filings.toolsItem 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial
statements of KKR & Co. Inc., together with its consolidated subsidiaries, and the related notes included elsewhere in this
report and our Annual Report, including the audited consolidated financial statements and the related notes and
"Management's Discussion and Analysis of Financial Condition and Results of Operations" and “Business” section contained
therein. In addition, this discussion and analysis contains forward-looking statements and involves numerous risks and
uncertainties, including those described under "Cautionary Note Regarding Forward-looking Statements" and "Business
Environment" in this report and our Annual Report and "Risk Factors" in our Annual Report, and our other filings with the SEC.
Actual results may differ materially from those contained in any forward-looking statements.
The unaudited condensed consolidated financial statements and the related notes included elsewhere in this report are
hereafter referred to as the "financial statements." Additionally, the condensed consolidated statements of financial condition
are referred to herein as the "consolidated statements of financial condition"; the condensed consolidated statements of
operations are referred to herein as the "consolidated statements of operations"; the condensed consolidated statements of
comprehensive income (loss) are referred to herein as the "consolidated statements of comprehensive income (loss)"; the
condensed consolidated statements of changes in equity are referred to herein as the "consolidated statements of changes in
equity"; and the condensed consolidated statements of cash flows are referred to herein as the "consolidated statements of
cash flows."
Overview
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance
solutions. We aim to generate attractive investment returns by following a patient and disciplined investment approach,
employing world-class people, and supporting growth in our portfolio companies and communities.
Founded in 1976, KKR pioneered the leveraged buyout strategy and has been a leader of the private equity industry for
five decades. Since the inception of our firm, we have expanded our investment strategies and product offerings from
traditional private equity to other alternative asset classes such as leveraged credit, alternative credit, infrastructure, real
estate, energy, growth equity, and core private equity. Over the same period, we scaled from being a U.S.-focused firm to a
global operation with 35 offices around the world as of March 31, 2026. Our business further expanded with the acquisition of
Global Atlantic in 2021, which today conducts our insurance business providing retirement and life insurance solutions. As of
March 31, 2026, we managed $758 billion of assets under management, of which $220 billion comes from Global Atlantic.
Our three reporting segments align with the KKR business model:
Our business model of (i) Asset Management, (ii) Insurance, and (iii) Strategic Holdings corresponds to our three reporting
segments. We have purposely created a business model that we believe enables us to grow long-term, durable, recurring
earnings with a focus on large addressable markets where we can be an industry leader. Importantly, these pieces were built
to leverage our core strengths as a firm: investing acumen, capital allocation expertise and our collaborative culture.
Business Segments
Asset Management
In Asset Management, we have five business lines: (i) Private Equity, (ii) Real Assets, (iii) Credit and Liquid Strategies, (iv)
Capital Markets, and (v) Principal Activities.
Our Assets Under Management have grown and diversified in the last 15 years across Private Equity, Real Assets, and
Credit and Liquid Strategies as illustrated on the following chart. KKR has evolved from a relatively US-centric and traditional
private equity firm to a global alternative asset manager. As of December 31, 2010, our traditional Private Equity strategy
represented over 70% of our total AUM. As of March 31, 2026, traditional Private Equity was less than 25% of our total AUM.
Assets Under Management ($ in billions):
Liquid Strategies
Alternative Credit
Credit and Liquid
Strategies(1)
$329
+18%
CAGR
Leveraged Credit
Real Estate
Real Assets(2)
$198
Infrastructure &
Energy
Growth Equity
Core Private Equity
Private Equity
$231
Traditional Private
Equity
(1)As of March 31, 2026, Alternative Credit AUM includes $92 billion of asset-based finance, $49 billion of corporate private credit (including $39 billion of
direct lending) and $8 billion of strategic investments.
(2)Real estate credit lends across the risk return spectrum of investments secured by or relating to real property, including senior mortgage loans, mezzanine
loans and mortgage-backed securities in North America and Europe. As of March 31, 2026, real estate credit AUM totals $44 billion. Real estate equity
seeks core, core+ and opportunistic real estate investment opportunities by geography: North America, Europe and Asia Pacific. As of March 31, 2026,
real estate equity AUM totals $40 billion. This includes $12 billion from the management of two publicly listed Japanese REITs through our subsidiary,
KJRM.
(3)The K-Series suite of vehicles are offered through various distribution channels to investors in the U.S. and other jurisdictions around the world. We have
K-Series vehicles that operate or invest in private equity companies, infrastructure assets, credit investments, and real estate. As of March 31, 2026, total
K-Series AUM was $38 billion, which has grown significantly over the past three years.
As an asset management firm, we earn recurring management fees and fee-related performance revenues for providing
investment management services and expertise to our institutional and individual investors who entrust us with their capital.
The amount of fees we charge for managing these assets depends on the underlying investment strategy, liquidity profile, and
ultimately our ability to generate attractive investment returns for our clients.
We earn transaction fees for providing capital markets services as a broker-dealer, and we also earn transaction and
monitoring fees as part of the management of our portfolio companies.
Carried interest that we receive from our investment vehicles entitles us to a specified percentage of investment gains
that are generated on third-party capital that is invested. We earn investment income by investing our own capital alongside
investors in our funds and other investment vehicles and from other assets we own on our balance sheet.
Operating expenses, which include occupancy expenses and other typical operating expenses, are shared across a single
expense pool given the collaborative nature of our five business lines within Asset Management.
Insurance
Our insurance business operates under the Global Atlantic brand. Global Atlantic is a leading retirement and life
insurance company, with an over 20-year track record of providing a broad suite of protection, legacy, and savings products to
customers and reinsurance solutions to clients across individual and institutional markets.
Global Atlantic primarily generates income by earning a spread between the investment income generated from
originated assets and the required cost of benefits payable to policyholders. Global Atlantic also earns fees paid by
policyholders on certain types of insurance contracts and fees paid by third-party investors, which are reported in our asset
management segment. As of March 31, 2026, Global Atlantic serves over 3.5 million policyholders.
The following table represents Global Atlantic’s new business volumes by business and product for the three months
ended March 31, 2026 and 2025.
| Three Months Ended March 31, | ||||
| ($ in millions) | 2025 | 2026 | ||
| Individual Channel (1)****: | ||||
| Retirement Products | $3,492 | $1,591 | ||
| Preneed Life | 257 | 301 | ||
| Institutional Channel**(2)(3)** | $3,664 | $1,893 |
(1)New business volumes in individual markets are referred to as sales. In Global Atlantic's individual market channel, sales of annuities include all money
paid into new and existing contracts. Individual market channel sales for preneed life are based on the face amount of insurance and do not include the
recurring premiums that policyholders may pay over time.
(2)Block reinsurance transactions may be episodic and volumes may fluctuate. Similarly, funding agreements issued in the FABN program are subject to
capital markets conditions and volumes may fluctuate. Flow and pension risk transfer new business volumes typically occur throughout the year. See “—
Risks Related to Our Business—Parts of our earnings and cash flow are highly variable due to the nature of our business” in our Annual Report.
(3)New business volumes from Global Atlantic’s institutional market channel are based on the assets assumed, net of any ceding commission, and are gross
of any retrocessions to investment vehicles that participate in qualifying reinsurance transactions sourced by Global Atlantic and to other third party
reinsurers.
Strategic Holdings
Our Strategic Holdings segment, which we started reporting in the first quarter of 2024, acquires and manages interests
in operating companies that are owned by the firm. Today, those companies primarily consist of our participation in our core
private equity strategy. We have acquired, and in the future we expect to continue to acquire, other long-term assets outside
of, and in addition to, our participation in our core private equity strategy. Strategic Holdings is not limited to acquiring
companies in specific industries. We intend to hold the companies in our Strategic Holdings segment over a longer period of
time, and we believe most of these companies generally have a lower risk profile than would be typical for an investment
through our traditional private equity strategy. We currently expect our Strategic Holdings segment primarily to generate
income from the receipt of dividends from our ownership stakes in these businesses and, upon the sale of any ownership
stake, realized investment income from such sale. As of March 31, 2026, our Strategic Holdings segment consisted of our
ownership stakes in 19 companies.
The fees and carried interest paid by the third party investors in our core private equity funds continue to be reported in
our Asset Management segment and are not reported in our Strategic Holdings segment. Our Asset Management segment
charges a quarterly management fee in our Strategic Holdings segment. Additionally, our Asset Management segment charges
a performance fee from the sale of our interests in the companies included in our Strategic Holdings segment. The
management and performance fees are charged in order to represent the cost of providing advisory services by our Asset
Management segment rather than determining the allocable costs borne by our Asset Management segment to support our
Strategic Holdings segment.
Based on information made available to management as of March 31, 2026, the following represents KKR’s pro-rata
portion of LTM Adjusted EBITDA(1) of operating companies in Strategic Holdings as of December 31, 2025:
| By Geography | By Industry |
Based on information made available to management as of March 31, 2026, the following represents KKR’s pro-rata
portion of LTM Adjusted Revenue(1) and LTM Adjusted EBITDA(1) of operating companies in Strategic Holdings as of December
31, 2025:
| Adjusted Revenue(1) | Adjusted EBITDA(1) | |
| $4.5 billion | $1.1 billion |
(1)Represents the measure(s) management currently uses to monitor the operating performance of the businesses that are carried on a fair value basis with
dividends recognized in Strategic Holdings Operating Earnings.
Business Environment
Our asset management, insurance, and strategic holdings segments are affected by the various market and economic
conditions of the various countries and regions in which we operate. Market and economic conditions are expected to
continue to have a substantial impact on our financial condition, results of operations, and our business in various ways that
we are unable to control, including our ability to make new investments, the valuations of the investments we manage, the
amount of investment proceeds we realize when we exit our investments, the timing for such realization activity, our ability to
fundraise or to sell our various investment and insurance products and services, and the level of our capital markets activities,
as discussed in the "Risk Factors" section of our Annual Report.
The United States, during the three months ended March 31, 2026, continued to experience economic growth in tandem
with inflation in excess of the U.S. Federal Reserve Board’s 2.0% target rate. During the three months ended March 31, 2026,
the U.S. Federal Reserve Board left the federal funds rate unchanged.
Real gross domestic product (“GDP”) growth in the Eurozone during the three months ended March 31, 2026 was
moderately positive. In Europe during the three months ended March 31, 2026, the European Central Bank maintained
interest rates at the same level as for the quarter ended December 31, 2025, leaving the deposit rate unchanged at 2.0% as
Eurozone core inflation remained slightly above the European Central Bank’s 2% inflation target.
In Asia, Japan’s economy experienced moderate growth in the first quarter of 2026, supported by resilient exports and
consumer spending. The Bank of Japan left interest rates flat during the three months ended March 31, 2026, leaving its
policy rate at 0.75%. In China, the economy grew during the three months ended March 31, 2026, driven largely by strong
exports and industrial production, but continued to face headwinds, including weak domestic demand and ongoing
contraction in the property sector.
Several key economic indicators in the United States and in other countries and regions in which we operate include:
- GDP.** In the United States, real GDP expanded at an annualized rate of 2.0% for the three months ended March 31,
2026, compared to an annualized expansion of 0.5% for the three months ended December 31, 2025. Eurozone real
GDP expanded at an annualized rate of 0.8% for the three months ended March 31, 2026, consistent with the 0.8%
annualized expansion for the three months ended December 31, 2025. In Japan, real GDP is expected to expand by
1.2% for the three months ended March 31, 2026, down from a 1.3% annualized expansion for the three months
ended December 31, 2025. Real GDP in China expanded at a 5.2% annualized rate for the three months ended March
31, 2026, up from annualized growth of 4.8% reported for the three months ended December 31, 2025.
- Interest Rates****.** The target federal funds rate set by the U.S. Federal Reserve Board was 3.625% as of March 31, 2026,
unchanged from 3.625% as of December 31, 2025. The benchmark short-term interest rate set by the European
Central Bank was 2.0% as of March 31, 2026, unchanged from 2.0% as of December 31, 2025. The benchmark short-
term interest rate set by the Bank of Japan was 0.75% as of March 31, 2026, unchanged from 0.75% as of December
31, 2025. The benchmark interest rate set by The People’s Bank of China was 3.0% as of March 31, 2026, unchanged
from 3.0% as of December 31, 2025.
- Inflation.** The U.S. core consumer price index rose 2.6% on a year-over-year basis as of March 31, 2026, the same
change as the 2.6% increase on a year-over-year basis as of December 31, 2025. Eurozone core inflation increased
2.3% as of March 31, 2026, the same rate as of December 31, 2025. In Japan, core inflation rose 1.4% on a year-over-
year basis as of March 31, 2026, down slightly from 1.5% on a year-over-year basis as of December 31, 2025. Core
inflation in China was 1.1% on a year-over-year basis as of March 31, 2026, down from 1.2% as of December 31,
- Unemployment.** The U.S. unemployment rate was 4.3% as of March 31, 2026, down from 4.4% as of December 31,
- Eurozone unemployment was 6.2% as of March 31, 2026, down from 6.3% as of December 31, 2025. The
unemployment rate in Japan was 2.6% as of March 31, 2026, unchanged from 2.6% as of December 31, 2025. The
unemployment rate in China was 5.3% as of March 31, 2026, up from 5.1% as of December 31, 2025.
Several key financial market indicators in the United States and in other countries and regions in which we operate
include:
- Equity Markets.** For the three months ended March 31, 2026, the S&P 500 was down -4.3%, the MSCI Europe Index
was down -2.7%, the MSCI Asia Pacific Index was up 0.1% and the MSCI World Index was down -3.5% in U.S. dollar
terms, on a total return basis including dividends. Equity market volatility as evidenced by the Chicago Board Options
Exchange Market Volatility Index (VIX), a measure of volatility, ended at 25.3 as of March 31, 2026, increasing from
15.0 as of December 31, 2025.
- Credit Markets.** During the three months ended March 31, 2026, U.S. investment grade corporate bond spreads
(BofA Merrill Lynch US Corporate Index) widened by 11 basis points. The non-investment grade credit indices were
down during the three months ended March 31, 2026, with the S&P/LSTA Leveraged Loan Index down -0.6% and the
BofAML HY Master II Index down -0.5%. During the three months ended March 31, 2026, the 10-year government
bond yields rose 15 basis points in the United States, rose 15 basis points in Germany, rose 29 basis points in Japan,
rose 44 basis points in the UK, and fell 3 basis points in China.
- Commodity Markets.** During the three months ended March 31, 2026, the 3-year forward price of WTI crude oil
increased approximately 10.9%, and the 3-year forward price of natural gas decreased from approximately $4.51 per
MMBtu as of December 31, 2025 to $3.06 per MMBtu as of March 31, 2026. The Japan spot LNG import price
increased to approximately $11.19 per MMBtu as of March 31, 2026, from approximately $11.03 per MMBtu as of
December 31, 2025.
- Foreign Exchange Rates.** For the three months ended March 31, 2026, the euro fell 1.6%, the British pound fell 1.8%,
the Japanese yen fell 1.3%, and the Chinese renminbi rose 1.4%, respectively, relative to the U.S. dollar.
The United States and countries around the world have experienced elevated levels of market volatility and uncertainty
driven by, among other things, geopolitical and global trade concerns, including, the imposition of tariffs and threats of tariffs
by the United States on certain of its trading partners since April 2025 and impacts from the recent conflicts in the Middle
East. This volatility and uncertainty add to the various risks and uncertainties in the business environment in which we
operate and may have various impacts, including on the valuations of certain of our investment vehicles' investments, the
pace and volume of our capital market transactions, deployments, and realizations, and our fundraising activities.
Other Trends, Uncertainties and Risks Related to Our Business
Please refer to the "Risk Factors" section of our Annual Report for important additional detail regarding risks,
uncertainties, and other conditions that could have a material favorable or unfavorable impact on our businesses, including
the impact of market and economic conditions on valuations of investments and the impact of competition we face. These
risks, uncertainties, and other conditions should be read in conjunction with this Business Environment section and the entire
Risk Factor section of our Annual Report. In particular, see "Risk Factors—Risks Related to Our Business—Global, regional and
local events outside of our control, including geopolitical events and natural disasters, could materially and adversely impact
KKR", "Risk Factors—Risks Related to Our Business—We operate in a highly competitive industry,” "Risk Factors—Risks
Related to Our Investment Activities—Various conditions and events outside of our control that are difficult to quantify or
predict may have a significant impact on the valuation of our investments", and "Risk Factors—Risks Related to Our Insurance
Activities—We operate in a highly competitive industry."
Basis of Accounting and Key Financial Measures under GAAP
We manage our business using certain financial measures and key operating metrics since we believe these metrics
measure the productivity of our operating activities. We prepare our consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America (“GAAP”). See Note 2 “ Summary of Significant
Accounting Policies” in our financial statements and “—Critical Accounting Policies and Estimates” contained in this section
below. Our key Segment and non-GAAP financial measures and operating metrics are discussed below.
Key Segment and Non-GAAP Performance Measures
The following key segment and non-GAAP performance measures are used by management in making operational and
resource deployment decisions as well as assessing the performance of KKR's business. They include certain financial
measures that are calculated and presented using methodologies other than in accordance with GAAP. These performance
measures as described below are presented prior to giving effect to the allocation of income (loss) between KKR & Co. Inc.
and holders of exchangeable securities and as such represent the entire KKR business in total. In addition, these performance
measures are presented without giving effect to the consolidation of certain investment funds and collateralized financing
entities ("CFEs") that KKR manages.
We believe that providing these segment and non-GAAP performance measures on a supplemental basis to our GAAP
results is helpful to stockholders in assessing the overall performance of KKR's business. These non-GAAP measures should
not be considered as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of these non-
GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP,
where applicable, are included under "—Segment Balance Sheet Measures—Reconciliations to GAAP Measures."
Adjusted Net Income
Adjusted Net Income ("ANI") is a performance measure of KKR’s earnings, which is derived from KKR’s reported segment
results. ANI is used to assess the performance of KKR’s business operations and measures the earnings potentially available
for distribution to its equity holders or reinvestment into its business. ANI is equal to Total Segment Earnings less Interest
Expense, Net and Other and Income Taxes on Adjusted Earnings. Interest Expense, Net and Other includes (i) interest expense
on debt obligations not attributable to any particular segment and (ii) cumulative dividend expense on the Series D
Mandatory Convertible Preferred Stock, net of interest income earned on cash and short-term investments. Income Taxes on
Adjusted Earnings represents the amount of income taxes that would be paid assuming that all adjusted earnings were
allocated to KKR & Co. Inc. and taxed at the same effective rate, which assumes that all securities exchangeable into shares of
common stock of KKR & Co. Inc. were exchanged. The economic assumptions and methodologies that impact Income taxes on
Adjusted Earnings are similar to those used in calculating the current income tax provision under U.S. GAAP. Equity based
compensation expense is excluded from ANI, because (i) KKR believes that the cost of equity awards granted to employees
does not contribute to the earnings potentially available for distributions to its equity holders or reinvestment into its
business and (ii) excluding this expense makes KKR’s reporting metric more comparable to the corresponding metric
presented by other publicly traded companies in KKR’s industry, which KKR believes enhances an investor’s ability to compare
KKR’s performance to these other companies. Income Taxes on Adjusted Earnings includes the benefit of tax deductions
arising from equity-based compensation, which reduces Income Taxes on Adjusted Earnings during the period. If tax
deductions from equity-based compensation were to be excluded from Income Taxes on Adjusted Earnings, KKR’s ANI would
be lower and KKR’s effective tax rate would appear to be higher, even though a lower amount of income taxes would have
actually been paid or payable during the period. KKR separately discloses the amount of tax deduction from equity-based
compensation for the period reported and the effect of its inclusion in ANI for the period. KKR makes these adjustments when
calculating ANI in order to more accurately reflect the net realized earnings that are expected to be or become available for
distribution to KKR’s equity holders or reinvestment into KKR’s business. However, ANI does not represent and is not used to
calculate actual dividends under KKR’s dividend policy, which is a fixed amount per period, and ANI should not be viewed as a
measure of KKR’s liquidity.
Total Segment Earnings
Total Segment Earnings is a performance measure that KKR believes is useful to stockholders as it provides a
supplemental measure of our operating performance without taking into account items that KKR does not believe arise from
or relate directly to KKR's operations. Total Segment Earnings excludes: (i) equity-based compensation charges, (ii)
amortization of acquired intangibles, and (iii) transaction-related and non-operating items, if any. Transaction-related and
non-operating items primarily arise from corporate actions, which consist of: (i) impairments, (ii) transaction costs from
acquisitions, including any acquisition-related stock consideration, (iii) depreciation on real estate that KKR owns and
occupies, (iv) contingent liabilities, net of any recoveries, (v) certain integration, restructuring, and other non-operating
expenses, and (vi) other gains or charges that affect period-to-period comparability and are not reflective of KKR's ongoing
operational performance. Inter-segment transactions are not eliminated from segment results when management considers
those transactions in assessing the results of the respective segments. These transactions include (i) management fees earned
by our Asset Management segment as the investment adviser for Global Atlantic insurance companies, (ii) management and
performance fees earned by our Asset Management segment for acquiring and managing the companies included in our
Strategic Holdings segment, and (iii) interest income and expense based on lending arrangements where our Asset
Management segment borrows from our Insurance segment. All these inter-segment transactions are recorded by each
segment based on the applicable governing agreements. Additionally, due to the integrated nature of our segment operations
and as part of our strategic capital allocation decisions, inter-segment asset transfers have and may continue to occur. In
these cases in segment reporting, the assets are transferred at their fair value, and no realization is recognized at the time of
transfer. Earnings are recognized upon realization events and transactions with third parties. Total Segment Earnings
represents the total segment earnings of KKR’s Asset Management, Insurance and Strategic Holdings segments.
