The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst
: Great. Thank you, Adam. Well, why don't we start off talking about the capital markets backdrop. It's been a little bit volatile
this year, a little bit of a pause in April. Now it appears that some of the activity is picking up.
So just curious your take on the outlook for capital markets activity from here. What do we need to see in order to see a
significant uptick in transactions? And what are some of the indicators you guys are tracking and watching on that front?
Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst
: Why don't we dive into your KKR Capital Markets business, which you gave a nice overview? You helped build the Capital
Markets business back from its roots in 2007. So maybe just how has the business evolved relative to your initial expectations
that you had back many years ago? And looking out over the next decade, how do you see the business evolving from here
over the next decade?
Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst
: Great. Why don't we talk about the mix of the business. Quite diversified, right, mix of debt syndication, various types equity
syndication, third-party related transactions in there. I guess, how do you think about the mix evolving over time?
Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst
: Great. Why don't we shift to talk about the outlook for transaction fees this year. First quarter was pretty strong despite the
backdrop, so impressive there. I think two-thirds were more debt-focused, to your point, on sort of the debt mix by 80% or so
driven by portfolio company activity. So I guess, how do you see cap markets fees trending this year and the mix of activity?
Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst
: And how should we think about the monetization take rate for your transaction fees? I think the overall sort of cumulative
revenue you had on your slide here implied around 30 basis points take rate on the overall volume. I guess, what are some
of the areas that are higher when you think about the different types of transactions? Which ones are lower? And how do you
see that take rate evolving over time?
Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst
: How do you think about the longer-term growth opportunity for the capital markets business? What sort of growth algo should
we be thinking about here and some of the key drivers, aspirations to doubling the business, would you say, overtime?
Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst
: Great. With the GA slide on here, why don't we shift and talk about the build-out of the capital markets business now with
Global Atlantic alongside? How do you see this contributing over the next couple of years? Talk about some of the steps that
you're taking here. What do you need to do in order to best capture the opportunities of that?
Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst
: Great. We have a few minutes left. I wanted to turn to global initiatives. I think that's a major differentiator for KKR. You have
a large presence in Asia. So I guess, how do you see the capital markets there developing the areas sort of with greatest
demand and tailwinds now? And what are some of the other regions around the world that you see as having some of the
most meaningful growth opportunities?
Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst
: Great. We have maybe about two minutes left. So just maybe a question on private credit. You co-head that as well. KKR
manages over $100 billion of private credit that's grown meaningfully over the past year. I guess, where do you see some of
the biggest opportunities right now across direct lending, sponsored finance, asset-backed and across different geographies?
Question: Michael Cyprys - Morgan Stanley & Co. LLC - Analyst
: Great. I'm afraid we'll leave it there. Thank you, Adam. (multiple speakers)
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