantly, how are you thinking about the distribution landscape from those products?

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : As you look at that distribution ramp that you mentioned, can you give us a sense how many larger wires are you on today and what kind of the next steps is? Like are you looking at independent broker-dealers, RIA channel? Kind of where are you focusing your attention? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 1:00PM, KKR.N - KKR & Co Inc at Goldman Sachs U.S. Financial Services Conference

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Yeah. To mention capital, let's just touch on that for a minute. A unique partnership. I don't think anybody has really announced anything of the size and magnitude with two really big brands in the space. What's the plan from here? So you have two products that will be out in the market early next year. Are you getting any feedback from future distributors? Kind of how is that news been received? And what sort of next? Should we expect more kind of products to evolve on the back of what you're launching?

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Yeah. One of the themes that's been coming up in the last month, 1.5 months or so has been 401(k). And there's just like with respect to capital markets activity post the election, there's been this renewed optimism that maybe we'll see changes in the regulatory environment that could open up the 401(k) channel to private managers, which, of course, nobody has really participated in that space in the past. So I guess what are your thoughts on this? What do planned sponsors, administrators really need to see on the regulatory front to get more comfortable with including some of the private vehicles in the 401(k)? And how realistic do you think that is as part of your addressable market?

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Great. All right. Let's talk a bit about other businesses you guys have established starting with maybe the capital markets business, which has been around for a while, but the ramp has been quite impressive. I think this year, you guys are on track to do about $1 billion of revenues in this business. The firm clearly benefited from a couple of sizable transactions this year. But I think it just still underscores just the magnitude of a potential upside in a capital market cycle that's a little more supportive. So help us maybe frame the opportunity you see for KKR's capital markets fee pool over the next couple of years. What would you kind of tie that to? $1 billion of revenue is obviously great this year, but what is the ultimate size that this business could get to?

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Great. Well, you mentioned GA, so let's talk about that for a minute. A bit of a more muted growth this year, and I know you guys have gone through couple of portfolio repositioning dynamics. But first, maybe we can start with just your outlook for organic growth in that business, the key drivers as well as any expectations for block activity at GA over the next 12 to 18 months. And as you look a little bit further out, where are we in sort of rotating some of the higher yielding, higher returning assets into that book to get the ROE back up closer to your targets?

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : I got you. Great. So let's pivot in, in the last couple of minutes here. I want to spend a few minutes on capital management. One of the stats that I think grabbed a lot of attention from investors was the $25 billion number plus of capital generation that you guys expect over the next five years. You spoke very much in kind of broader strokes about kind of strategically allocating that capital into kind of highest ROE activities, which again makes total sense. But if you look over the next 12 to 18 months, what does that look like? Where do you think you'll find some of these higher ROE activity? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 1:00PM, KKR.N - KKR & Co Inc at Goldman Sachs U.S. Financial Services Conference

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Great. Well, I think it's a great note to leave it on. Thank you, Scott, very much for being with us today.

Question: Alex Blostein - Goldman Sachs & Co. LLC - Analyst : Appreciate it. Thanks.