Asset Management Segment Earnings
Asset management segment earnings is the segment profitability measure used to make operating decisions and to
assess the performance of the Asset Management segment. This measure is presented before income taxes and is comprised
of: (i) Fee Related Earnings, (ii) Realized Performance Income, (iii) Realized Performance Income Compensation, (iv) Realized
Investment Income, and (v) Realized Investment Income Compensation. Asset Management Segment Earnings excludes the
impact of: (i) unrealized gains (losses) on investments, (ii) unrealized carried interest, and (iii) unrealized carried interest
compensation. Management fees earned by KKR as the adviser, manager or sponsor for its investment funds, vehicles and
accounts, including its Global Atlantic insurance companies and Strategic Holdings segment, are included in Asset
Management Segment Earnings.
Insurance Operating Earnings
Insurance Operating Earnings is the segment profitability measure used to make operating decisions and to assess the
performance of the Insurance segment. This measure is presented before income taxes and is comprised of: (i) Net
Investment Income, (ii) Net Cost of Insurance, and (iii) General, Administrative, and Other Expenses. Insurance Operating
Earnings excludes the impact of: (i) investment gains (losses) which include realized gains (losses) related to asset/liability
matching investment strategies and unrealized investment gains (losses) and (ii) non-operating changes in policy liabilities and
derivatives which includes (a) changes in the fair value of market risk benefits and other policy liabilities measured at fair
value and related benefit payments, (b) fees attributed to guaranteed benefits, (c) derivatives used to manage the risks
associated with policy liabilities, and (d) losses at contract issuance on payout annuities. Insurance Operating Earnings
includes (i) realized gains and losses not related to asset/liability matching investment strategies and (ii) the investment
management costs that are earned by our Asset Management segment as the investment adviser of the Global Atlantic
insurance companies.
Strategic Holdings Segment Earnings
Strategic Holdings Segment Earnings is the segment profitability measure used to make operating decisions and to assess
the performance of the Strategic Holdings segment. This measure is presented before income taxes and is comprised of:
Dividends, Net and Net Realized Investment Income. Strategic Holdings Segment Earnings excludes the impact of unrealized
gains (losses) on investments. Strategic Holdings Segment Earnings includes management fees and performance fee expenses
that are earned by the Asset Management segment.
Fee Related Earnings
Fee related earnings is a performance measure used to assess the Asset Management segment’s generation of earnings
from revenues that are measured and received on a more recurring basis as compared to KKR’s investing earnings. KKR
believes this measure is useful to stockholders as it provides additional insight into the profitability of our fee generating asset
management and capital markets businesses. FRE equals (i) Management Fees, including fees paid by the Insurance and
Strategic Holdings segments to the Asset Management segment and fees paid by Ivy vehicles and other reinsurance vehicles,
(ii) Transaction and Monitoring Fees, Net and (iii) Fee Related Performance Revenues, less (x) Fee Related Compensation, and
(y) Other Operating Expenses.
Fee Related Performance Revenues refers to the realized portion of performance fees from certain AUM that has an
indefinite term and for which there is no immediate requirement to return invested capital to investors upon the realization
of investments. Fee related performance revenues consists of performance fees (i) expected to be received from our
investment funds, vehicles and accounts on a recurring basis, and (ii) that are not dependent on a realization event involving
investments held by the investment fund, vehicle or account.
Fee Related Compensation refers to the compensation expense, excluding equity-based compensation, paid from (i)
Management Fees, (ii) Transaction and Monitoring Fees, Net, and (iii) Fee Related Performance Revenues.
Other Operating Expenses represents the sum of (i) occupancy and related charges and (ii) other operating expenses.
Strategic Holdings Operating Earnings
Strategic Holdings Operating Earnings is a performance measure used to assess the firm’s earnings from companies and
businesses reported through its Strategic Holdings segment. Strategic Holdings Operating Earnings currently consists of
earnings derived from dividends that the firm receives from businesses acquired through the firm’s participation in our core
private equity strategy. Strategic Holdings Operating Earnings currently equals dividends less management fees that are
earned by our Asset Management segment. This measure is used by management to assess the Strategic Holdings segment’s
generation of earnings from revenues that are measured and received on a more recurring basis than, and are not dependent
on, realizations from investment activities.
Total Operating Earnings
Total Operating Earnings is a performance measure that represents the sum of (i) FRE, (ii) Insurance Operating Earnings,
and (iii) Strategic Holdings Operating Earnings. KKR believes this measure is useful to stockholders as it provides additional
insight into the profitability of the most recurring forms of earnings from each of KKR’s segments as compared to investing
earnings.
Total Investing Earnings
Total Investing Earnings is a performance measure that represents the sum of (i) Net Realized Performance Income and
(ii) Net Realized Investment Income. KKR believes this measure is useful to stockholders as it provides additional insight into
the earnings of KKR’s segments from the realization of investments.
Total Asset Management Segment Revenues
Total Asset Management Segment Revenues is a performance measure that represents the realized revenues of the Asset
Management segment (which excludes unrealized carried interest and unrealized gains (losses) on investments) and is the
sum of (i) Management Fees, (ii) Transaction and Monitoring Fees, Net, (iii) Fee Related Performance Revenues, (iv) Realized
Performance Income, and (v) Realized Investment Income. Asset Management Segment Revenues excludes Realized
Investment Income earned based on the performance of businesses presented in the Strategic Holdings segment. KKR
believes that this performance measure is useful to stockholders as it provides additional insight into all forms of realized
revenues generated by our Asset Management segment.
Key Operating and Capital Metrics
Assets Under Management
Assets under management represent the assets managed (including core private equity), advised or sponsored by KKR
from which KKR is entitled to receive management fees or performance income (currently or upon a future event), general
partner capital, and assets managed, advised or sponsored by our strategic BDC partnership and the hedge fund and other
managers in which KKR holds an ownership interest. We believe this measure is useful to stockholders as it provides
additional insight into the capital raising activities of KKR and its hedge fund and other managers and the overall activity in
their investment funds and other managed or sponsored capital. KKR calculates the amount of AUM as of any date as the sum
of: (i) the fair value of the investments of KKR's investment funds and certain co-investment vehicles; (ii) uncalled capital
commitments from these funds, including uncalled capital commitments from which KKR is currently not earning
management fees or performance income; (iii) the asset value of the Global Atlantic insurance companies; (iv) the par value of
outstanding CLOs; (v) KKR's pro rata portion of the AUM of hedge fund and other managers in which KKR holds an ownership
interest; (vi) all of the AUM of KKR's strategic BDC partnership; (vii) the acquisition cost of invested assets of certain non-US
real estate investment trusts and (viii) the value of other assets managed or sponsored by KKR. The pro rata portion of the
AUM of hedge fund and other managers is calculated based on KKR’s percentage ownership interest in such entities
multiplied by such entity’s respective AUM. KKR's definition of AUM (i) is not based on any definition of AUM that may be set
forth in the governing documents of the investment funds, vehicles, accounts or other entities whose capital is included in this
definition, (ii) includes assets for which KKR does not act as an investment adviser, and (iii) is not calculated pursuant to any
regulatory definitions.
Capital Invested
Capital invested is the aggregate amount of capital invested by (i) KKR’s investment funds (including core private equity)
and Global Atlantic insurance companies, (ii) KKR's Principal Activities business line as a co-investment, if any, alongside KKR’s
investment funds, and (iii) KKR's Principal Activities business line in connection with a syndication transaction conducted by
KKR's Capital Markets business line, if any. Capital invested is used as a measure of investment activity at KKR during a given
period. We believe this measure is useful to stockholders as it provides a measure of capital deployment across KKR’s business
lines. Capital invested includes investments made using investment financing arrangements like credit facilities, as applicable.
Capital invested excludes (i) investments in certain leveraged credit strategies, (ii) capital invested by KKR’s Principal Activities
business line that is not a co-investment alongside KKR’s investment funds, and (iii) capital invested by KKR’s Principal
Activities business line that is not invested in connection with a syndication transaction by KKR’s Capital Markets business line.
Capital syndicated by KKR's Capital Markets business line to third parties other than KKR’s investment funds or Principal
Activities business line is not included in capital invested.
Fee Paying AUM
Fee paying AUM represents only the AUM from which KKR is entitled to receive management fees. We believe this
measure is useful to stockholders as it provides additional insight into the capital base upon which KKR earns management
fees. FPAUM is the sum of all of the individual fee bases that are used to calculate management fees and differs from AUM in
the following respects: (i) assets and commitments from which KKR is not entitled to receive a management fee are excluded
(e.g., assets and commitments with respect to which it is entitled to receive only performance income or is otherwise not
currently entitled to receive a management fee) and (ii) certain assets, primarily in its private equity funds, are reflected based
on capital commitments and invested capital as opposed to fair value because fees are not impacted by changes in the fair
value of underlying investments.
Uncalled Commitments
Uncalled commitments is the aggregate amount of unfunded capital commitments that KKR’s investment funds and
carry-paying co-investment vehicles (including core private equity) have received from fund investors to contribute capital to
fund future investments, and the amount of uncalled commitments is not reduced by capital invested using borrowings under
an investment fund’s subscription facility until capital is called from our fund investors. We believe this measure is useful to
stockholders as it provides additional insight into the amount of capital that is available to KKR’s investment funds and carry
paying co-investment vehicles to make future investments. Uncalled commitments are not reduced for investments
completed using fund-level investment financing arrangements or investments we have committed to make but remain
unfunded at the reporting date.
Analysis of Condensed Consolidated Results of Operation****s (GAAP Basis - Unaudited)
The following is a discussion of our condensed consolidated results of operations on a GAAP basis for the three months
ended March 31, 2026 and 2025. You should read this discussion in conjunction with the financial statements and related
notes included elsewhere in this report. For a more detailed discussion of the factors that affected our segment results in
these periods, see "—Analysis of Segment Operating Results." See "Risk Factors" in our Annual Report and "—Business
Environment" in this report for more information about risks, uncertainties, and other market and economic conditions that
may impact our business, financial performance, operating results, and valuations.
Effective beginning in the first quarter of 2026, KKR has modified the presentation of certain operating expenses in its
consolidated statements of operations. Amounts previously presented separately as “Insurance Expenses” and “General,
Administrative and Other” are now presented in a single line item, “Policy and Other Operating Expense”. Prior-period
amounts have been reclassified to conform to the current-period presentation. This change in presentation had no impact on
previously reported consolidated total expenses, income before taxes, and net income attributable to KKR.
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Revenues | |||||
| Asset Management and Strategic Holdings | |||||
| Fees and Other | $1,186,842 | $886,810 | $300,032 | ||
| Capital Allocation-Based Income (Loss) | 841,853 | 1,159,105 | (317,252) | ||
| 2,028,695 | 2,045,915 | (17,220) | |||
| Insurance | |||||
| Net Premiums | 561,970 | 323,364 | 238,606 | ||
| Policy Fees | 325,694 | 338,473 | (12,779) | ||
| Net Investment Income | 1,989,064 | 1,783,280 | 205,784 | ||
| Net Investment-Related Gains (Losses) | (652,697) | (1,436,337) | 783,640 | ||
| Other Income | 65,257 | 55,488 | 9,769 | ||
| 2,289,288 | 1,064,268 | 1,225,020 | |||
| Total Revenues | 4,317,983 | 3,110,183 | 1,207,800 | ||
| Expenses | |||||
| Asset Management and Strategic Holdings | |||||
| Compensation and Benefits | 1,051,681 | 1,333,103 | (281,422) | ||
| Occupancy and Related Charges | 37,837 | 34,465 | 3,372 | ||
| General, Administrative and Other | 381,729 | 300,332 | 81,397 | ||
| 1,471,247 | 1,667,900 | (196,653) | |||
| Insurance | |||||
| Net Policy Benefits and Claims (including market risk benefit (gain) loss of $86,338 and $221,394, respectively; remeasurement (gain) loss on policy liabilities: $— and $42,252, respectively.) | 1,880,028 | 1,708,294 | 171,734 | ||
| Amortization of Policy Acquisition Costs | 142,921 | 97,971 | 44,950 | ||
| Interest Expense | 73,881 | 69,571 | 4,310 | ||
| Policy and Other Operating Expense | 302,058 | 287,219 | 14,839 | ||
| 2,398,888 | 2,163,055 | 235,833 | |||
| Total Expenses | 3,870,135 | 3,830,955 | 39,180 | ||
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Investment Income (Loss) - Asset Management and Strategic Holdings | |||||
| Net Gains (Losses) from Investment Activities | (316,379) | 1,086,591 | (1,402,970) | ||
| Dividend Income | 268,017 | 273,890 | (5,873) | ||
| Interest Income | 741,591 | 785,857 | (44,266) | ||
| Interest Expense | (678,187) | (654,499) | (23,688) | ||
| Total Investment Income (Loss) | 15,042 | 1,491,839 | (1,476,797) | ||
| Income (Loss) Before Taxes | 462,890 | 771,067 | (308,177) | ||
| Income Tax Expense (Benefit) | 185,385 | 86,569 | 98,816 | ||
| Net Income (Loss) | 277,505 | 684,498 | (406,993) | ||
| Net Income (Loss) Attributable to Redeemable Noncontrolling Interests | (983) | 8,494 | (9,477) | ||
| Net Income (Loss) Attributable to Noncontrolling Interests | (126,741) | 861,928 | (988,669) | ||
| Net Income (Loss) Attributable to KKR & Co. Inc. | 405,229 | (185,924) | 591,153 | ||
| Series D Mandatory Convertible Preferred Stock Dividends | 40,430 | — | 40,430 | ||
| Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders | $364,799 | $(185,924) | $550,723 |
Condensed Consolidated Results of Operations (GAAP Basis - Unaudited) - Asset
Management and Strategic Holdings
Revenues
For the three months ended March 31, 2026 and 2025, revenues consisted of the following:
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Management Fees | $759,829 | $531,699 | $228,130 | ||
| Fee Credits | (140,699) | (136,262) | (4,437) | ||
| Transaction Fees | 378,083 | 388,329 | (10,246) | ||
| Monitoring Fees | 59,822 | 48,671 | 11,151 | ||
| Incentive Fees | 47,398 | 1,328 | 46,070 | ||
| Expense Reimbursements | 55,568 | 32,208 | 23,360 | ||
| Consulting Fees | 26,841 | 20,837 | 6,004 | ||
| Total Fees and Other | 1,186,842 | 886,810 | 300,032 | ||
| Carried Interest | 816,031 | 1,068,262 | (252,231) | ||
| General Partner Capital Interest | 25,822 | 90,843 | (65,021) | ||
| Total Capital Allocation-Based Income (Loss) | 841,853 | 1,159,105 | (317,252) | ||
| Total Revenues | $2,028,695 | $2,045,915 | $(17,220) |
Fees and Other
Total Fees and Other for the three months ended March 31, 2026, increased compared to the three months ended
March 31, 2025, primarily as a result of an increase in management fees and to a lesser extent incentive fees, which were
partially offset by a decrease in transaction fees.
For a more detailed discussion of the factors that affected our transaction fees during the period, see "—Analysis of Asset
Management Segment Operating Results."
The increase in management fees was primarily attributable to (i) management fees commencing at North America Fund
XIV in the second quarter of 2025, (ii) management fees earned on new capital raised over the past twelve months by our
private equity and infrastructure K-Series vehicles, and (iii) management fees earned on new capital raised over the past
twelve months at Global Infrastructure Investors V. The increase was partially offset by (i) a decrease in management fees
earned from North America Fund XIII as a result of entering its post-investment period in the second quarter of 2025 and now
paying fees based on invested capital rather than committed capital and at a lower fee rate, and (ii) a decrease in
management fees earned from Americas Fund XII due to a step-down in the management fee rate in the third quarter of
Management fees due from consolidated investment funds and other investment vehicles are eliminated upon
consolidation under GAAP. However, because these amounts are funded by, and earned from, noncontrolling interests, upon
consolidation under GAAP, KKR's allocated share of the net income from the consolidated investment funds and other
investment vehicles is increased by the amount of fees that are eliminated. Accordingly, net income (loss) attributable to KKR
would be unchanged if such investment funds and other investment vehicles were not consolidated. For a more detailed
discussion on the factors that affect our management fees during the period, see "—Analysis of Asset Management Segment
Operating Results."
Fee credits increased compared to the prior period as a result of (i) a higher level of transaction fees in our Private Equity
business line and (ii) a higher level of monitoring fees in our Private Equity and Real Assets business lines. Fee credits owed to
consolidated investment funds and other investment vehicles are eliminated upon consolidation under GAAP. However,
because these amounts are owed to noncontrolling interests, upon consolidation under GAAP, KKR's allocated share of the
net income from the consolidated investment funds and other investment vehicles is decreased by the amount of fee credits
that are eliminated. Accordingly, net income (loss) attributable to KKR would be unchanged if such investment funds and
other investment vehicles were not consolidated. Transaction and monitoring fees earned from KKR portfolio companies are
not eliminated upon consolidation because those fees are earned from companies which are not consolidated. Furthermore,
transaction fees earned in our capital markets business are not shared with fund investors. Accordingly, certain transaction
fees are reflected in our revenues without a corresponding fee credit.
Capital Allocation-Based Income (Loss)
Capital Allocation-Based Income (Loss) for the three months ended March 31, 2026, was positive primarily due to the net
appreciation of the underlying investments in many of our unconsolidated carry-earning investment vehicles, most notably
Global Impact Fund II, our private equity and infrastructure K-Series vehicles, and Asian Fund IV. Capital Allocation-Based
Income (Loss) for the three months ended March 31, 2025, was positive primarily due to the net appreciation of the
underlying investments in many of our unconsolidated carry-earning investment vehicles, most notably Asian Fund IV, North
America Fund XIII, and Global Infrastructure Fund IV.
KKR calculates the carried interest that would be due to KKR for each investment fund, pursuant to the fund agreements,
as if the fair value of the underlying investments were realized as of the reporting date, irrespective of whether such amounts
have been realized. Since the fair value of the underlying investments varies between reporting periods, it is necessary to
make adjustments to the amounts recorded as carried interest to reflect either (i) positive performance, resulting in an
increase in the carried interest allocated to the general partner or (ii) negative performance that would cause the amount due
to KKR to be less than the amount previously recognized, resulting in a negative adjustment to carried interest allocated to
the general partner. In each case, it is necessary to calculate the carried interest on cumulative results compared to the
carried interest recorded to date and to make the required positive or negative adjustments.
Net Gains (Losses) from Investment Activities
Net Gains (Losses) from Investment Activities for the three months ended March 31, 2026
The net losses from investment activities for the three months ended March 31, 2026, were comprised of net realized
gains of $106.5 million and net unrealized losses of $(422.9) million. See Note 4 "Net Gains (Losses) from Investment Activities
– Asset Management and Strategic Holdings" in our financial statements for detail of net gains and losses from Investment
Activities by asset class.
Investment gains and losses relating to our general partner capital interest in our unconsolidated funds are not reflected
in our discussion and analysis of Net Gains (Losses) from Investment Activities. Our economics associated with these
investment gains and losses are reflected in Capital Allocation-Based Income (Loss) as described above.
For the three months ended March 31, 2026, net gains (losses) from investment activities were driven primarily by (i)
mark-to-market losses on our investment in Barracuda Networks, Inc. (technology sector) and PetVet Care Centers, LLC
(healthcare sector), (ii) mark-to-market losses on certain investments held in consolidated CLOs, and (iii) mark-to-market
losses at certain consolidated credit funds. These mark-to-market losses were partially offset by (i) mark-to-market gains on
our investment in 1-800 Contacts, Inc. (health care sector) and USI, Inc. (financial services sector) and (ii) mark-to-market
gains on certain foreign exchange forward contracts.
Net investment gains (losses) for each asset class are influenced by the valuation methodology applied to each asset, as
well as factors specific to each investment. For the three months ended March 31, 2026, net investment gains (losses) were
primarily generated in the following asset classes:
- Private Equity (including core private equity), which were primarily impacted by a mix of the operating performance
of certain portfolio companies and market multiples changes across various sectors. Changes in market multiples
varied across regions and sectors used in the market comparables methodology for the valuation of Level III
investments; and
- Real Assets, which primarily benefited from the overall positive operating performance of certain infrastructure and
energy assets. Changes in market multiples varied across regions and sectors used in the market comparables
methodology for the valuation of Level III investments.
See "Risk Factors" in our Annual Report and "—Business Environment" for more information about the factors that may
impact our business, financial performance, operating results, and valuation.
Net Gains (Losses) from Investment Activities for the three months ended March 31, 2025
The net gains from investment activities for the three months ended March 31, 2025, were comprised of net realized
gains of $70.2 million and net unrealized gains of $1,016.4 million. See Note 4 "Net Gains (Losses) from Investment Activities -
Asset Management and Strategic Holdings" in our financial statements for detail of realized and unrealized gains and losses
from Investment Activities by asset class.
Investment gains and losses relating to our general partner capital interest in our unconsolidated funds are not reflected
in our discussion and analysis of Net Gains (Losses) from Investment Activities. Our economics associated with these
investment gains and losses are reflected in Capital Allocation-Based Income (Loss) as described above.
For the three months ended March 31, 2025, net gains (losses) from investment activities were driven primarily by mark-
to-market gains primarily relating to our investments in USI, Inc. and IVI-RMA Global, S.L. (health care sector), and PO
Söderberg & Partner Holding AB (financial services sector). These mark-to-market gains were partially offset by mark-to-
market losses primarily relating to our investment in PetVet Care Centers, LLC and on certain investments held in consolidated
CLOs.
The factors that affect each investment strategy vary depending on the nature of the asset class and the valuation
methodology employed. For the three months ended March 31, 2025, net investment gains (losses) were primarily generated
in the following asset classes:
- Private Equity (including core private equity), which were primarily impacted by overall positive operating
performance of certain portfolio companies. Changes in market multiples varied across regions and sectors used in
the market comparables methodology for the valuation of Level III investments; and
- Infrastructure, which primarily benefited from the overall positive operating performance of certain infrastructure
assets, partially offset by slightly higher cost of capital assumptions. Changes in market multiples varied across
regions and sectors used in the market comparables methodology for the valuation of Level III investments.
Dividend Income
During the three months ended March 31, 2026, dividend income was primarily from (i) our investment in USI, Inc.
(financial services sector) and (ii) various investments in certain of our consolidated opportunistic real estate equity funds.
During the three months ended March 31, 2025, dividend income was primarily from (i) our investments in Atlantic Aviation
FBO Inc. (infrastructure: transportation sector) and Grupo Alvic FR Mobiliario (retail sector) and (ii) various investments in
certain of our consolidated opportunistic real estate equity funds.
Significant dividends from portfolio companies and consolidated funds are generally not recurring quarterly dividends,
and while they may occur in the future, their size and frequency are variable. For a discussion of other factors that affected
KKR's dividend income, see "—Analysis of Asset Management Segment Operating Results."
Interest Income
The decrease in interest income during the three months ended March 31, 2026, compared to the three months ended
March 31, 2025, was primarily due to (i) the impact of lower market interest rates, such as the Secured Overnight Financing
Rate (“SOFR”), during the current period on floating rate credit investments held in consolidated CLOs and certain of our
consolidated alternative credit funds and (ii) investment monetizations at certain consolidated alternative credit funds
subsequent to March 31, 2025. The decrease was partially offset by the impact of closing CLOs that are consolidated
subsequent to March 31, 2025. For a discussion of other factors that affected KKR's interest income, see "—Analysis of Asset
Management Segment Operating Results."
Interest Expense
The increase in interest expense during the three months ended March 31, 2026, compared to the three months ended
March 31, 2025, was primarily due to (i) the impact of closing CLOs that were consolidated subsequent to March 31, 2025,
and (ii) an increase in the amount of borrowings outstanding. The increase was partially offset by a decrease due to the
impact of lower market interest rates, such as SOFR, during the current period on floating rate debt obligations held in
consolidated CLOs and at certain consolidated funds and other investment vehicles. For a discussion of other factors that
affected KKR's interest expense, see "—Key Segment and Non-GAAP Performance Measures."
Expenses
Compensation and Benefits
The decrease in compensation and benefits during the three months ended March 31, 2026, compared to the three
months ended March 31, 2025, was primarily due to a lower level of accrued carried interest compensation driven by a lower
level of carried interest income earned in the current period.
Occupancy and Related Charges
The increase in occupancy and related charges during the three months ended March 31, 2026, compared to the three
months ended March 31, 2025, was primarily due to new office leases commencing subsequent to March 31, 2025.
General, Administrative and Other
The increase in general, administrative and other expenses during the three months ended March 31, 2026, compared to
the three months ended March 31, 2025, was primarily due to a higher level of expenses reimbursable from our investment
funds and a higher level of information technology and corporate general and administrative costs.
Condensed Consolidated Results of Operations (GAAP Basis - Unaudited) - Insurance
Revenues
For the three months ended March 31, 2026 and 2025, revenues consisted of the following:
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Net Premiums | $561,970 | $323,364 | $238,606 | ||
| Policy Fees | 325,694 | 338,473 | (12,779) | ||
| Net Investment Income | 1,989,064 | 1,783,280 | 205,784 | ||
| Net Investment-Related Gains (Losses) | (652,697) | (1,436,337) | 783,640 | ||
| Other Income | 65,257 | 55,488 | 9,769 | ||
| Total Insurance Revenues | $2,289,288 | $1,064,268 | $1,225,020 |
Net Premiums
Net premiums increased for the three months ended March 31, 2026, as compared to the three months ended March 31,
2025, primarily due to an increase in new premiums earned on assumed flow payout annuities and direct pension risk transfer
in the institutional market channel, and preneed insurance products in the individual market channel (all with either life
contingencies or morbidity risk.) Initial premiums from new business are generally offset by a comparable change in policy
reserves reported within net policy benefits and claims (as discussed below under “Expenses—Net policy benefits and
claims”).
Net Investment Income
Net investment income increased for the three months ended March 31, 2026, as compared to the three months ended
March 31, 2025, primarily due to (i) increased average assets under management due to growth in assets in the institutional
and individual market channels as a result of the cumulative impact of new business volumes in the preceding twelve months,
and (ii) an increase in average portfolio yields due to portfolio rotation into higher yielding fixed maturity debt securities, and
investment in alternative asset classes, such as real assets.
Net Investment-Related Gains (Losses)
The components of net investment-related gains (losses) were as follows:
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Equity Index Options | $(332,019) | $(339,801) | $7,782 | ||
| Interest Rate Contracts | (64,847) | 174,989 | (239,836) | ||
| Equity Futures Contracts | 21,109 | 28,694 | (7,585) | ||
| Foreign Exchange and Other Derivative Contracts | 80,822 | (75,833) | 156,655 | ||
| Funds Withheld Payable Embedded Derivatives | 279,317 | (423,563) | 702,880 | ||
| Funds Withheld Receivable Embedded Derivatives | (18,830) | (24,066) | 5,236 | ||
| Net Gains (Losses) on Derivative Instruments | (34,448) | (659,580) | 625,132 | ||
| Net Other Investment Gains (Losses) | (618,249) | (776,757) | 158,508 | ||
| Net Investment-Related Gains (Losses) | $(652,697) | $(1,436,337) | $783,640 |
Net Gains (Losses) on Derivative Instruments
The increase in the fair value of embedded derivatives on funds withheld at interest payable for the three months ended
March 31, 2026 was primarily driven by the changes in the fair value of the underlying investments in the funds withheld at
interest payable portfolio, which is primarily comprised of fixed maturity securities (designated as trading for accounting
purposes), mortgage and other loan receivables, and real asset investments. The underlying investments in the funds
withheld at interest payable portfolio decreased in value during the three months ended March 31, 2026 and increased during
the three months ended March 31, 2025, resulting in, respectively a gain and a loss on the related embedded derivative. The
changes in fair value of the underlying portfolios are primarily due to market interest changes – during the three months
ended March 31, 2026, market interest rates generally increased (for example, yields on 10 and 30-year U.S. Treasury
securities were generally higher in absolute terms and increased during the period). In contrast, during the three months
ended March 31, 2025, market interest rates generally decreased (for example, yields on 10 and 30-year U.S. Treasury
securities were generally lower in absolute terms, and declining during the period).
The decrease in the fair value of interest rate contracts was primarily driven by an increase in market interest rates during
the three months ended March 31, 2026, as compared to a decrease in market interest rates during the three months ended
March 31, 2025, resulting in a loss on interest rate contracts for the three months ended March 31, 2026, as compared to a
gain on interest rate contracts for the three months ended March 31, 2025.
The increase in the fair value of foreign exchange and other derivative contracts was primarily driven by (i) an
appreciation of the U.S. dollar against the euro and British pound during the three months ended March 31, 2026, as
compared to a depreciation of the U.S. dollar against the euro and British pound during the three months ended March 31,
2025, and (ii) an increase in the notional amount of foreign exchange derivative contracts outstanding.
The increase in the fair value of equity index options was primarily driven by the performance of the underlying indices.
Global Atlantic purchases equity index options to hedge the market risk of embedded derivatives in indexed universal life and
fixed-indexed annuity products (the change in which is accounted for in net policy benefits and claims). The majority of Global
Atlantic's equity index options are based on the S&P 500 Index, which decreased during both the three months ended March
31, 2026 and 2025. In addition, the average notional amount of equity market contracts outstanding as of March 31, 2026,
increased as compared to March 31, 2025.
Net Other Investment Gains (Losses)
The components of net other investment gains (losses) were as follows:
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Realized Gains (Losses) on Investments Not Supporting Asset- Liability Matching Strategies | $— | $9,520 | $(9,520) | ||
| Realized Gains (Losses) on Available-for-Sale Fixed Maturity Securities | (97,816) | (1,117,445) | 1,019,629 | ||
| Credit Loss Allowances | (228,416) | (84,670) | (143,746) | ||
| Unrealized Gains (Losses) on Fixed Maturity Securities Classified as Trading | (284,283) | 259,207 | (543,490) | ||
| Unrealized Gains (Losses) on Other Investments Accounted Under a Fair-Value Option and Equity Investments | (42,275) | 42,075 | (84,350) | ||
| Unrealized Gains (Losses) on Real Assets | (12,269) | 19,329 | (31,598) | ||
| Realized Gains (Losses) on Real Assets | 16,775 | 10,501 | 6,274 | ||
| Realized Gains (Losses) on Funds Withheld at Interest Payable Portfolio | 29,007 | 75,986 | (46,979) | ||
| Realized Gains (Losses) on Funds Withheld at Interest Receivable Portfolio | (1,775) | (50,267) | 48,492 | ||
| Foreign Exchange Gains (Losses) on Non-USD Denominated Investments | (50,308) | 76,093 | (126,401) | ||
| Other | 53,111 | (17,086) | 70,197 | ||
| Net Other Investment-Related Gains (Losses) | $(618,249) | $(776,757) | $158,508 |
The increase in net other investment-related gains (losses) for the three months ended March 31, 2026, as compared to
the three months ended March 31, 2025, was primarily due to a decrease in realized losses on available-for-sale fixed
maturity securities due to a decrease in portfolio repositioning trades during the current quarter. Offsetting this increase was
(i) a decrease in unrealized gains (losses) on fixed maturity securities classified as trading due to an increase in market interest
rates during the quarter, (ii) an increase in credit loss allowances on mortgage and other loan receivables and available-for-
sale fixed maturity securities during the three months ended March 31, 2026, (iii) a decrease in foreign exchange gains
(losses) on non-USD denominated investments due to the appreciation of the U.S. dollar against the euro and British pound
during three months ended March 31, 2026, and an increase in the notional amount of non-USD denominated investments
(largely offset by the change in foreign exchange derivative contracts noted above under “Net Gains (Losses) on Derivative
Instruments”), and (vi) a decrease in unrealized gains (losses) on investments accounted under a fair value option and real
assets, primarily due to unfavorable changes in the related market segment multiples.
Expenses
Net Policy Benefits and Claims
Net policy benefits and claims increased for the three months ended March 31, 2026, as compared to the three months
ended March 31, 2025, primarily due to (i) an increase in new business flows from assumed flow payout annuities, direct
pension risk transfer, and preneed insurance products (all with either life contingencies or morbidity risk) in the three months
ended March 31, 2026, as compared to the three months ended March 31, 2025, and (ii) higher average funding costs due to
higher crediting rates and the ordinary-course run-off of older business originated in a low interest rate environment.
The above increases in net policy benefits and claims were offset in part by (i) a decrease in market risk benefits losses for
the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, which was largely driven
by an increase in long-term market interest rates (such as yields on 10- and 30-year U.S Treasury securities) and wider credit
spreads for the three months ended March 31, 2026, as compared to a decrease in long-term market interest rates and
narrower credit spreads during the three months ended March 31, 2025, (ii) the change in the value of embedded derivatives
in Global Atlantic’s fixed indexed annuity products; (As discussed above under "—Consolidated Results of Operations (GAAP
Basis)—Revenues—Net investment-related gains (losses)", Global Atlantic purchases equity index options in order to hedge
this risk, the fair value changes of which are accounted for in gains (losses) on derivative instruments, and generally offsets
the change in embedded derivative fair value reported in net policy benefits and claims), and (iii) the non-recurrence of
unfavorable impacts related to the assumption review for the three months ended March 31, 2025 described below.
The assumptions on which reserves, deferred revenue and expenses are based are intended to represent an estimate of
the benefits that are expected to be payable to, and fees or premiums that are expected to be collectible from, policyholders
in future periods. Global Atlantic reviews the adequacy of its reserves, deferred revenue and expenses, and the assumptions
underlying those items at least annually, usually in the third quarter, referred to as an “assumption review.” For the three
months ended March 31, 2025, there was a net unfavorable assumption review impact of $42.3 million on income before
taxes, which was primarily due to a change in the activation assumption related to certain benefit riders on fixed-indexed
annuities.
Amortization of Policy Acquisition Costs
Amortization of policy acquisition costs increased for the three months ended March 31, 2026, as compared to the three
months ended March 31, 2025, primarily due to (i) an increase in amortization of cost-of-reinsurance assets, and (ii) an
increase in amortization of deferred acquisition costs primarily driven by acquisition costs deferred and amortized due to
growth in annuity and preneed insurance new business volumes.
Interest Expense
Interest expense increased for the three months ended March 31, 2026, as compared to the three months ended
March 31, 2025, primarily due to an increase in total debt outstanding.
Policy and Other Operating Expense
Policy and other operating expense increased for the three months ended March 31, 2026, as compared to the three
months ended March 31, 2025, primarily due to (i) an increase in compensation expense, (ii) an increase in amortization of
certain insurance distribution intangibles, and (iii) an increase in administrative and professional fees. Offsetting these
increases was a decrease in commission expense due to a decrease in individual channel new business volumes, primarily in
fixed-rate annuities, as compared against the three months ended March 31, 2025.
Other Condensed Consolidated Results of Operations (GAAP Basis - Unaudited)
Income Tax Expense (Benefit)
Income tax expense was $185 million for the three months ended March 31, 2026, compared to $87 million for the three
months ended March 31, 2025. The effective tax rate also increased and was primarily driven by the impact of noncontrolling
interests, the income (loss) of which is not subject to taxes that are payable by KKR & Co. Inc. and its subsidiaries. As reported
in Note 18 "Income Taxes" the calculation of the effective tax rate of 40% for the three months ended March 31, 2026,
includes the impact of investment losses attributable to noncontrolling interest holders. For a discussion of factors that
impacted KKR's tax provision, see Note 18 "Income Taxes" in our financial statements included elsewhere in this report.
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests
Net income (loss) attributable to redeemable noncontrolling interests relates primarily to net income (loss) attributable
to third-party limited partner interests in consolidated investment funds and other investment vehicles when the
noncontrolling interests have redemption features that are not solely within the control of KKR. Net income (loss) attributable
to redeemable noncontrolling interests decreased for the three months ended March 31, 2026, as compared to the three
months ended March 31, 2025, primarily due to net losses from investment activities at these consolidated investment funds
and other investment vehicles.
Net Income (Loss) Attributable to Noncontrolling Interests
Net income (loss) attributable to noncontrolling interests relates primarily to net income (loss) attributable to (i) non-
redeemable third-party limited partner interests in consolidated investment funds and other investment vehicles and (ii)
exchangeable securities representing ownership interests in KKR Group Partnership until they are exchanged for common
stock of KKR & Co. Inc. Net income (loss) attributable to noncontrolling interests decreased for the three months ended March
31, 2026, as compared to the three months ended March 31, 2025, primarily due to net losses from investment activities at
certain of our consolidated investment funds and other investment vehicles.
Net Income (Loss) Attributable to KKR & Co. Inc.
Net income (loss) attributable to KKR & Co. Inc. for the three months ended March 31, 2026, was net positive as
compared to a net loss for the three months ended March 31, 2025, primarily due to (i) a lower level of insurance investment-
related losses and (ii) a higher level of asset management fee related income, which were partially offset by (i) a lower level of
capital allocation-based income from our asset management business and (ii) mark-to-market investment-related losses
attributable to KKR & Co. Inc. from our asset management and strategic holdings activities.
Condensed Consolidated Statements of Financial Condition (GAAP Basis - Unaudited)
Please see our consolidated statements of financial condition on a GAAP basis as of March 31, 2026 and December 31,
2025 in our financial statements included in this report.
KKR & Co. Inc. Stockholders’ Equity - Common Stock decreased from December 31, 2025 primarily due to (i) unrealized
losses on available for sale securities from Global Atlantic that are recorded in other comprehensive income, (ii) dividends to
common and preferred stockholders, and (iii) common stock repurchases, which were partially offset by net income
attributable to KKR & Co. Inc. common stockholders.
Condensed Consolidated Statements of Cash Flows (GAAP Basis - Unaudited)
The following is a discussion of our consolidated cash flows for the three months ended March 31, 2026 and 2025. You
should read this discussion in conjunction with the financial statements and related notes included elsewhere in this report.
The consolidated statements of cash flows include the cash flows of our consolidated entities, which include certain
consolidated investment funds, CLOs and certain variable interest entities formed by Global Atlantic notwithstanding the fact
that we may hold only a minority economic interest in those investment funds and CFEs. The assets of our consolidated
investment funds and CFEs, on a gross basis, can be substantially larger than the assets of our business and, accordingly, could
have a substantial effect on the cash flows reflected in our consolidated statements of cash flows. The primary cash flow
activities of our consolidated funds and CFEs involve: (i) capital contributions from fund investors; (ii) using the capital of fund
investors to make investments; (iii) financing certain investments with indebtedness; (iv) generating cash flows through the
realization of investments; and (v) distributing cash flows from the realization of investments to fund investors. Because our
consolidated investment funds are treated as investment companies for accounting purposes, certain of these cash flow
amounts are included in our cash flows from operations.
Net Cash Provided (Used) by Operating Activities
Our net cash provided (used) by operating activities was $1.7 billion and $2.5 billion during the three months ended
March 31, 2026 and 2025, respectively. Our operating activities primarily included: (i) investments purchased (asset
management and strategic holdings), net of proceeds from investments (asset management and strategic holdings) of
$(0.2) billion and $(0.4) billion during the three months ended March 31, 2026 and 2025, respectively, (ii) net realized gains
(losses) on investments (asset management and strategic holdings) of $106.5 million and $70.2 million during the three
months ended March 31, 2026 and 2025, respectively, (iii) change in unrealized gains (losses) on investments (asset
management and strategic holdings) of $(0.4) billion and $1.0 billion during the three months ended March 31, 2026 and
2025, respectively, (iv) capital allocation-based income (loss) (asset management and strategic holdings) of $0.8 billion and
$1.2 billion during the three months ended March 31, 2026 and 2025, respectively, (v) net investment and policy liability-
related gains (losses) (insurance) of $(0.4) billion and $(1.7) billion during the three months ended March 31, 2026 and 2025,
respectively, and (vi) interest credited to policyholder account balances (net of policy fees) (insurance) of $1.4 billion and $1.2
billion during the three months ended March 31, 2026 and 2025, respectively. Investment funds are investment companies
under GAAP and reflect their investments and other financial instruments at fair value.
Net Cash Provided (Used) by Investing Activities
Our net cash provided (used) by investing activities was $2.3 billion and $(3.1) billion during the three months ended
March 31, 2026 and 2025, respectively. Our investing activities primarily included: (i) investments purchased (insurance), net
of proceeds from investments (insurance), of $2.4 billion and $(3.1) billion during the three months ended March 31, 2026
and 2025, respectively, (ii) acquisitions, net of cash acquired, of $(37.9) million during the three months ended March 31,
2026, and (iii) the purchase of fixed assets of $(27.4) million and $(20.8) million during the three months ended March 31,
2026 and 2025, respectively.
Net Cash Provided (Used) by Financing Activities
Our net cash provided (used) by financing activities was $(1.7) billion and $3.6 billion during the three months ended
March 31, 2026 and 2025, respectively. Our financing activities primarily included: (i) contributions from, net of distributions
to, our noncontrolling and redeemable noncontrolling interests of $(0.4) billion and $0.2 billion during the three months
ended March 31, 2026 and 2025, respectively, (ii) proceeds received, net of repayment of debt obligations, of $0.7 billion and
$(0.5) billion during the three months ended March 31, 2026 and 2025, respectively, (iii) proceeds from the issuance of Series
D Mandatory Convertible Preferred Stock (net of issuance cost) of $2.5 billion during the three months ended March 31,
2025, (iv) additions to, net of withdrawals from, contractholder deposit funds (insurance) of $(1.6) billion and $1.5 billion
during the three months ended March 31, 2026 and 2025, respectively, (v) common stock dividends of $(164.8) million and
$(155.4) million during the three months ended March 31, 2026 and 2025, respectively, and (vi) Series D Mandatory
Convertible Preferred Stock Dividends of $(40.4) million during the three months ended March 31, 2026.
Analysis of Segment Operating Results
The following is a discussion of the results of our business on a segment basis for the three months ended March 31, 2026
and 2025. You should read this discussion in conjunction with the information included under "—Analysis of Non-GAAP
Performance Measures" and the financial statements and related notes included elsewhere in this report. See "Risk Factors"
in our Annual Report and "—Business Environment" in this report for more information about factors that may impact our
business, financial performance, operating results, and valuations.
Analysis of Asset Management Segment Operating Results
The following tables set forth information regarding KKR's asset management segment operating results for the three
months ended March 31, 2026 and 2025.
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Management Fees | $1,192,504 | $917,334 | $275,170 | ||
| Transaction and Monitoring Fees, Net | 252,709 | 261,509 | (8,800) | ||
| Fee Related Performance Revenues | 23,762 | 21,277 | 2,485 | ||
| Fee Related Compensation | (257,195) | (210,021) | (47,174) | ||
| Other Operating Expenses | (195,405) | (167,496) | (27,909) | ||
| Fee Related Earnings | 1,016,375 | 822,603 | 193,772 | ||
| Realized Performance Income | 755,964 | 347,920 | 408,044 | ||
| Realized Performance Income Compensation | (558,773) | (259,931) | (298,842) | ||
| Realized Investment Income | 121,901 | 217,957 | (96,056) | ||
| Realized Investment Income Compensation | (18,285) | (32,694) | 14,409 | ||
| Asset Management Segment Earnings | $1,317,182 | $1,095,855 | $221,327 |
Management Fees
The following table presents management fees by business line:
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Management Fees | |||||
| Private Equity | $459,885 | $334,792 | $125,093 | ||
| Real Assets | 383,489 | 280,578 | 102,911 | ||
| Credit and Liquid Strategies | 349,130 | 301,964 | 47,166 | ||
| Total Management Fees | $1,192,504 | $917,334 | $275,170 |
The increase in Private Equity management fees during the three months ended March 31, 2026, was primarily
attributable to (i) management fees commencing at North America Fund XIV in the second quarter of 2025, and (ii)
management fees earned on new capital raised over the past twelve months at our private equity K-Series vehicles, net of
certain revenue sharing arrangements. The increase was partially offset by (i) a decrease in management fees earned from
North America Fund XIII as a result of entering its post-investment period in the second quarter of 2025, and now paying fees
based on invested capital rather than committed capital and at a lower fee rate, and (ii) a decrease in management fees
earned from Americas XII due to a step-down in the management fee rate in the third quarter of 2025. During the three
months ended March 31, 2026, approximately $30.1 million of management fees were earned on new capital raised that
were retroactive to the start of the relevant fund’s investment period.
The increase in Real Assets management fees during the three months ended March 31, 2026, was primarily attributable
to (i) management fees earned on new capital raised over the past twelve months at Global Infrastructure Investors V and at
our infrastructure K-Series vehicles, net of certain revenue sharing arrangements, and (ii) a higher level of management fees
earned from Global Atlantic primarily due to the growth in assets from inflows. During the three months ended March 31,
2026, approximately $40.6 million of management fees were earned on new capital raised that is retroactive to the start of
the relevant fund's investment period.
The increase in Credit and Liquid Strategies management fees during the three months ended March 31, 2026, was
primarily attributable to (i) an increase in capital invested at certain alternative credit strategy accounts, which resulted in an
increase in its fee base, and (ii) a higher level of management fees earned from CLOs from new issuances in both the United
States and Europe during the three months ended March 31, 2026.
Transaction and Monitoring Fees, Net
The following table presents transaction and monitoring fees, net by business line:
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Transaction and Monitoring Fees, Net | |||||
| Private Equity | $18,636 | $18,913 | $(277) | ||
| Real Assets | 7,667 | 9,855 | (2,188) | ||
| Credit and Liquid Strategies | 2,759 | 3,397 | (638) | ||
| Capital Markets | 223,647 | 229,344 | (5,697) | ||
| Total Transaction and Monitoring Fees, Net | $252,709 | $261,509 | $(8,800) |
Our Private Equity, Real Assets, and Credit and Liquid Strategies business lines earn transaction and monitoring fees from
portfolio companies, and under the terms of the management agreements with certain of our investment funds, we are
required to share all or a portion of such fees with our fund investors. For most of our investment funds, transaction and
monitoring fees are credited against fund management fees up to 100% of the amount of the transaction and monitoring fees
attributable to that investment fund, which results in a decrease of our monitoring and transaction fees. Our Capital Markets
business line earns transaction fees, which are generally not shared with fund investors.
The decrease in transaction and monitoring fees, net is primarily due to a lower level of transaction fees earned in our
Capital Markets business line. The decrease in capital markets transaction fees was primarily due to a decrease in the number
of capital markets transactions for the three months ended March 31, 2026. Overall, we completed 91 capital markets
transactions for the three months ended March 31, 2026, of which 7 represented equity offerings and 84 represented debt
offerings, as compared to 111 transactions for the three months ended March 31, 2025, of which 12 represented equity
offerings and 99 represented debt offerings. We earn fees in connection with underwriting, syndication, and other capital
markets services. While each of the capital markets transactions that we undertake in this business line is separately
negotiated, our fee rates are generally higher with respect to underwriting or syndicating equity offerings than with respect to
debt offerings, and the amount of fees that we earn for similar transactions generally correlates with overall transaction sizes.
Our capital markets fees are generated in connection with activity involving our Private Equity, Real Assets, and Credit
and Liquid Strategies business lines as well as from third-party companies. For the three months ended March 31, 2026,
approximately 14% of our transaction fees in our Capital Markets business line were earned from unaffiliated third parties as
compared to approximately 19% for the three months ended March 31, 2025. Our transaction fees are comprised of fees
earned from North America, Europe, and the Asia-Pacific region. For the three months ended March 31, 2026, approximately
48% of our transaction fees were generated outside of North America as compared to approximately 46% for the three
months ended March 31, 2025. Our Capital Markets business line is dependent on the overall capital markets environment,
which is influenced by, among other things, equity prices, credit spreads, and volatility. Our Capital Markets business line does
not generate monitoring fees.
Fee Related Performance Revenues
The following table presents fee related performance revenues by business line:
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Fee Related Performance Revenues | |||||
| Private Equity | $846 | $— | $846 | ||
| Real Assets | 4,980 | 1,765 | 3,215 | ||
| Credit and Liquid Strategies | 17,936 | 19,512 | (1,576) | ||
| Total Fee Related Performance Revenues | $23,762 | $21,277 | $2,485 |
Fee related performance revenues represent performance fees that are (i) expected to be received from our investment
funds, investment vehicles and accounts on a more recurring basis and (ii) not dependent on a realization event involving
investments held by the investment fund, vehicle or account.
The increase in fee related performance revenues for the three months ended March 31, 2026 compared to the prior
period was primarily due to performance revenues being earned from our Diversified Core Infrastructure Fund in our Real
Assets business line in the current period.
Fee Related Compensation
The increase in fee related compensation for the three months ended March 31, 2026 compared to the prior period was
primarily due to a higher level of compensation recorded in connection with the higher level of fee related revenues.
Other Operating Expenses
The increase in other operating expenses for the three months ended March 31, 2026 compared to the prior period was
primarily due to a higher level of occupancy, information technology, and general and administrative costs.
Fee Related Earnings
The increase in fee related earnings for the three months ended March 31, 2026 compared to the prior period was
primarily due to (i) a higher level of management fees across our Private Equity, Real Assets, and Credit and Liquid Strategies
business lines and (ii) a higher level of fee related performance revenues primarily earned in our Real Assets business line,
partially offset by (i) a higher level of fee related compensation and other operating expenses and (ii) a lower level of
transaction fees earned in our Capital Markets business line, as described above.
Realized Performance Income
The following table presents realized performance income by business line:
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Realized Performance Income | |||||
| Private Equity | $693,643 | $334,060 | $359,583 | ||
| Real Assets | 45,173 | 9,367 | 35,806 | ||
| Credit and Liquid Strategies | 17,148 | 4,493 | 12,655 | ||
| Total Realized Performance Income | $755,964 | $347,920 | $408,044 |
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Private Equity | |||||
| Americas Fund XII | $241,140 | $— | $241,140 | ||
| Asian Fund III | 133,327 | — | 133,327 | ||
| Core Investment Vehicles | 130,169 | 187,886 | (57,717) | ||
| North America Fund XI | 89,421 | — | 89,421 | ||
| European Fund V | — | 89,459 | (89,459) | ||
| Global Impact Fund | — | 13,215 | (13,215) | ||
| Other | 99,586 | 43,500 | 56,086 | ||
| Total Realized Performance Income | $693,643 | $334,060 | $359,583 |
Realized performance income in our Private Equity business line for the three months ended March 31, 2026 consisted
primarily of (i) realized proceeds from the sale of our investments in Novaria Group (industrial sector) and BrightSpring Health
Services (NASDAQ: BTSG) held by Americas Fund XII, J.B. Chemicals and Pharmaceuticals Limited (healthcare sector) held by
Asian Fund III, and Crosby Group (manufacturing sector) held by North America Fund XI and (ii) performance income from our
core private equity vehicles.
Realized performance income in our Private Equity business line for the three months ended March 31, 2025 consisted
primarily of (i) performance income from our core investment vehicles, (ii) realized proceeds from the sale of our investment
in Citation Topco Limited (services sector) held by both European Fund V and Global Impact Fund, and (iii) incentive fees from
certain levered multi-asset investment vehicles.
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Real Assets | |||||
| Crescent Energy Company | $22,387 | $— | $22,387 | ||
| Real Estate Co-Investment Fund | 20,095 | — | 20,095 | ||
| Global Infrastructure Investors II | — | 8,744 | (8,744) | ||
| Other | 2,691 | 623 | 2,068 | ||
| Total Realized Performance Income | $45,173 | $9,367 | $35,806 |
Realized performance income in our Real Assets business line for the three months ended March 31, 2026 consisted
primarily of realized proceeds from the sale of our investment in Benchmark Senior Living (real estate sector) and
performance fees earned from Crescent Energy Company (NYSE: CRGY) (“Crescent Energy”).
Realized performance income in our Real Assets business line for the three months ended March 31, 2025 consisted
primarily of realized proceeds from the sale of our investment in Q-Park N.V. (infrastructure: transportation sector) held by
Global Infrastructure Investors II.
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Credit and Liquid Strategies | |||||
| Lending Partners III | $2,236 | $— | $2,236 | ||
| Alternative Credit Vehicles | — | 1,159 | (1,159) | ||
| Other | 14,912 | 3,334 | 11,578 | ||
| Total Realized Performance Income | $17,148 | $4,493 | $12,655 |
Realized performance income in our Credit and Liquid Strategies business line for the three months ended March 31,
2026 consisted primarily of (i) performance fees earned from Marshall Wace and (ii) realized proceeds at Lending Partners III.
Realized performance income in our Credit and Liquid Strategies business line for the three months ended March 31,
2025 consisted primarily of performance fees earned from Marshall Wace and our sub-advisory agreement with a UK
investment fund manager.
Realized Performance Income Compensation
The increase in realized performance income compensation for the three months ended March 31, 2026 compared to the
prior period was primarily due to a higher level of compensation recorded in connection with the higher level of realized
performance income.
Realized Investment Income
The following table presents realized investment income from our Principal Activities business line:
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Total Realized Investment Income | $121,901 | $217,957 | $(96,056) |
The decrease in realized investment income is primarily due to a lower level of interest income, dividends, and net
realized gains. The amount of realized investment income depends on the transaction activity of our funds and Asset
Management segment balance sheet, which can vary from period to period.
For the three months ended March 31, 2026, realized investment income was primarily comprised of realized gains
primarily from the sale of our investments in J.B. Chemicals and Pharmaceuticals Limited, BrightSpring Health Services, and
Crosby Group. Partially offsetting the realized gains were realized losses, the most significant of which were realized losses
from the sale of various revolving credit facilities by the Capital Markets business line.
For the three months ended March 31, 2025, realized investment income was primarily comprised of (i) realized gains
from the sale of our investments in BridgeBio Inc. (NASDAQ: BBIO), and Citation Topco Limited, (ii) realized gains from the
settlement of foreign exchange forward contracts, and (iii) interest income primarily from our investments in CLOs. Partially
offsetting these realized gains were realized losses, the most significant of which were (i) a realized loss related to a
structured multi-asset investment vehicle and (ii) realized losses from the sale of various revolving credit facilities.
Realized investment income includes the net income (loss) from KKR Capstone. For the three months ended March 31,
2026, total fees attributable to KKR Capstone were $26.8 million and total expenses attributable to KKR Capstone were $26.4
million. For KKR Capstone-related adjustments in reconciling segment revenues and expenses to GAAP revenues and expenses
see Note 21 “Segment Reporting” in the accompanying financial statements.
As of the date of this filing, we have transactions that are pending or that have closed after March 31, 2026 that are
expected to result in realized performance income and realized investment income of at least $1.2 billion, which is expected
to be realized in the remainder of 2026. The realizations are expected to consist of approximately 80% realized performance
income and approximately 20% realized investment income. See “—Liquidity—Sources of Liquidity” for additional
information. Some of these transactions are not complete, and are subject to the satisfaction of closing conditions, including
regulatory approvals; therefore, there can be no assurance if or when such transactions will be completed. In addition, we
may realize gains or losses based on transactions or other events that occur after the date of filing this report, which could
impact, positively or negatively, the total amount of our realized performance income and realized investment income.
Therefore, no assurance can be given for what our actual realized performance income and realized investment income in the
remainder of 2026 or future periods will be.
Realized Investment Income Compensation
The decrease in realized investment income compensation for the three months ended March 31, 2026 compared to the
prior period is primarily due to a lower level of compensation recorded in connection with the lower level of realized
investment income.
Operating and Capital Metrics
See also “Fund Performance Metrics” for more information about our investment funds, vehicles and accounts across our
Private Equity, Real Assets and Credit and Liquid Strategies business lines, including investment performance, capital
commitments, uncalled capital commitments, and invested capital of each. See also "Risk Factors" and "—Business
Environment" in this report for more information about the factors that may impact our business, financial performance,
operating results and valuations.
The following tables present our key asset management segment operating and capital metrics:
| As of | |||||
| ($ in millions) | March 31, 2026 | December 31, 2025 | Change | ||
| Assets Under Management | $757,877 | $743,858 | $14,019 | ||
| Fee Paying Assets Under Management | $614,845 | $604,144 | $10,701 | ||
| Uncalled Commitments | $124,857 | $118,433 | $6,424 |
| As of | |||||
| ($ in millions) | March 31, 2026 | March 31, 2025 | Change | ||
| Capital Invested | $21,772 | $18,974 | $2,798 |
Assets Under Management
Private Equity
The following table reflects the changes in the AUM of our Private Equity business line from December 31, 2025 to March
31, 2026:
| ($ in millions) | |
| December 31, 2025 | $229,374 |
| New Capital Raised | 4,697 |
| Distributions and Other | (6,517) |
| Redemptions | (74) |
| Change in Value | 3,567 |
| March 31, 2026 | $231,047 |
AUM of our Private Equity business line was $231.0 billion at March 31, 2026, an increase of $1.6 billion, compared to
$229.4 billion at December 31, 2025.
The increase was primarily attributable to (i) new capital raised from North America Fund XIV and our private equity K-
Series vehicles, and (ii) appreciation in investment value primarily from Global Impact Fund II, Asian Fund IV and our private
equity K-Series vehicles. Partially offsetting the increases were distributions to fund investors primarily as a result of realized
proceeds, most notably from Americas Fund XII, North America Fund XI, and Asian Fund III.
For the three months ended March 31, 2026, the value of our traditional private equity investment portfolio appreciated
by 1%. This was comprised of a 6% increase in share prices of publicly held investments and no change in value of our
privately held investments. For the three months ended March 31, 2026, the value of our growth equity investment portfolio
(including our global impact strategy) increased 16%, and the value of our core private equity investment portfolio decreased
3%.
Real Assets
The following table reflects the changes in the AUM of our Real Assets business line from December 31, 2025 to March
31, 2026:
| ($ in millions) | |
| December 31, 2025 | $192,480 |
| New Capital Raised | 7,805 |
| Distributions and Other | (2,962) |
| Redemptions | (142) |
| Change in Value | 747 |
| March 31, 2026 | $197,928 |
AUM of our Real Assets business line was $197.9 billion at March 31, 2026, an increase of $5.4 billion, compared to
$192.5 billion at December 31, 2025.
The increase was primarily attributable to (i) new capital raised in our infrastructure K-Series vehicles, Global
Infrastructure Investors V, and Diversified Core Infrastructure Fund and, to a lesser extent, (ii) appreciation in investment
value from Global Infrastructure Investors III and Energy and Growth Income Fund II. Partially offsetting the increase were (i)
payments to Global Atlantic policyholders, and (ii) distributions to fund investors as a result of realized proceeds, most notably
from one of our infrastructure separately managed accounts with a public pension plan and Real Estate Partners Americas II.
For the three months ended March 31, 2026, the value of our infrastructure investment portfolio appreciated 2% and the
value of our opportunistic real estate equity investment portfolio depreciated by 1%.
Credit and Liquid Strategies
The following table reflects the changes in the AUM of our Credit and Liquid Strategies business line from December 31,
2025 to March 31, 2026:
| ($ in millions) | |
| December 31, 2025 | $322,004 |
| New Capital Raised | 15,248 |
| Distributions and Other | (7,286) |
| Redemptions | (2,855) |
| Change in Value | 1,791 |
| March 31, 2026 | $328,902 |
AUM of our Credit and Liquid Strategies business line totaled $328.9 billion at March 31, 2026, an increase of $6.9 billion
compared to AUM of $322.0 billion at December 31, 2025.
The increase was primarily attributable to (i) new capital raised from Global Atlantic inflows and various alternative credit
and leveraged credit investment funds, (ii) the issuance of CLOs, and, to a lesser extent, (iii) investment value appreciation on
assets managed by Marshall Wace. Partially offsetting the increase were (i) payments to Global Atlantic policyholders, (ii)
distributions to, and redemptions from, fund investors at certain alternative and leveraged credit funds, and (iii) redemptions
at Marshall Wace.
Fee Paying Assets Under Management
Private Equity
The following table reflects the changes in the FPAUM of our Private Equity business line from December 31, 2025 to
March 31, 2026:
| ($ in millions) | |
| December 31, 2025 | $151,239 |
| New Capital Raised | 5,561 |
| Distributions and Other | (2,848) |
| Redemptions | (74) |
| Net Changes in Fee Base of Certain Funds | (438) |
| Change in Value | 252 |
| March 31, 2026 | $153,692 |
FPAUM of our Private Equity business line was $153.7 billion at March 31, 2026, an increase of $2.5 billion, compared to
$151.2 billion at December 31, 2025.
The increase was primarily attributable to new capital raised from North America Fund XIV and our private equity K-Series
vehicles. Partially offsetting the increase were distributions to fund investors primarily as a result of (i) realized proceeds,
most notably from Asian Fund III, (ii) fees waived at European Fund IV in exchange for extending the term of the fund and (iii)
a change in fee base for Next Generation Technology Growth Fund III as a result of the fund entering its post-investment
period in the first quarter of 2026, during which we earn fees on invested capital rather than committed capital.
Uncalled capital commitments from private equity funds and other investment vehicles from which KKR is currently not
earning management fees amounted to approximately $17.7 billion at March 31, 2026, which includes capital commitments
reserved for follow-on investments for funds that have completed their investment periods. This capital will generally begin to
earn management fees upon deployment of the capital or upon the commencement of the fund's investment period. The
average annual management fee rate associated with this capital is approximately 0.97%. The date on which we begin to earn
fees (as specified above) is not guaranteed to occur and may not occur for an extended period of time. If and when such
management fees are earned, a portion of existing FPAUM may cease paying fees or pay lower fees, thus offsetting a portion
of any new management fees earned.
Real Assets
The following table reflects the changes in the FPAUM of our Real Assets business line from December 31, 2025 to March
31, 2026:
| ($ in millions) | |
| December 31, 2025 | $163,451 |
| New Capital Raised | 7,959 |
| Distributions and Other | (2,136) |
| Redemptions | (142) |
| Change in Value | (311) |
| March 31, 2026 | $168,821 |
FPAUM of our Real Assets business line was $168.8 billion at March 31, 2026, an increase of $5.3 billion, compared to
$163.5 billion at December 31, 2025.
The increase was primarily attributable to new capital raised from our infrastructure K-Series vehicles, Global
Infrastructure Investors V, and Global Atlantic inflows invested in infrastructure. Partially offsetting the increase were (i)
payments to Global Atlantic policyholders, and (ii) distributions to fund investors as a result of realized proceeds, most notably
from one of our infrastructure separately managed accounts with a public pension plan and Diversified Core Infrastructure
Fund.
Uncalled capital commitments from real assets investment funds and other investment vehicles from which KKR is
currently not earning management fees amounted to approximately $15.0 billion at March 31, 2026, which includes capital
commitments reserved for follow-on investments for funds that have completed their investment periods. This capital will
generally begin to earn management fees upon deployment of the capital or upon the commencement of the fund's
investment period. The average annual management fee rate associated with this capital is approximately 1.21%. The date on
which we begin to earn fees (as specified above) is not guaranteed to occur and may not occur for an extended period of
time. If and when such management fees are earned, a portion of existing FPAUM may cease paying fees or pay lower fees,
thus offsetting a portion of any new management fees earned.
Credit and Liquid Strategies
The following table reflects the changes in the FPAUM of our Credit and Liquid Strategies business line from December
31, 2025 to March 31, 2026:
| ($ in millions) | |
| December 31, 2025 | $289,454 |
| New Capital Raised | 12,518 |
| Distributions and Other | (8,438) |
| Redemptions | (2,855) |
| Change in Value | 1,653 |
| March 31, 2026 | $292,332 |
FPAUM of our Credit and Liquid Strategies business line was $292.3 billion at March 31, 2026, an increase of $2.8 billion,
compared to $289.5 billion at December 31, 2025.
The increase was primarily attributable to (i) new capital raised from Global Atlantic inflows and deployment at various
alternative credit and leveraged credit investment funds, (ii) the issuance of CLOs, and, to a lesser extent, (iii) investment
value appreciation on assets managed by Marshall Wace. Partially offsetting the increase were (i) payments to Global Atlantic
policyholders, (ii) distributions to, and redemptions from, fund investors at certain alternative and leveraged credit funds, and
(iii) redemptions at Marshall Wace.
Uncalled capital commitments from credit investment funds from which KKR is currently not earning management fees
amounted to approximately $31.3 billion at March 31, 2026, which includes capital commitments reserved for follow-on
investments for funds that have completed their investment periods. This capital will generally begin to earn management
fees upon deployment of the capital or upon the commencement of the fund's investment period. The average annual
management fee rate associated with this capital is approximately 0.53%. The date on which we begin to earn fees is not
guaranteed to occur and may not occur for an extended period of time. If and when such management fees are earned, a
portion of existing FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any new management fees
earned.
See "Risk Factors" in our Annual Report and "—Business Environment" for more information about the factors that may
impact our business, financial performance, operating results and valuations.
Uncalled Commitments
Private Equity
As of March 31, 2026, our Private Equity business line had $53.3 billion of remaining uncalled commitments that could be
called for investments in new transactions as compared to $52.3 billion as of December 31, 2025. The increase was primarily
attributable to new capital commitments from fund investors largely offset by capital called from fund investors to make
investments during the period.
Real Assets
As of March 31, 2026, our Real Assets business line had $37.4 billion of remaining uncalled commitments that could be
called for investments in new transactions as compared to $35.0 billion as of December 31, 2025. The increase was primarily
attributable to new capital commitments from fund investors, which was partially offset by capital called from fund investors
to make investments during the period.
Credit and Liquid Strategies
As of March 31, 2026, our Credit and Liquid Strategies business line had $34.1 billion of remaining uncalled commitments
that could be called for investments in new transactions as compared to $31.1 billion as of December 31, 2025. The increase
was primarily attributable to new capital commitments from fund investors, which was partially offset by capital called from
fund investors to make investments during the period.
Capital Invested
Private Equity
For the three months ended March 31, 2026, $2.2 billion of capital was invested by our Private Equity business line, as
compared to $4.3 billion for the three months ended March 31, 2025. The decrease was driven primarily by a $1.3 billion
decrease in capital invested in our core private equity strategy and $0.6 billion decrease in capital invested in our traditional
private equity strategy. During the three months ended March 31, 2026, 27% of capital deployed in private equity was in
transactions in North America, 27% was in Europe, and 46% was in the Asia-Pacific region. The number of large private equity
investments made in any quarterly or year-to-date period is volatile and, consequently, a significant amount of capital
invested in one period or a few periods may not be indicative of a similar level of capital deployment in future periods.
Real Assets
For the three months ended March 31, 2026, $8.3 billion of capital was invested by our Real Assets business line, as
compared to $5.6 billion for the three months ended March 31, 2025. The increase was driven primarily by a $2.7 billion
increase in capital invested in our infrastructure strategy and $0.7 billion increase in capital invested in our real estate
strategy, partially offset by a $0.6 billion decrease in capital invested in our energy strategy. During the three months ended
March 31, 2026, 57% of capital deployed in real assets was in transactions in North America, 25% was in Europe, and 18% was
in the Asia-Pacific region. The number of large real assets investments made in any quarterly or year-to-date period is volatile
and, consequently, a significant amount of capital invested in one period or a few periods may not be indicative of a similar
level of capital deployment in future periods.
Credit and Liquid Strategies
For the three months ended March 31, 2026, $11.2 billion of capital was invested by our Credit and Liquid Strategies
business line, as compared to $9.1 billion for the three months ended March 31, 2025. The increase was driven primarily by a
higher level of capital deployed across our alternative credit strategies, most notably asset-based finance. During the three
months ended March 31, 2026, 88% of capital deployed was in transactions in North America, 10% was in Europe, and 2% was
in the Asia-Pacific region.
Analysis of Insurance Segment Operating Results
The following table sets forth information regarding KKR's insurance segment operating results for the three months
ended March 31, 2026 and 2025. Effective beginning in the first quarter of 2026, the information regularly provided to
management for the Insurance Segment was modified to reclassify certain operating expenses from “General, Administrative
and Other” to “Net Cost of Insurance.” Prior period segment information has been recast to conform to the current period
presentation. This reclassification had no impact on Insurance Operating Earnings.
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Net Investment Income | $1,900,612 | $1,729,343 | $171,269 | ||
| Net Cost of Insurance | (1,453,334) | (1,287,983) | (165,351) | ||
| General, Administrative and Other | (186,948) | (182,588) | (4,360) | ||
| Insurance Operating Earnings | $260,330 | $258,772 | $1,558 |
Net Investment Income
Net investment income increased for the three months ended March 31, 2026, as compared to the three months ended
March 31, 2025, primarily due to (i) increased average assets under management from the cumulative impact of new business
volume growth over the preceding twelve months, and (ii) higher average portfolio yields due to repositioning the portfolio
into higher yielding fixed maturity debt securities, and investment in alternative asset classes, such as real assets.
Net Cost of Insurance
Net cost of insurance increased for the three months ended March 31, 2026, as compared to the three months ended
March 31, 2025, primarily due to (i) growth in reserves in the institutional and individual market channels as a result of the
cumulative impact of new business volumes in the preceding twelve months, and (ii) higher average funding costs due to
higher crediting rates and the routine run-off of older business originated in a lower interest rate environment.
General, Administrative and Other Expenses
General, administrative and other expenses increased for the three months ended March 31, 2026, as compared to the
three months ended March 31, 2025, primarily due to (i) higher interest expense primarily reflecting higher levels of
borrowing, and (ii) an increase in professional and technology-related expenses.
Insurance Operating Earnings
Insurance operating earnings increased for the three months ended March 31, 2026, as compared to the three months
ended March 31, 2025, primarily due to an increase in net investment income due to an increase in average assets under
management and higher portfolio yields, partially offset by an increase in net cost of insurance due to the cumulative impact
of new business volume growth and higher crediting rates.
Analysis of Strategic Holdings Segment Operating Results
The following table sets forth information regarding KKR's strategic holdings segment operating results for the three
months ended March 31, 2026 and 2025:
| Three Months Ended | ||||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | |||
| Dividends, Net | $48,296 | $31,486 | $16,810 | |||
| Strategic Holdings Operating Earnings | 48,296 | 31,486 | 16,810 | |||
| Net Realized Investment Income | — | — | — | |||
| Strategic Holdings Segment Earnings | $48,296 | $31,486 | $16,810 |
Dividends, Net
For the three months ended March 31, 2026, dividends, net were comprised of dividend income from USI Insurance
Services LLC and Viridor Limited (energy and energy transition sector). For the three months ended March 31, 2025,
dividends, net were comprised of dividend income from Atlantic Aviation FBO Inc. and ERM Worldwide Group Limited
(services sector). For the three months ended March 31, 2026, the contractual management fee charged by our Asset
Management segment was $10.9 million and for the three months ended March 31, 2025, the management fee was $7.9
million.
Net Realized Investment Income
For the three months ended March 31, 2026 and March 31, 2025 there was no net realized investment income earned in
our Strategic Holdings segment.
Strategic Holdings Segment Earnings
Strategic Holdings segment earnings for the three months ended March 31, 2026, was higher compared to the prior
period due to a higher level of dividends.
Analysis of Non-GAAP Performance Measures
The following is a discussion of our Non-GAAP performance measures for the three months ended March 31, 2026 and
| Three Months Ended | |||||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | Change | ||
| Fee Related Earnings | $1,016,375 | $822,603 | $193,772 | ||
| Insurance Operating Earnings | 260,330 | 258,772 | 1,558 | ||
| Strategic Holdings Operating Earnings | 48,296 | 31,486 | 16,810 | ||
| Total Operating Earnings | 1,325,001 | 1,112,861 | 212,140 | ||
| Net Realized Performance Income | 197,191 | 87,989 | 109,202 | ||
| Net Realized Investment Income | 103,616 | 185,263 | (81,647) | ||
| Total Investing Earnings | 300,807 | 273,252 | 27,555 | ||
| Total Segment Earnings | 1,625,808 | 1,386,113 | 239,695 | ||
| Interest Expense, Net and Other | (128,304) | (91,470) | (36,834) | ||
| Income Taxes on Adjusted Earnings | (247,965) | (260,655) | 12,690 | ||
| Adjusted Net Income | $1,249,539 | $1,033,988 | $215,551 |
Total Operating Earnings
The increase in total operating earnings for the three months ended March 31, 2026 compared to the prior period was
primarily due to a higher level of fee related earnings and to a lesser extent insurance operating earnings and strategic
holdings operating earnings. For a discussion of fee related earnings, insurance operating earnings, and strategic holdings
operating earnings, see "—Analysis of Asset Management Segment Operating Results", "—Analysis of Insurance Segment
Operating Results", and "—Analysis of Strategic Holdings Segment Operating Results."
Total Investing Earnings
The increase in total investing earnings for the three months ended March 31, 2026 compared to the prior period was
primarily due to a higher level of net realized performance income, offset by a lower level of net realized investment income.
For a discussion of net realized performance income and net realized investment income, see "—Analysis of Asset
Management Segment Operating Results" and "—Analysis of Strategic Holdings Segment Operating Results."
Total Segment Earnings
The increase in total segment earnings for the three months ended March 31, 2026 compared to the prior period was
primarily due to an increase in total operating earnings and to a lesser extent total investing earnings.
Adjusted Net Income
The increase in adjusted net income for the three months ended March 31, 2026 compared to the prior period was
primarily due to a higher level of total segment earnings, partially offset by an increase in interest expense, net and other.
Interest Expense, Net and Other
The increase in interest expense, net and other for the three months ended March 31, 2026 compared to the prior period
was primarily due to dividends paid on the Series D Mandatory Convertible Preferred Stock that was issued in March 2025.
Income Taxes on Adjusted Earnings
The decrease in income taxes on adjusted earnings for the three months ended March 31, 2026 compared to the prior
period was primarily due to a higher level of certain income tax deductions and credits.
For the three months ended March 31, 2026 and 2025, the amount of the tax benefit from equity-based compensation
included in income taxes on adjusted earnings was $21.4 million and $30.8 million, respectively. The inclusion of the tax
benefit from equity-based compensation in Adjusted Net Income had the effect of increasing this measure by 2% and 3% for
the three months ended March 31, 2026 and 2025, respectively.
Fund Performance Metrics
Private Equity
The table below presents information as of March 31, 2026, relating to our current private equity and other investment
vehicles reported in our Private Equity business line for which we have the ability to earn carried interest. This data does not
reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after March 31, 2026.
| Investment Period | Amount ($ in millions) | |||||||||
| Start Date(1) | End Date (2) | Commitment (3) | Uncalled Commitments | Invested | Realized | Remaining Cost (4) | Remaining Fair Value | Gross Accrued Carried Interest | ||
| Private Equity Business Line | ||||||||||
| North America Fund XIV | 4/2025 | 4/2031 | $21,893 | $21,893 | $— | $— | $— | $— | $— | |
| North America Fund XIII | 8/2021 | 4/2025 | 18,400 | 1,432 | 17,271 | 566 | 16,786 | 23,446 | 1,062 | |
| Americas Fund XII | 5/2017 | 5/2021 | 13,500 | 1,386 | 12,754 | 18,506 | 7,873 | 16,320 | 1,442 | |
| North America Fund XI | 11/2012 | 1/2017 | 8,718 | 48 | 10,203 | 25,152 | 1,172 | 1,707 | 190 | |
| 2006 Fund (5) | 9/2006 | 9/2012 | 17,642 | — | 17,309 | 37,423 | — | — | — | |
| Millennium Fund (5) | 12/2002 | 12/2008 | 6,000 | — | 6,000 | 14,129 | — | — | — | |
| Ascendant Fund | 6/2022 | 6/2028 | 4,328 | 2,194 | 2,134 | — | 2,134 | 2,511 | 32 | |
| European Fund VI | 6/2022 | 6/2028 | 7,521 | 2,537 | 4,984 | — | 3,888 | 5,749 | — | |
| European Fund V | 7/2019 | 2/2022 | 6,379 | 505 | 5,997 | 2,909 | 4,552 | 6,640 | 390 | |
| European Fund IV | 2/2015 | 3/2019 | 3,512 | 16 | 3,648 | 5,726 | 1,621 | 2,187 | 96 | |
| European Fund III (5) | 3/2008 | 3/2014 | 5,506 | — | 5,360 | 10,647 | — | — | — | |
| European Fund II (5) | 11/2005 | 10/2008 | 5,751 | — | 5,751 | 8,533 | — | — | — | |
| Asian Fund IV | 7/2020 | 7/2026 | 14,735 | 3,857 | 12,061 | 4,229 | 11,108 | 16,204 | 954 | |
| Asian Fund III | 8/2017 | 7/2020 | 9,000 | 1,267 | 8,274 | 11,601 | 4,628 | 8,680 | 884 | |
| Asian Fund II | 10/2013 | 3/2017 | 5,825 | — | 7,507 | 6,723 | 1,270 | 744 | — | |
| Asian Fund (5) | 7/2007 | 4/2013 | 3,983 | — | 3,974 | 8,728 | — | — | — | |
| Next Generation Technology Growth Fund III | 11/2022 | 3/2026 | 2,740 | 734 | 2,006 | — | 2,006 | 2,302 | — | |
| Next Generation Technology Growth Fund II | 12/2019 | 5/2022 | 2,088 | 53 | 2,270 | 1,846 | 1,610 | 2,390 | 137 | |
| Next Generation Technology Growth Fund | 3/2016 | 12/2019 | 659 | 2 | 671 | 1,314 | 241 | 871 | 66 | |
| Health Care Strategic Growth Fund II | 5/2021 | 5/2027 | 3,789 | 1,421 | 2,368 | 103 | 2,245 | 3,556 | 177 | |
| Health Care Strategic Growth Fund | 12/2016 | 4/2021 | 1,331 | 86 | 1,409 | 1,085 | 987 | 1,674 | 130 | |
| Global Impact Fund II | 6/2022 | 6/2028 | 2,711 | 1,374 | 1,337 | — | 986 | 3,237 | 340 | |
| Global Impact Fund | 2/2019 | 3/2022 | 1,242 | 187 | 1,238 | 646 | 975 | 1,450 | 92 | |
| Co-Investment Vehicles and Other | Various | Various | 43,072 | 3,430 | 40,360 | 18,205 | 30,328 | 37,711 | 1,844 | |
| Core Investors II | 8/2022 | 8/2027 | 11,814 | 7,957 | 3,858 | 122 | 3,858 | 4,495 | (22) | |
| Core Investors I | 2/2018 | 8/2022 | 8,500 | 23 | 10,501 | 2,683 | 8,767 | 17,525 | (21) | |
| Other Core Vehicles | Various | Various | 7,625 | 1,175 | 6,526 | 2,313 | 5,787 | 9,356 | 11 | |
| Unallocated Commitments (6) | N/A | N/A | 1,684 | 1,684 | — | — | — | — | — | |
| Total Private Equity | $239,948 | $53,261 | $195,771 | $183,189 | $112,822 | $168,755 | $7,804 |
(1)The start date represents the start of the fund's investment period as defined in the fund's governing documents and may or may not be the same as the
date upon which management fees begin to accrue.
(2)The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which
management fees cease to accrue. For funds that initially charge management fees on the basis of committed capital, the end date is generally the date
on or after which the management fees begin to be calculated instead on the basis of invested capital and may, for certain funds, begin to be calculated
using a lower rate.
(3)The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general
partner. Foreign currency commitments have been converted into U.S. dollars based on the exchange rate that prevailed on March 31, 2026.
(4)The remaining cost represents the initial investment of the general partner and limited partners, reduced for returns of capital.
(5)The "Invested" and "Realized" columns do not include the amounts of any realized investments that restored the unused capital commitments of the fund
investors, if any.
(6)"Unallocated Commitments" represent commitments received from our strategic investor partnerships that have yet to be allocated to a particular
investment strategy.
Real Assets
The table below presents information as of March 31, 2026, relating to our current real asset and other investment
vehicles reported in our Real Assets business line for which we have the ability to earn carried interest. This data does not
reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after March 31, 2026.
| Investment Period | Amount ($ in millions) | |||||||||
| Start Date (1) | End Date (2) | Commitment (3) | Uncalled Commitments | Invested | Realized | Remaining Cost (4) | Remaining Fair Value | Gross Accrued Carried Interest | ||
| Real Assets Business Line | ||||||||||
| Global Infrastructure Investors V | 7/2024 | 7/2030 | $17,295 | $13,613 | $3,795 | $113 | $3,795 | $4,033 | $14 | |
| Global Infrastructure Investors IV | 8/2021 | 6/2024 | 16,609 | 1,731 | 15,249 | 1,703 | 14,554 | 19,620 | 1,030 | |
| Global Infrastructure Investors III | 7/2018 | 6/2021 | 7,174 | 467 | 7,073 | 5,828 | 3,718 | 5,153 | 215 | |
| Global Infrastructure Investors II | 12/2014 | 6/2018 | 3,040 | 133 | 3,167 | 5,764 | 560 | 961 | 48 | |
| Global Infrastructure Investors | 9/2010 | 10/2014 | 1,040 | — | 1,050 | 2,228 | — | — | — | |
| Asia Pacific Infrastructure Investors III | 12/2025 | 12/2031 | 4,473 | 4,473 | — | — | — | — | — | |
| Asia Pacific Infrastructure Investors II | 9/2022 | 9/2028 | 6,348 | 3,117 | 3,633 | 797 | 2,943 | 4,330 | 262 | |
| Asia Pacific Infrastructure Investors | 1/2020 | 9/2022 | 3,792 | 592 | 3,562 | 2,286 | 2,213 | 3,097 | 197 | |
| Diversified Core Infrastructure Fund | 12/2020 | (5) | 14,343 | 1,959 | 12,384 | 1,723 | 12,265 | 13,512 | — | |
| Global Climate Transition Fund(6) | 7/2024 | 7/2030 | 3,128 | 3,128 | — | — | — | — | — | |
| Real Estate Partners Americas IV | 11/2024 | 11/2028 | 2,272 | 2,272 | — | — | — | — | — | |
| Real Estate Partners Americas III | 1/2021 | 9/2024 | 4,253 | 523 | 3,979 | 379 | 3,713 | 4,246 | — | |
| Real Estate Partners Americas II | 5/2017 | 12/2020 | 1,921 | 116 | 1,988 | 3,094 | 137 | 57 | 1 | |
| Real Estate Partners Americas | 5/2013 | 5/2017 | 1,229 | 15 | 1,024 | 1,444 | — | — | (4) | |
| Real Estate Partners Europe II | 3/2020 | 12/2023 | 2,066 | 238 | 2,032 | 625 | 1,654 | 1,447 | — | |
| Real Estate Partners Europe | 8/2015 | 12/2019 | 710 | 99 | 694 | 806 | 173 | 81 | (18) | |
| Asia Real Estate Partners | 7/2019 | 7/2023 | 1,682 | 353 | 1,380 | 617 | 971 | 864 | — | |
| Property Partners Americas | 12/2019 | (5) | 2,571 | 46 | 2,525 | 179 | 2,525 | 2,304 | — | |
| Real Estate Credit Opportunity Partners II | 8/2019 | 6/2023 | 950 | — | 976 | 487 | 855 | 869 | 29 | |
| Real Estate Credit Opportunity Partners | 2/2017 | 4/2019 | 1,130 | 122 | 1,008 | 697 | 964 | 1,002 | 5 | |
| Energy Related Vehicles | Various | Various | 4,357 | 62 | 4,493 | 2,543 | 954 | 1,584 | 58 | |
| Co-Investment Vehicles & Other | Various | Various | 21,037 | 2,070 | 19,027 | 4,668 | 16,915 | 17,985 | 131 | |
| Unallocated Commitments(7) | N/A | N/A | 1,384 | 1,384 | — | — | — | — | — | |
| Total Real Assets | $122,804 | $36,513 | $89,039 | $35,981 | $68,909 | $81,145 | $1,968 |
(1)The start date represents the start of the fund's investment period as defined in the fund's governing documents and may or may not be the same as the
date upon which management fees begin to accrue.
(2)The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which
management fees cease to accrue. For funds that initially charge management fees on the basis of committed capital, the end date is generally the date
on or after which the management fees begin to be calculated instead on the basis of invested capital and may, for certain funds, begin to be calculated
using a lower rate.
(3)The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general
partner. Foreign currency commitments have been converted into U.S. dollars based on the exchange rate that prevailed on March 31, 2026.
(4)The remaining cost represents the initial investment of the general partner and limited partners, reduced for returns of capital.
(5)Open-ended fund.
(6)Includes an Asia-focused vehicle with different fund terms.
(7)"Unallocated Commitments" represent commitments received from our strategic investor partnerships that have yet to be allocated to a particular
investment strategy.
Private Equity and Real Asset Performance
The table below presents information as of March 31, 2026, relating to the historical performance of certain of our
Private Equity and Real Assets investment vehicles since inception, which we believe illustrates the benefits of our investment
approach. This data does not reflect additional capital raised since March 31, 2026, or acquisitions or disposals of
investments, changes in investment values, or distributions occurring after that date. The information presented below is not
intended to be representative of any past or future performance for any particular period other than the period presented
below. Past performance is no guarantee of future results.
| Private Equity and Real Assets Business Lines Investment Funds and Other Vehicles | Commitment (2) | Invested | Realized (4) | Unrealized | Total Value | Gross IRR (5) | Net IRR (5) | Gross Multiple of Invested Capital (5) | |||
| ($ in millions) | |||||||||||
| Total Investments | |||||||||||
| Legacy Funds (1) | |||||||||||
| 1976 Fund | $31 | $31 | $537 | $— | $537 | 39.5% | 35.5% | 17.1 | |||
| 1980 Fund | 357 | 357 | 1,828 | — | 1,828 | 29.0% | 25.8% | 5.1 | |||
| 1982 Fund | 328 | 328 | 1,291 | — | 1,291 | 48.1% | 39.2% | 3.9 | |||
| 1984 Fund | 1,000 | 1,000 | 5,964 | — | 5,964 | 34.5% | 28.9% | 6.0 | |||
| 1986 Fund | 672 | 672 | 9,081 | — | 9,081 | 34.4% | 28.9% | 13.5 | |||
| 1987 Fund | 6,130 | 6,130 | 14,949 | — | 14,949 | 12.1% | 8.9% | 2.4 | |||
| 1993 Fund | 1,946 | 1,946 | 4,143 | — | 4,143 | 23.6% | 16.8% | 2.1 | |||
| 1996 Fund | 6,012 | 6,012 | 12,477 | — | 12,477 | 18.0% | 13.3% | 2.1 | |||
| Subtotal - Legacy Funds | 16,475 | 16,475 | 50,269 | — | 50,269 | 26.1% | 19.9% | 3.1 | |||
| Included Funds | |||||||||||
| European Fund (1999) | 3,085 | 3,085 | 8,758 | — | 8,758 | 26.9% | 20.2% | 2.8 | |||
| Millennium Fund (2002) | 6,000 | 6,000 | 14,129 | — | 14,129 | 22.0% | 16.1% | 2.4 | |||
| European Fund II (2005) | 5,751 | 5,751 | 8,533 | — | 8,533 | 6.1% | 4.5% | 1.5 | |||
| 2006 Fund (2006) | 17,642 | 17,309 | 37,423 | — | 37,423 | 11.9% | 9.3% | 2.2 | |||
| Asian Fund (2007) | 3,983 | 3,974 | 8,728 | — | 8,728 | 18.9% | 13.7% | 2.2 | |||
| European Fund III (2008) | 5,506 | 5,360 | 10,647 | — | 10,647 | 16.4% | 11.2% | 2.0 | |||
| E2 Investors (Annex Fund) (2009) | 196 | 196 | 200 | — | 200 | 0.6% | 0.5% | 1.0 | |||
| China Growth Fund (2010) | 1,010 | 1,010 | 1,166 | — | 1,166 | 3.7% | —% | 1.2 | |||
| Natural Resources Fund (2010) | 887 | 887 | 168 | — | 168 | (24.3)% | (25.9)% | 0.2 | |||
| Global Infrastructure Investors (2010) | 1,040 | 1,050 | 2,228 | — | 2,228 | 17.6% | 15.6% | 2.1 | |||
| North America Fund XI (2012) | 8,718 | 10,203 | 25,152 | 1,707 | 26,859 | 23.4% | 18.8% | 2.6 | |||
| Asian Fund II (2013) | 5,825 | 7,507 | 6,723 | 744 | 7,467 | (0.2)% | (1.6)% | 1.0 | |||
| Real Estate Partners Americas (2013) | 1,229 | 1,024 | 1,444 | — | 1,444 | 15.8% | 10.9% | 1.4 | |||
| Energy Income and Growth Fund (2013) | 1,589 | 1,589 | 1,221 | — | 1,221 | (6.2)% | (8.6)% | 0.8 | |||
| Global Infrastructure Investors II (2014) | 3,040 | 3,167 | 5,764 | 961 | 6,725 | 19.2% | 16.6% | 2.1 | |||
| European Fund IV (2015) | 3,512 | 3,648 | 5,726 | 2,187 | 7,913 | 20.6% | 15.5% | 2.2 | |||
| Real Estate Partners Europe (2015) | 710 | 694 | 806 | 81 | 887 | 8.6% | 5.7% | 1.3 | |||
| Next Generation Technology Growth Fund (2016) | 659 | 671 | 1,314 | 871 | 2,185 | 27.7% | 23.5% | 3.3 | |||
| Health Care Strategic Growth Fund (2016) | 1,331 | 1,409 | 1,085 | 1,674 | 2,759 | 17.0% | 12.3% | 2.0 | |||
| Americas Fund XII (2017) | 13,500 | 12,754 | 18,506 | 16,320 | 34,826 | 23.4% | 19.5% | 2.7 | |||
| Real Estate Credit Opportunity Partners (2017) | 1,130 | 1,008 | 697 | 1,002 | 1,699 | 9.1% | 7.8% | 1.7 | |||
| Core Investors I (2018) | 8,500 | 10,501 | 2,683 | 17,525 | 20,208 | 14.0% | 12.4% | 1.9 | |||
| Asian Fund III (2017) | 9,000 | 8,274 | 11,601 | 8,680 | 20,281 | 23.7% | 18.5% | 2.5 | |||
| Real Estate Partners Americas II (2017) | 1,921 | 1,988 | 3,094 | 57 | 3,151 | 23.8% | 19.2% | 1.6 | |||
| Global Infrastructure Investors III (2018) | 7,174 | 7,073 | 5,828 | 5,153 | 10,981 | 12.4% | 9.7% | 1.6 | |||
| Global Impact Fund (2019) | 1,242 | 1,238 | 646 | 1,450 | 2,096 | 14.8% | 10.6% | 1.7 | |||
| European Fund V (2019) | 6,379 | 5,997 | 2,909 | 6,640 | 9,549 | 12.2% | 9.5% | 1.6 | |||
| Energy Income and Growth Fund II (2018) | 994 | 1,199 | 689 | 1,419 | 2,108 | 14.0% | 12.4% | 1.8 | |||
| Asia Real Estate Partners (2019) | 1,682 | 1,380 | 617 | 864 | 1,481 | 2.4% | (0.5)% | 1.1 | |||
| Next Generation Technology Growth Fund II (2019) | 2,088 | 2,270 | 1,846 | 2,390 | 4,236 | 18.2% | 14.3% | 1.9 | |||
| Real Estate Credit Opportunity Partners II (2019) | 950 | 976 | 487 | 869 | 1,356 | 9.9% | 7.7% | 1.4 | |||
| Asia Pacific Infrastructure Investors (2020) | 3,792 | 3,562 | 2,286 | 3,097 | 5,383 | 15.4% | 11.5% | 1.5 | |||
| Asian Fund IV (2020) | 14,735 | 12,061 | 4,229 | 16,204 | 20,433 | 23.3% | 17.5% | 1.7 | |||
| Real Estate Partners Europe II (2020) | 2,066 | 2,032 | 625 | 1,447 | 2,072 | 0.7% | (1.5)% | 1.0 | |||
| Real Estate Partners Americas III (2021) | 4,253 | 3,979 | 379 | 4,246 | 4,625 | 5.2% | 3.4% | 1.2 | |||
| Health Care Strategic Growth Fund II (2021) | 3,789 | 2,368 | 103 | 3,556 | 3,659 | 24.4% | 15.7% | 1.5 | |||
| North America Fund XIII (2021) | 18,400 | 17,271 | 566 | 23,446 | 24,012 | 15.0% | 11.3% | 1.4 | |||
| Global Infrastructure Investors IV (2021) | 16,609 | 15,249 | 1,703 | 19,620 | 21,323 | 13.8% | 10.6% | 1.4 | |||
| Core Investors II (2022) | 11,814 | 3,858 | 122 | 4,495 | 4,617 | 8.3% | 7.4% | 1.2 | |||
| Asia Pacific Infrastructure Investors II (2022) | 6,348 | 3,633 | 797 | 4,330 | 5,127 | 28.4% | 20.7% | 1.4 | |||
| Ascendant Fund (2022) | 4,328 | 2,134 | — | 2,511 | 2,511 | 18.5% | 8.5% | 1.2 | |||
| Next Generation Technology Growth Fund III (2022) | 2,740 | 2,006 | — | 2,302 | 2,302 | 11.3% | 4.8% | 1.1 | |||
| European Fund VI (2022) | 7,521 | 4,984 | — | 5,749 | 5,749 | 9.3% | 5.7% | 1.2 | |||
| Global Impact Fund II (2022) | 2,711 | 1,337 | — | 3,237 | 3,237 | 63.1% | 46.2% | 2.4 | |||
| Global Infrastructure Investors V (2024) (3) | 17,295 | 3,795 | 113 | 4,033 | 4,146 | —% | —% | — | |||
| Global Climate Transition Fund (2024) (3) | 3,128 | — | — | — | — | —% | —% | — | |||
| Real Estate Partners Americas IV (2024) (3) | 2,272 | — | — | — | — | —% | —% | — | |||
| North America Fund XIV (2025)(3) | 21,893 | — | — | — | — | —% | —% | — | |||
| Asia Pacific Infrastructure Investors III (2025)(3) | 4,473 | — | — | — | — | —% | —% | — | |||
| Subtotal - Included Funds | 274,440 | 207,461 | 201,741 | 168,867 | 370,608 | 15.7% | 12.0% | 1.8 | |||
| All Funds | $290,915 | $223,936 | $252,010 | $168,867 | $420,877 | 25.5% | 18.5% | 1.9 |
(1)These funds were not contributed to KKR as part of the acquisition of the assets and liabilities of KKR & Co. (Guernsey) L.P. (formerly known as KKR Private
Equity Investors, L.P.) on October 1, 2009.
(2)Where commitments are not U.S. dollar-denominated, such amounts have been converted into U.S. dollars based on the exchange rate prevailing on
March 31, 2026.
(3)The gross IRR, net IRR and gross multiple of invested capital are calculated for our investment funds that made their first investment at least 24 months
prior to March 31, 2026. We therefore have not calculated gross IRRs, net IRRs and gross multiples of invested capital with respect to these funds.
(4)An investment is considered realized when it has been disposed of or has otherwise generated disposition proceeds or current income that has been
distributed by the relevant fund.
(5)IRRs measure the aggregate annual compounded returns generated by a fund's investments over a holding period. Net IRRs are calculated after giving
effect to the allocation of realized and unrealized carried interest and the payment of any applicable management fees and organizational expenses.
Gross IRRs are calculated before giving effect to the allocation of realized and unrealized carried interest and the payment of any applicable management
fees and organizational expenses.
The gross multiples of invested capital measure the aggregate value generated by a fund's investments in absolute terms. Each multiple of invested capital
is calculated by adding together the total realized and unrealized values of a fund's investments and dividing by the total amount of capital invested by the
fund. Such amounts do not give effect to the allocation of realized and unrealized carried interest or the payment of any applicable management fees or
organizational expenses.
KKR's Private Equity and Real Assets funds may utilize third-party financing facilities to provide liquidity to such funds. The above net and gross IRRs are
calculated from the time capital contributions are due from fund investors to the time fund investors receive a related distribution from the fund, and the
use of such financing facilities generally decreases the amount of time that would otherwise be used to calculate IRRs, which tends to increase IRRs when
fair value grows over time and decrease IRRs when fair value decreases over time.
For more information, see "Risk Factors—Risks Related to Our Investment Activities—Future results of our investments
may be different than, and may not achieve the levels of, any of our historical returns" in our Annual Report.
Credit and Liquid Strategies
The table below presents information as of March 31, 2026, relating to our current credit investment vehicles reported in
our Credit and Liquid Strategies business line for which we have the ability to earn carried interest. This data does not reflect
acquisitions or disposals of investments, changes in investment values, or distributions occurring after March 31, 2026.
| Investment Period | Amount ($ in millions) | ||||||||
| Start Date (1) | End Date (2) | Commitment (3) | Uncalled Commitments | Invested | Realized | Remaining Cost (4) | Remaining Fair Value | Gross Accrued Carried Interest | |
| Credit and Liquid Strategies Business Line | |||||||||
| Opportunities Fund II | 11/2021 | 1/2026 | $2,420 | $897 | $1,427 | $291 | $1,302 | $1,598 | $53 |
| Dislocation Opportunities Fund | 8/2019 | 11/2021 | 2,967 | 268 | 2,522 | 1,866 | 1,292 | 1,310 | 69 |
| Special Situations Fund II | 2/2015 | 3/2019 | 3,525 | 284 | 3,241 | 2,651 | 615 | 640 | — |
| Special Situations Fund | 1/2013 | 1/2016 | 2,274 | 1 | 2,273 | 1,899 | 94 | 138 | — |
| Mezzanine Partners | 7/2010 | 3/2015 | 1,023 | 33 | 990 | 1,166 | 184 | 2 | — |
| Asset-Based Finance Partners II | 3/2024 | 3/2028 | 5,571 | 4,420 | 1,151 | — | 1,151 | 1,242 | 12 |
| Asset-Based Finance Partners | 10/2020 | 7/2025 | 2,059 | 385 | 1,674 | 627 | 1,493 | 1,619 | 81 |
| Private Credit Opportunities Partners II | 12/2015 | 12/2020 | 2,245 | 188 | 2,057 | 1,089 | 1,264 | 1,117 | — |
| Lending Partners IV | 3/2022 | 9/2026 | 1,150 | 173 | 977 | 201 | 977 | 1,001 | 15 |
| Lending Partners III | 4/2017 | 11/2021 | 1,498 | 540 | 958 | 1,247 | 390 | 338 | 30 |
| Lending Partners II | 6/2014 | 6/2017 | 1,336 | 157 | 1,179 | 1,276 | — | 3 | — |
| Lending Partners | 12/2011 | 12/2014 | 460 | 40 | 420 | 466 | — | 1 | — |
| Lending Partners Europe II | 5/2019 | 9/2023 | 837 | 159 | 678 | 792 | 193 | 199 | 9 |
| Lending Partners Europe | 3/2015 | 3/2019 | 848 | 184 | 662 | 632 | 53 | 49 | — |
| Asia Credit Opportunities II | 2/2025 | 12/2028 | 1,795 | 1,604 | 191 | — | 191 | 186 | — |
| Asia Credit Opportunities | 1/2021 | 5/2025 | 1,084 | 197 | 887 | 330 | 713 | 866 | 42 |
| Other Alternative Credit Vehicles | Various | Various | 19,037 | 8,191 | 10,898 | 7,427 | 5,738 | 7,136 | (9) |
| Total Credit and Liquid Strategies | $50,129 | $17,721 | $32,185 | $21,960 | $15,650 | $17,445 | $302 |
(1)The start date represents the start of the fund's investment period as defined in the fund's governing documents and may or may not be the same as the
date upon which management fees begin to accrue.
(2)The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which
management fees cease to accrue. For funds that initially charge management fees on the basis of committed capital, the end date is generally the date
on or after which the management fees begin to be calculated instead on the basis of invested capital and may, for certain funds, begin to be calculated
using a lower rate.
(3)The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general
partner. Foreign currency commitments have been converted into U.S. dollars based on the foreign exchange rate that prevailed on March 31, 2026.
(4)The remaining cost represents the initial investment of the general partner and limited partners, reduced for returns of capital.
The following table presents information regarding certain leveraged credit strategies managed by KKR from inception to
March 31, 2026. The information presented below is not intended to be representative of any past or future performance for
any particular period other than the period presented below. Past performance is no guarantee of any future result.
| Leveraged Credit Strategy | Inception Date | Gross Returns | Net Returns | Benchmark (1) | Benchmark Gross Returns | |||||
| Multi-Asset Credit Composite | Jul 2008 | 7.04% | 6.35% | 50% S&P/LSTA Loan Index, 50% BoAML HY Master II Index (2) | 5.77% | |||||
| Opportunistic Credit (3) | May 2008 | 10.17% | 8.69% | 50% S&P/LSTA Loan Index, 50% BoAML HY Master II Index (3) | 5.94% | |||||
| Bank Loans | Apr 2011 | 5.77% | 5.20% | S&P/LSTA Loan Index (4) | 4.81% | |||||
| High-Yield | Apr 2011 | 6.21% | 5.63% | BoAML HY Master II Index (5) | 5.60% | |||||
| European Leveraged Loans (6) | Sep 2009 | 4.81% | 4.29% | CS Inst West European Leveraged Loan Index (7) | 3.93% | |||||
| European Credit Opportunities (6) | Sept 2007 | 6.84% | 5.61% | S&P European Leveraged Loans (All Loans) (8) | 4.50% |
(1)The benchmarks referred to herein include the S&P/LSTA Leveraged Loan Index (the "S&P/LSTA Loan Index"), S&P/LSTA U.S. B/BB Ratings Loan Index (the
"S&P/LSTA BB-B Loan Index"), the Bank of America Merrill Lynch High Yield Master II Index (the "BoAML HY Master II Index"), the BofA Merrill Lynch BB-B
US High Yield Index (the "BoAML HY BB-B Constrained"), the Credit Suisse Institutional Western European Leveraged Loan Index (the "CS Inst West
European Leveraged Loan Index"), and S&P European Leveraged Loans (All Loans). The S&P/LSTA Loan Index is a daily tradable index for the U.S. loan
market that seeks to mirror the market-weighted performance of the largest institutional loans that meet certain criteria. The BoAML HY Master II Index is
an index for high-yield corporate bonds. It is designed to measure the broad high-yield market, including lower-rated securities. The CS Inst West
European Leveraged Loan Index contains only institutional loan facilities priced above 90, excluding TL and TLa facilities and loans rated CC, C or are in
default. The S&P European Leveraged Loan Index reflects the market-weighted performance of institutional leveraged loan portfolios investing in
European credits. While the returns of our leveraged credit strategies reflect the reinvestment of income and dividends, none of the indices presented in
the chart above reflect such reinvestment, which has the effect of increasing the reported relative performance of these strategies as compared to the
indices. Furthermore, these indices are not subject to management fees, incentive allocations, or expenses.
(2)Performance is based on a blended composite of Bank Loans, High Yield, and Structured Credit strategy accounts. The benchmark used for purposes of
comparison for the Multi-Asset Credit Composite strategy is based on 65% S&P/LSTA Loan Index and 35% BoAML HY Master II Index to May 2022, and
50% S&P/LSTA Loan Index, 50% BoAML HY Master II Index, from June 2022.
(3)The Opportunistic Credit strategy invests in high-yield securities and corporate loans with no preset allocation. The benchmark used for purposes of
comparison for the Opportunistic Credit strategy presented herein is based on 50% S&P/LSTA Loan Index and 50% BoAML HY Master II Index. Funds
within this strategy may utilize third-party financing facilities to enhance investment returns. In cases where financing facilities are used, the amounts
drawn on the facility are deducted from the assets of the fund in the calculation of net asset value, which tends to increase returns when net asset value
grows over time and decrease returns when net asset value decreases over time.
(4)Performance is based on a composite of portfolios that primarily invest in leveraged loans. The benchmark used for purposes of comparison for the Bank
Loans strategy is based on the S&P/LSTA Loan Index.
(5)Performance is based on a composite of portfolios that primarily invest in high-yield securities. The benchmark used for purposes of comparison for the
High Yield strategy is based on the BoAML HY Master II Index.
(6)The returns presented are calculated based on local currency.
(7)Performance is based on a composite of portfolios that primarily invest in higher quality leveraged loans. The benchmark used for purposes of comparison
for the European Leveraged Loans strategy is based on the CS Inst West European Leveraged Loan Index.
(8)Performance is based on a composite of portfolios that primarily invest in European institutional leveraged loans. The benchmark used for purposes of
comparison for the European Credit Opportunities strategy is based on the S&P European Leveraged Loans (All Loans) Index.
The following table presents information regarding our alternative credit investment funds where investors have capital
commitments from inception to March 31, 2026. The information presented below is not intended to be representative of any
past or future performance for any particular period other than the period presented below. Past performance is no
guarantee of any future result.
| Credit and Liquid Strategies Investment Funds | Investment Period Start Date | Commitment | Invested (1) | Realized (1) | Unrealized | Total Value | Gross IRR (2) | Net IRR (2) | Multiple of Invested Capital (3) | |||||||||
| ($ in Millions) | ||||||||||||||||||
| Opportunities Fund II | Nov 2021 | $2,420 | $1,427 | $291 | $1,598 | $1,889 | 16.4% | 12.5% | 1.3 | |||||||||
| Dislocation Opportunities Fund | Aug 2019 | 2,967 | 2,522 | 1,866 | 1,310 | 3,176 | 8.4% | 6.4% | 1.3 | |||||||||
| Special Situations Fund II | Feb 2015 | 3,525 | 3,241 | 2,651 | 640 | 3,291 | 0.3% | (1.4)% | 1.0 | |||||||||
| Special Situations Fund | Jan 2013 | 2,274 | 2,273 | 1,899 | 138 | 2,037 | (2.3)% | (4.1)% | 0.9 | |||||||||
| Mezzanine Partners | July 2010 | 1,023 | 990 | 1,166 | 2 | 1,168 | 6.5% | 2.7% | 1.2 | |||||||||
| Asset-Based Finance Partners II | Mar 2024 | 5,571 | 1,151 | — | 1,242 | 1,242 | 13.1% | 9.0% | 1.1 | |||||||||
| Asset-Based Finance Partners | Oct 2020 | 2,059 | 1,674 | 627 | 1,619 | 2,246 | 13.9% | 10.4% | 1.3 | |||||||||
| Private Credit Opportunities Partners II | Dec 2015 | 2,245 | 2,057 | 1,089 | 1,117 | 2,206 | 1.6% | (0.1)% | 1.1 | |||||||||
| Lending Partners IV | Mar 2022 | 1,150 | 977 | 201 | 1,001 | 1,202 | 15.0% | 11.8% | 1.2 | |||||||||
| Lending Partners III | Apr 2017 | 1,498 | 958 | 1,247 | 338 | 1,585 | 13.7% | 11.2% | 1.7 | |||||||||
| Lending Partners II | Jun 2014 | 1,336 | 1,179 | 1,276 | 3 | 1,279 | 2.8% | 1.4% | 1.1 | |||||||||
| Lending Partners | Dec 2011 | 460 | 420 | 466 | 1 | 467 | 3.2% | 1.6% | 1.1 | |||||||||
| Lending Partners Europe II | May 2019 | 837 | 678 | 792 | 199 | 991 | 16.6% | 13.3% | 1.5 | |||||||||
| Lending Partners Europe | Mar 2015 | 848 | 662 | 632 | 49 | 681 | 0.9% | (0.9)% | 1.0 | |||||||||
| Asia Credit Opportunities II | Feb 2025 | 1,795 | 191 | — | 186 | 186 | N/A | N/A | 1.0 | |||||||||
| Asia Credit Opportunities | Jan 2021 | 1,084 | 887 | 330 | 866 | 1,196 | 14.6% | 11.1% | 1.3 | |||||||||
| Other Alternative Credit Vehicles | Various | 19,037 | 10,898 | 7,427 | 7,136 | 14,563 | N/A | N/A | N/A | |||||||||
| All Funds | $50,129 | $32,185 | $21,960 | $17,445 | $39,405 |
(1)Recycled capital is excluded from the amounts invested and realized.
(2)These credit funds utilize third-party financing facilities to provide liquidity to such funds, and in such event IRRs are calculated from the time capital
contributions are due from fund investors to the time fund investors receive a related distribution from the fund. The use of such financing facilities
generally decreases the amount of invested capital that would otherwise be used to calculate IRRs, which tends to increase IRRs when fair value grows
over time and decrease IRRs when fair value decreases over time. IRRs measure the aggregate annual compounded returns generated by a fund's
investments over a holding period and are calculated taking into account recycled capital. Net IRRs presented are calculated after giving effect to the
allocation of realized and unrealized carried interest and the payment of any applicable management fees and organizational expenses. Gross IRRs are
calculated before giving effect to the allocation of carried interest and the payment of any applicable management fees and organizational expenses.
(3)The multiples of invested capital measure the aggregate value generated by a fund's investments in absolute terms. Each multiple of invested capital is
calculated by adding together the total realized and unrealized values of a fund's investments and dividing by the total amount of capital invested by the
investors. The use of financing facilities generally decreases the amount of invested capital that would otherwise be used to calculate multiples of
invested capital, which tends to increase multiples when fair value grows over time and decrease multiples when fair value decreases over time. Such
amounts do not give effect to the allocation of any realized and unrealized returns on a fund's investments to the fund's general partner pursuant to a
carried interest or the payment of any applicable management fees and are calculated without taking into account recycled capital.
For additional information regarding impact of market conditions on the value and performance of our investments, see
"Risk Factors—Risks Related to Our Business—Difficult market and economic conditions can, and periodically do, materially
and adversely affect KKR." and "Risk Factors—Risks Related to Our Investment Activities—Future results of our investments
may be different than, and may not achieve the levels of, any of our historical returns" in our Annual Report.
Segment Balance Sheet Measures
Asset Management Segment Investment Portfolio
To the extent our investments are realized at values above or below their cost in future periods, adjusted net income
would be positively or negatively affected by the amount of any such gain or loss, respectively, during the period in which the
realization event occurs.
Our investments in the Asset Management segment by asset class as of March 31, 2026 are as follows:
| As of March 31, 2026 | ||||||
| Asset Management Segment Investments (1) | Cost | Fair Value | Fair Value as a Percentage of Total Asset Management Investments | |||
| ($ in thousands) | ||||||
| Traditional Private Equity | $1,474,950 | $3,243,448 | 41% | |||
| Growth Equity | 269,737 | 1,019,211 | 13% | |||
| Private Equity Total | 1,744,687 | 4,262,659 | 54% | |||
| Real Estate | 1,488,172 | 1,243,305 | 16% | |||
| Infrastructure | 289,734 | 547,007 | 7% | |||
| Energy | 31,946 | 343,207 | 4% | |||
| Real Assets Total | 1,809,852 | 2,133,519 | 27% | |||
| Alternative Credit | 498,078 | 582,830 | 7% | |||
| Leveraged Credit | 479,349 | 390,088 | 5% | |||
| Credit Total | 977,427 | 972,918 | 12% | |||
| Other | 692,495 | 629,967 | 7% | |||
| Total Asset Management Segment Investments | $5,224,461 | $7,999,063 | 100% |
(1)Investments is a term used solely for purposes of financial presentation of a portion of KKR's balance sheet and includes majority ownership of
subsidiaries that operate KKR's asset management and insurance businesses, including the general partner interests of KKR's investment funds.
Investments presented are principally the assets measured at fair value that are held by KKR's asset management segment, which, among other things,
does not include the underlying investments held by Global Atlantic and Marshall Wace. This table excludes investments in our Strategic Holdings and
Insurance segments, for which additional information is available in Note 21 "Segment Reporting" in our financial statements.
Insurance Segment Investment Portfolio
As of March 31, 2026, the Insurance segment’s investment portfolio (on an unconsolidated basis, excluding the
elimination of intercompany balances) consisted of the following categories of investments:
| ($ in thousands) | As of March 31, 2026 | December 31, 2025 | ||||||
| Fixed-maturity securities, available-for-sale | $92,067,828 | 47% | $95,672,043 | 48% | ||||
| Mortgage and other loan receivables | 52,779,605 | 27% | 53,638,617 | 27% | ||||
| Fixed-maturity securities, trading | 26,670,358 | 14% | 26,419,591 | 13% | ||||
| Real assets | 15,401,351 | 8% | 15,369,758 | 8% | ||||
| Other investments | 8,041,000 | 4% | 6,936,028 | 3% | ||||
| Funds withheld receivables, at interest | 2,267,167 | 1% | 2,324,346 | 1% | ||||
| Total investments | $197,227,309 | $200,360,383 |
The portion of Insurance segment’s investment portfolio consisting of floating rate assets was 26% and 27% as of
March 31, 2026 and December 31, 2025, respectively.
Credit Quality of Fixed Maturity Securities
As of March 31, 2026, 95%, and 91% of the Insurance segment’s fixed maturity securities were considered investment
grade under ratings from the Securities Valuation Office of the NAIC and NRSROs, respectively. As of December 31, 2025, 95%,
and 91% of fixed maturity securities were considered investment grade under ratings from NAIC and NRSROs, respectively.
Securities where a rating by a NRSRO was not available are considered investment grade if they have a NAIC designation of
“1” or “2.”
The Securities Valuation Office of the NAIC evaluates the fixed maturity security investments of insurers for regulatory
reporting and capital assessment purposes and assigns securities to one of six credit quality categories called “NAIC
designations.” Using an internally developed rating is permitted by the NAIC if no rating is available. These designations are
generally similar to the credit quality designations of NRSROs for marketable fixed maturity securities, except for certain
structured securities as described below. NAIC designations of “1,” highest quality, and “2,” high quality, include fixed
maturity securities generally considered investment grade by NRSROs. NAIC designations “3” through “6” include fixed
maturity securities generally considered below investment grade by NRSROs.
Consistent with the NAIC Process and Procedures Manual, a NRSRO rating was assigned based on the following criteria: (i)
the equivalent S&P rating where the security is rated by one NRSRO; (ii) the equivalent S&P rating of the lowest NRSRO when
the security is rated by two NRSROs; and (iii) the equivalent S&P rating of the second lowest NRSRO if the security is rated by
three or more NRSROs. If the lowest two NRSROs’ ratings are equal, then such rating will be the assigned rating. NRSROs’
ratings available for the periods presented were S&P, Fitch, Moody’s, DBRS, Inc., and Kroll Bond Rating Agency, Inc. If no
rating is available from a rating agency, then an internally developed rating is used.
Within the funds withheld receivable at interest portfolio, 98% and 97% of the fixed maturity securities were investment
grade by NAIC designation as of March 31, 2026 and December 31, 2025, respectively.
Trading fixed maturity securities primarily back funds withheld payable at interest where the investment performance is
ceded to reinsurers under the terms of the respective reinsurance agreements.
Unrealized Gains and Losses on Available-for-Sale Fixed Maturity Securities
The Insurance segment’s investments in available-for-sale (“AFS”) fixed maturity securities are reported at fair value with
changes in fair value recorded in other comprehensive income as unrealized gains or losses, net of taxes and offsets.
Unrealized gains and losses can be created by changes in interest rates or by changes in credit spreads.
As of March 31, 2026 and December 31, 2025, the Insurance segment had gross unrealized losses on below investment
grade AFS fixed maturity securities of $370.2 million and $313.8 million based on NRSRO ratings, and $246.9 million and
$187.7 million based on NAIC ratings, respectively. As of March 31, 2026, unrealized losses were not recognized in net income
on these fixed maturity securities since the Insurance segment neither intends to sell the securities nor does it believe that it
is more likely than not that it will be required to sell these securities before recovery of their cost or amortized cost basis.
Credit Quality of Mortgage and Other Loan Receivables
Mortgage and other loan receivables consist of commercial and residential mortgage loans, consumer loans, and other
loan receivables. As of both March 31, 2026 and December 31, 2025, 27% of Global Atlantic's total investments consisted of
mortgage and other loan receivables, respectively.
The Insurance segment invests in U.S. mortgage loans, comprised of first lien and mezzanine commercial mortgage loans
and first lien residential mortgage loans. For the commercial mortgage loan portfolio, the most prevalent property type is
multi-family residential buildings, which represents approximately half of the portfolio as of both March 31, 2026 and
December 31, 2025. Office and retail properties represent approximately 20% and 21% of the portfolio as of March 31, 2026
and December 31, 2025, respectively.
The Insurance segment’s commercial mortgage loans are assigned NAIC designations, with designations “CM1” and
“CM2” considered to be investment grade. As of both March 31, 2026 and December 31, 2025, 91% of the commercial
mortgage loan portfolio were rated investment grade based on NAIC designation, respectively. The payment status of over
99% of the commercial mortgage loan portfolio is current as of both March 31, 2026 and December 31, 2025, respectively.
The loan-to-value ratio is expressed as a percentage of the current amount of the loan relative to the value of the
underlying collateral. As of March 31, 2026 and December 31, 2025, approximately 90% and 89%, respectively, of the
commercial mortgage loans have a loan-to-value ratio of 70% or less, and as of both March 31, 2026 and December 31, 2025,
2% have loan-to-value ratio over 90%, respectively.
Changing economic conditions and updated assumptions affect the Insurance segment’s assessment of the collectibility
of commercial mortgage loans. Changing vacancies and rents are incorporated into the analysis performed to measure the
allowance for credit losses. In addition, the Insurance segment continuously monitors its commercial mortgage loan portfolio
to identify risk. Areas of emphasis are properties that have exposure to specific geographic events or have deteriorating
credit.
The Insurance segment’s residential mortgage loan portfolio primarily includes mortgage loans backed by single family
rental properties, prime loans, and re-performing loans that were purchased at a discount after they were modified and
returned to performing status. The Insurance segment also extends financing to counterparties in the form of repurchase
agreements secured by mortgage loans, including performing and non-performing mortgage loans.
As of March 31, 2026, the payment status of 97% of the residential mortgage loan portfolio is current, and approximately
$258.6 million is 90 days or more past due or in process of foreclosure (representing 1% of the total residential mortgage
portfolio). As of December 31, 2025, the payment status of 97% of the residential mortgage loan portfolio was current and
approximately $273.4 million were 90 days or more past due or in process of foreclosure (representing 1% of the total
residential mortgage portfolio).
The weighted average loan-to-value ratio for residential mortgage loans was 64% as of both March 31, 2026 and
December 31, 2025.
The Insurance segment’s consumer loan portfolio is primarily comprised of home improvement loans, residential solar
loans, student loans, and auto loans. As of March 31, 2026, 97% of the consumer loan portfolio is in current status and
approximately $33.7 million is 90 days or more past due or in process of foreclosure (representing 1% of the total consumer
loan portfolio).
See Note 7 “Investments” in the accompanying financial statements in this report for additional information regarding
the Insurance segment’s investment portfolio.
Additional Information
To provide supplemental information to stockholders about the net assets of KKR on a segment basis, KKR’s book value
was $33.2 billion as of March 31, 2026, which included cash and short-term investments of $5.0 billion. KKR's book value
includes its net investment in Global Atlantic, investments in the Asset Management and Strategic Holdings segments, and the
net impact of certain other assets and liabilities, including income taxes. KKR's book value excludes the net assets allocable to
investors in KKR’s investment funds and other noncontrolling interest holders. For the three months ended March 31, 2026
the Asset Management segment transferred $0.7 billion of investments to the Insurance segment for which no gain or loss
was recognized upon transfer.
Reconciliations to GAAP Measures
Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders
| Three Months Ended | |||
| ($ in thousands) | March 31, 2026 | March 31, 2025 | |
| Net Income (Loss) - KKR Common Stockholders (GAAP) | $364,799 | $(185,924) | |
| Preferred Stock Dividends | 40,430 | — | |
| Net Income (Loss) Attributable to Noncontrolling Interests | (127,724) | 870,422 | |
| Income Tax Expense (Benefit) | 185,385 | 86,569 | |
| Income (Loss) Before Tax (GAAP) | $462,890 | $771,067 | |
| Impact of Consolidation and Other | 53,946 | (1,017,351) | |
| Preferred Stock Dividends | (40,430) | — | |
| Income Taxes on Adjusted Earnings | (247,965) | (260,655) | |
| Asset Management Adjustments: | |||
| Unrealized (Gains) Losses | 177,131 | 379,337 | |
| Unrealized Carried Interest | (9,664) | (807,713) | |
| Unrealized Carried Interest Compensation | 7,733 | 646,170 | |
| Transaction-related and Non-operating Items(1) | 34,009 | 10,551 | |
| Equity-based Compensation(2) | 68,396 | 78,277 | |
| Equity-based Compensation - Performance based(2) | 82,319 | 84,599 | |
| Amortization of Acquired Intangibles | 3,168 | — | |
| Strategic Holdings Adjustments: | |||
| Unrealized (Gains) Losses | 120,613 | (321,408) | |
| Insurance Adjustments: | |||
| (Gains) Losses from Investments | 508,943 | 1,358,940 | |
| Non-Operating Changes in Policy Liabilities and Derivatives | (26,058) | 86,631 | |
| Transaction-Related and Non-Operating Items(1) | 13,961 | 152 | |
| Equity-Based Compensation | 26,360 | 20,692 | |
| Amortization of Acquired Intangibles | 14,187 | 4,699 | |
| Adjusted Net Income | $1,249,539 | $1,033,988 | |
| Interest Expense, Net | 83,011 | 74,509 | |
| Preferred Stock Dividends | 40,430 | 13,477 | |
| Net Income Attributable to Noncontrolling Interests | 4,863 | 3,484 | |
| Income Taxes on Adjusted Earnings | 247,965 | 260,655 | |
| Total Segment Earnings | $1,625,808 | $1,386,113 | |
| Net Realized Performance Income | (197,191) | (87,989) | |
| Net Realized Investment Income | (103,616) | (185,263) | |
| Total Operating Earnings | $1,325,001 | $1,112,861 | |
| Total Investing Earnings | 300,807 | 273,252 | |
| Depreciation and Amortization | 20,547 | 13,233 | |
| Adjusted EBITDA | $1,646,355 | $1,399,346 |
(1)For the three months ended March 31, 2026, Transaction-related and Non-operating items includes (i) $30 million related to transaction-related costs and
other corporate actions, and (ii) $18 million of costs associated with certain integration, restructuring, and other non-operating expenses across our Asset
Management and Insurance businesses.
(2)Inclusive of equity incentive awards granted in April 2026, and assuming no additional grants and forfeitures, as of the date of this filing, the estimated
Asset Management equity-based compensation for the second quarter of 2026 is expected to be approximately $190 million of expense associated with
time-based vesting awards and performance-based vesting awards. This estimate is subject to various assumptions and could be impacted, positively or
negatively, by various factors, including but not limited to if additional grants were made in the second quarter of 2026 or forfeitures of existing grants
occurred during the second quarter of 2026, which may materially change our estimate.
KKR & Co. Inc. Stockholders' Equity - Common Stock
| As of | |
| ($ in thousands) | March 31, 2026 |
| ($ in thousands) | |
| KKR & Co. Inc. Stockholders' Equity - Common Stock (GAAP) | $27,952,749 |
| Impact of Consolidation and Other | 330,118 |
| Exchangeable Securities | 367,286 |
| Accumulated Other Comprehensive (Income) Loss (AOCI) and Other (Insurance) | 4,701,127 |
| Accumulated Unrealized (Gains) Losses on Loans carried at Fair Value (Insurance) | (104,073) |
| KKR Book Value**(1)** | $33,247,207 |
(1)Book Value is a non-GAAP performance measure, which provides additional insight into the net assets of KKR presented on a basis that (i) excludes the net
assets that are allocated to investors in KKR’s investment funds and other noncontrolling interest holders, (ii) includes the net assets that are attributable
to certain securities exchangeable into shares of common stock of KKR & Co. Inc., (iii) includes the net investment in Global Atlantic, investments in the
Asset Management and Strategic Holdings segments, and (iv) includes the net impact of certain other assets and liabilities, including the net impact of
KKR's tax assets and liabilities as calculated under GAAP. Book Value excludes the dilutive impact of the conversion of any of KKR & Co. Inc.’s Series D
Mandatory Convertible Preferred Stock. If all outstanding shares of the Series D Mandatory Convertible Preferred Stock were converted into KKR & Co.
Inc. common stock as of March 31, 2026, our Book Value would have increased by $2.5 billion and our common stock outstanding would have increased
by 21.4 million shares. After March 31, 2026, equity awards representing 21.0 million shares of common stock vested and will be included in the number
of adjusted shares outstanding beginning in the second quarter of 2026.
Cash and Cash Equivalents - Asset Management and Strategic Holdings
| As of | |
| ($ in thousands) | March 31, 2026 |
| Cash and Cash Equivalents - Asset Management and Strategic Holdings (GAAP) | $9,273,480 |
| Impact of Consolidation and Other | (4,587,552) |
| Short-term Investments | 281,697 |
| Cash and Short-term Investments | $4,967,625 |
Investments - Asset Management and Strategic Holdings
| As of | |
| ($ in thousands) | March 31, 2026 |
| Investments - Asset Management and Strategic Holdings (GAAP) | $128,050,466 |
| Impact of Consolidation and Other | (119,769,705) |
| Short-term Investments | (281,697) |
| Investments - Asset Management Segment | $7,999,064 |
Liquidity
We manage our liquidity and capital requirements by (a) focusing on our cash flows before the consolidation of our funds
and CFEs and the effect of changes in short term assets and liabilities, which we anticipate will be settled for cash within one
year, and (b) seeking to maintain access to sufficient liquidity through various sources. The overall liquidity framework and
cash management approach of our insurance business are also based on seeking to build an investment portfolio that is cash
flow matched, providing cash inflows from insurance assets that meet our insurance companies' expected cash outflows to
pay their liabilities. Our primary cash flow activities typically involve (i) generating cash flow from operations; (ii) generating
income from investment activities, by investing in investments that generate yield (namely interest and dividends), as well as
through the sale of investments and other assets; (iii) funding capital commitments that we have made to, and advancing
capital to, our funds and CLOs; (iv) developing and funding new investment strategies, investment products, and other growth
initiatives, including acquisitions of other investments, assets, and businesses; (v) underwriting and funding capital
commitments in our capital markets business; (vi) distributing cash flow to our stockholders and any holders of our preferred
stock, if any; and (vii) paying borrowings, interest payments, and repayments under credit agreements, our senior and
subordinated notes, and other borrowing arrangements. See "—Liquidity," "—Liquidity Needs," and "—Dividends and Stock
Repurchases."
See "Risk Factors" and "—Business Environment" in this report for more information on factors that may impact our
business, financial performance, operating results, and valuations.
Sources of Liquidity
Our primary sources of liquidity consist of amounts received from: (i) our operating activities, including the fees earned
from our funds, portfolio companies, and capital markets transactions; (ii) realizations on carried interest from our investment
funds; (iii) interest and dividends from investments that generate yield, including our investments in CLOs; (iv) in our
insurance business, cash inflows in respect of new premiums, policyholder deposits, reinsurance transactions, and funding
agreements, including through memberships in FHLBs; (v) realizations on and sales of investments and other assets, including
the transfers of investments or other assets for fund formations (including CLOs and other investment vehicles); and (vi)
borrowings, including advances under our revolving credit facilities, debt offerings, repurchase agreements, and other
borrowing arrangements. In addition, we may generate cash proceeds from issuances of our or our subsidiaries' equity
securities. We have access to funding under various credit facilities, other borrowing arrangements and other sources of
liquidity that we have entered into with major financial institutions or which we receive from the capital markets. For a
discussion of our debt obligations, including our debt securities, revolving credit agreements and loans, see Note 16 "Debt
Obligations" in our financial statements.
Many of our investment funds like our private equity and real assets funds provide for carried interest. With respect to
our carry-paying investment funds, carried interest is eligible to be distributed to the general partner of the fund only after all
of the following are met: (i) a realization event has occurred (e.g., sale of a portfolio company, dividend, etc.); (ii) the vehicle
has achieved positive overall investment returns since its inception, in excess of performance hurdles where applicable, and is
accruing carried interest; and (iii) with respect to investments with a fair value below cost, cost has been returned to fund
investors in an amount sufficient to reduce remaining cost to the investments' fair value. Even after all of the preceding
conditions are met, the general partner of the fund may, in its sole discretion, decide to defer the distribution of carried
interest to it to a later date. In addition, these funds generally include what is called a “clawback” provision, which provides
that the general partner must return any carried interest that is paid in excess of what the general partner is entitled to
receive at the end of the term of the fund, as discussed further below.
As of March 31, 2026, certain of our investment funds had met the first and second criteria, as described above, but did
not meet the third criteria. In these cases, carried interest accrues on the consolidated statement of operations, but will not
be distributed in cash to us as the general partner of an investment fund upon a realization event. For a fund that has a fair
value above cost, overall, and is otherwise accruing carried interest, but has one or more investments where fair value is
below cost, the shortfall between cost and fair value for such investments is referred to as a "netting hole." When netting
holes are present, realized gains on individual investments that would otherwise allow the general partner to receive carried
interest distributions are instead used to return invested capital to our funds' limited partners in an amount equal to the
netting hole. Once netting holes have been filled with either (i) return of capital equal to the netting hole for those
investments where fair value is below cost or (ii) increases in the fair value of those investments where fair value is below
cost, then realized carried interest will be distributed to the general partner upon a realization event. A fund that is in a
position to pay cash carry refers to a fund for which carried interest is expected to be paid to the general partner upon the
next material realization event, which includes funds with no netting holes as well as funds with a netting hole that is
sufficiently small in size such that the next material realization event would be expected to result in the payment of carried
interest. Strategic investor partnerships with fund investors may require netting across the various funds in which they invest,
which may reduce the carried interest we otherwise would have earned if such fund investors were to have invested in our
funds without the existence of the strategic investor partnership. As of March 31, 2026, netting holes in excess of $50 million
existed at Global Impact Fund II and Global Impact Fund in the amount of $297 million and $59 million, respectively. The
remaining unrealized gains accrued at these funds as of March 31, 2026 are in excess of their netting holes. In accordance
with the criteria set forth above, other funds currently have and may in the future develop netting holes, and netting holes for
those and other funds may otherwise increase or decrease in the future.
If the investment fund has distributed carried interest but subsequently does not have sufficient value to provide for the
distribution of carried interest at the end of the life of the investment fund, the general partner is typically required to return
previously distributed carried interest to the fund investors. Current and former employees who received distributions of
carried interest subject to clawback would be required to return the amount of such distributions to KKR. However, it is KKR’s
obligation to return carried interest subject to clawback to the fund investors. As of March 31, 2026, approximately $195
million of previously distributed carried interest, in aggregate, was subject to a clawback obligation, assuming that all
applicable carry-paying investment funds were liquidated at their reported fair values as of March 31, 2026. As of March 31,
2026, there are no investment funds subject to a clawback obligation in excess of $50 million that has not already reduced net
realized performance income. See Note 24 "Commitments and Contingencies—Contingent Repayment Guarantees" in our
financial statements included elsewhere in this report for further information. See also the negative amounts included in the
Carried Interest column in the table included in this Item 2 in “Fund Performance Metrics” for further information on
clawback obligations.
Liquidity Needs
We expect that our primary liquidity needs will consist of cash required to meet various obligations, including, without
limitation, to:
- continue to support and grow our asset management business, including seeding new investment strategies,
supporting capital commitments made by our investment vehicles to existing and future funds, co-investments
and otherwise supporting the investment vehicles that we sponsor, and acquiring other assets, businesses, and
investments for our businesses;
-
continue to support and grow our insurance business;
-
continue to support and grow our strategic holdings business, including through the acquisition of new operating
companies;
- grow and expand our businesses generally, including by acquiring or launching new, complementary, or adjacent
businesses;
- warehouse investments in portfolio companies or other investments for the benefit of one or more of our funds,
accounts or CLOs or other investment vehicles pending the contribution of committed capital by the fund
investors in such investment vehicles, and advancing capital to them for operational or other needs;
-
funding requirements to levered investment vehicles or structured transactions;
-
service debt obligations including the payment of obligations at maturity, on interest payment dates or upon
redemption;
-
fund cash operating expenses and contingencies, including for litigation matters and guarantees;
-
pay corporate income taxes and other taxes;
-
pay policyholders and amounts in our insurance business related to investment, reinvestment, reinsurance, or
funding agreement activity;
-
pay amounts that may become due under our tax receivable agreement;
-
pay cash dividends in accordance with our dividend policy for our common stock or the terms of our preferred
stock;
- underwrite commitments, advance loan proceeds, and fund syndication commitments within our capital
markets business;
-
post or return collateral in respect of derivative contracts;
-
satisfy regulatory requirements for our capital markets business, risk retention requirements for CLOs (to the
extent they may apply), or to address capital needs of unregulated and regulated subsidiaries, including capital
and collateral requirements, as applicable, for our insurance and broker-dealer subsidiaries; and
- repurchase shares of our common stock or retire equity awards pursuant to the share repurchase program or
repurchase or redeem other securities issued by us (for a discussion of KKR's share repurchase program, see
Note 22 "Equity" in our financial statements).
Capital Commitments
The agreements governing our active investment funds generally require the general partners of the funds to make
minimum capital commitments to such funds, which generally range from 2% to 8% of a fund's total capital commitments at
final closing, but may be greater for certain funds (i) where we are pursuing newer strategies, (ii) where third party investor
demand is limited, and (iii) where a larger commitment is consistent with the asset allocation strategy.
As of March 31, 2026, KKR had unfunded commitments consisting of $9.1 billion to its investment funds and other
investment vehicles across Private Equity, Real Assets, and Credit and Liquid Strategies business lines. These unfunded
commitments include $2.7 billion of uncalled capital commitments to certain investment vehicles in connection with
investments in the core private equity strategy. These unfunded commitments also include funding requirements to levered
investment vehicles and structured transactions to fund or otherwise be liable for a portion of the vehicle's investment losses
and/or to provide the vehicle with liquidity upon certain termination events.
In addition to these uncalled commitments and funding obligations to KKR's investment funds and investment vehicles,
KKR has entered into contractual commitments primarily with respect to underwriting transactions, debt financing, revolving
credit facilities, and equity syndications in our Capital Markets business line. As of March 31, 2026, these capital markets
commitments amounted to $0.6 billion. Whether these amounts are actually funded, in whole or in part, depends on the
contractual terms of such capital markets commitments, including the satisfaction or waiver of any conditions to closing or
funding. From time to time, we fund these various capital markets commitments noted above in our capital markets business
by drawing all or substantially all of our availability for borrowings under our available credit facilities available for our Capital
Markets business line. We generally expect these borrowings by our capital markets business to be repaid promptly as these
commitments are syndicated to third parties or otherwise fulfilled or terminated, although we may in some instances elect to
retain a portion of the commitments for our own investment. Additionally, KKR's capital markets business has arrangements
with third parties, which are expected to reduce KKR's risk under certain circumstances when underwriting certain debt
transactions. As a result, our unfunded capital markets commitments as of March 31, 2026 have been reduced to reflect the
amount expected to be funded by such third parties. As of March 31, 2026, KKR's capital markets business line has entered
into such arrangements representing a total notional amount of $5.0 billion. For more information about our Capital Markets
business line's risks, see "Risk Factors—Risks Related to Our Business—Our capital markets activities expose us to material
risks" in our Annual Report.
Tax Receivable Agreement
On May 30, 2022, KKR terminated the tax receivable agreement with KKR Holdings other than with respect to exchanges
of KKR Holdings equity completed prior to such date. As of March 31, 2026, an undiscounted payable of $335.1 million has
been recorded in due to affiliates in the financial statements representing management's best estimate of the amounts
currently expected to be owed for certain exchanges of KKR Holdings equity that took place prior to the termination of the tax
receivable agreement. As of March 31, 2026, $155.8 million of cumulative cash payments have been made under the tax
receivable agreement since inception.
Dividends and Stock Repurchases
A dividend of $0.195 per share of our common stock has been declared and will be paid on May 29, 2026 to holders of
record of our common stock as of the close of business on May 15, 2026.
A dividend of $0.78125 per share of Series D Mandatory Convertible Preferred Stock has been declared and set aside for
payment on June 1, 2026 to holders of record of Series D Mandatory Convertible Preferred Stock as of the close of business
on May 15, 2026.
When KKR & Co. Inc. receives distributions from KKR Group Partnership, holders of exchangeable securities receive their
pro rata share of such distributions from KKR Group Partnership.
The declaration and payment of dividends to our common or preferred stockholders will be at the sole discretion of our
Board of Directors, and our dividend policy may be changed at any time. We announced on February 5, 2026 that our current
dividend policy will be to pay dividends to holders of our common stock in an annual aggregate amount of $0.78 per share (or
a quarterly dividend of $0.195 per share) beginning with the dividend announced with the results for the three months ended
March 31, 2026. The declaration of dividends is subject to the discretion of our Board of Directors based on a number of
factors, including KKR’s future financial performance and other considerations that the Board of Directors deems relevant,
and compliance with the terms of KKR & Co. Inc.'s certificate of incorporation and applicable law. For U.S. federal income tax
purposes, any dividends we pay (including dividends on our preferred stock) generally will be treated as qualified dividend
income for U.S. individual stockholders to the extent paid out of our current or accumulated earnings and profits, as
determined for U.S. federal income tax purposes. There can be no assurance that future dividends will be made as intended
or at all or that any particular dividend policy for our common stock or our preferred stock will be maintained. Furthermore,
the declaration and payment of distributions by KKR Group Partnership and our other subsidiaries may also be subject to
legal, contractual and regulatory restrictions, including restrictions contained in our debt agreements.
Since 2015, KKR has repurchased, or retired equity awards representing, a total of 97.7 million shares of common stock
for $3.1 billion, which equates to an average price of $31.56 per share. As of May 1, 2026, there is approximately $122 million
remaining under KKR's share repurchase program. For further information See "Part II—Item 2—Unregistered Sales of Equity
Securities and Use of Proceeds.”
Contractual Obligations, Commitments and Contingencies
In the ordinary course of business, we and our consolidated funds and CFEs enter into contractual arrangements that may
require future cash payments. Contractual arrangements include (1) commitments to fund the purchase of investments or
other assets (including obligations to fund capital commitments as the general partner of our investment funds) or to fund
collateral for derivative transactions or otherwise, (2) obligations arising under our senior notes, subordinated notes, and
other indebtedness, (3) commitments by our capital markets business to underwrite transactions or to lend capital, (4)
obligations arising under insurance policies written, (5) other contractual obligations, including servicing agreements with
third-party administrators for insurance policy administration, and (6) commitments to fund the business, operations or
investments of our subsidiaries. In addition, we may incur contingent liabilities for claims that may be made against us in the
future. For more information about these contingent liabilities, please see Note 24 "Commitments and Contingencies" in our
financial statements.
Off Balance Sheet Arrangements
We do not have any off-balance sheet financings or liabilities other than contractual commitments and other legal
contingencies incurred in the normal course of our business.
Critical Accounting Policies and Estimates
The preparation of our financial statements in accordance with GAAP requires our management to make estimates and
judgments that affect the reported amounts of assets and liabilities, the recognition and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues, expenses, investment income (loss)
and income taxes during the reporting periods. Such estimates include but are not limited to (i) the valuation of investments
and financial instruments, (ii) the determination of the income tax provision, (iii) the impairment of goodwill and intangible
assets, (iv) the impairment of available-for-sale investments, (v) the valuation of insurance policy liabilities, including market
risk benefits, (vi) the valuation of embedded derivatives in policy liabilities and funds withheld, and (vii) the determination of
the allowance for loan losses. Our management bases these estimates and judgments on available information, historical
experience and other assumptions that we believe are reasonable under the circumstances. However, these estimates,
judgments and assumptions are often subjective and may be impacted negatively based on changing circumstances or
changes in our analyses. If actual amounts are ultimately different from those estimated, judged or assumed, revisions are
included in the financial statements in the period in which the actual amounts become known. We believe our critical
accounting policies could potentially produce materially different results if we were to change underlying estimates,
judgments or assumptions.
For a further discussion about our critical accounting policies, see Note 2 "Summary of Significant Accounting Policies" in
our financial statements included in this report.
Basis of Accounting
We consolidate the financial results of KKR Group Partnership and its consolidated entities, which include the accounts of
our investment advisers, broker-dealers, Global Atlantic’s insurance companies, the general partners of certain
unconsolidated investment funds, general partners of consolidated investment funds and their respective consolidated
investment funds, and certain other entities including CFEs.
When an entity is consolidated, we reflect the accounts of the consolidated entity, including its assets, liabilities,
revenues, expenses, investment income, cash flows, and other amounts, on a gross basis. While the consolidation of an
investment fund or entity does not have an effect on the amounts of Net Income Attributable to KKR or KKR's stockholders'
equity that KKR reports, the consolidation does significantly impact the financial statement presentation under GAAP. This is
due to the fact that the accounts of the consolidated entities are reflected on a gross basis while the allocable share of those
amounts that are attributable to third parties are reflected as single line items. The single line items in which the accounts
attributable to third parties are recorded are presented as noncontrolling interests on the consolidated statements of
financial condition and net income (loss) attributable to noncontrolling interests on the consolidated statements of
operations.
The presentations in the consolidated statement of financial condition and consolidated statement of operations reflect
the significant industry diversification of KKR by its acquisition of Global Atlantic. Global Atlantic operates an insurance
business, and KKR operates an asset management business, which manages the operations of the Strategic Holdings segment
(see Note 21 "Segment Reporting") in our financial statements included in this report, each of which possess distinct
characteristics. As a result, KKR developed a two-tiered approach for the financial statements presentation, where Global
Atlantic's insurance operations are presented separately from KKR's asset management business. KKR believes that these
separate presentations provide a more informative view of the consolidated financial position and results of operations than
traditional aggregated presentations and that reporting Global Atlantic’s insurance operations separately is appropriate given,
among other factors, the relative significance of Global Atlantic’s policy liabilities, which are not obligations of KKR (other than
the insurance companies that issued them). If a traditional aggregate presentation were to be used, KKR would expect to
eliminate or combine several identical or similar captions, which would condense the presentations, but would also reduce
the level of information presented. KKR also believes that using a traditional aggregate presentation would result in no new
line items compared to the two-tier presentation included in the financial statements in this report.
In the ordinary course of business, KKR’s Asset Management, Strategic Holdings, and Insurance businesses enter into
transactions with each other, which may include transactions pursuant to their investment management agreements and
financing arrangements. The borrowings from these financing arrangements are non-recourse to KKR beyond the assets
pledged to support such borrowings. All the investment management and financing arrangements amongst KKR’s Asset
Management, Strategic Holdings, and Insurance businesses are eliminated in consolidation.
All intercompany transactions and balances have been eliminated.
Consolidation
KKR consolidates all entities that it controls either through a majority voting interest or as the primary beneficiary of
variable interest entities (“VIEs”). The following discussion is intended to provide supplemental information about how the
application of consolidation principles impact our financial results, and management’s process for implementing those
principles including areas of significant judgment. For a detailed description of our accounting policy on consolidation, see
Note 2 "Summary of Significant Accounting Policies" in our financial statements included in this report.
As part of its consolidation procedures, KKR evaluates: (i) whether it holds a variable interest in an entity, (ii) whether the
entity is a VIE, and (iii) whether the KKR’s involvement would make it the primary beneficiary. The determination that KKR
holds a controlling financial interest in an investment vehicle significantly changes the presentation of our consolidated
financial statements.
The assessment of whether we consolidate an investment vehicle we manage requires the application of significant
judgment. These judgments are applied both at the time we become involved with an investment vehicle and on an ongoing
basis and include, but are not limited to:
- Determining whether our management fees, carried interests, or incentive fees represent variable interests - We
make judgments as to whether the fees we earn are commensurate with the level of effort required for those fees
and at market rates. In making this judgment, we consider, among other things, the extent of third party investment
in the entity and the terms of any other interests we hold in the VIE.
- Determining whether a legal entity qualifies as a VIE - For those entities where KKR holds a variable interest,
management determines whether each of these entities qualifies as a VIE and, if so, whether or not KKR is the
primary beneficiary. The assessment of whether the entity is a VIE is generally performed qualitatively, which
requires judgment. These judgments include: (i) determining whether the equity investment at risk is sufficient to
permit the entity to finance its activities without additional subordinated financial support, (ii) evaluating whether
the equity holders, as a group, can make decisions that have a significant effect on the economic performance of the
entity, (iii) determining whether two or more parties’ equity interests should be aggregated, and (iv) determining
whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to
receive returns from an entity. Entities that do not qualify as VIEs are generally assessed for consolidation as voting
interest entities. Under the voting interest entity model, KKR consolidates those entities it controls through a
majority voting interest.
- Concluding whether KKR has an obligation to absorb losses or the right to receive benefits that could potentially be
significant to the VIE - As there is no explicit threshold in GAAP to define “potentially significant,” we must apply
judgment and evaluate both quantitative and qualitative factors to conclude whether this threshold is met.
Changes to these judgments could result in a change in the consolidation conclusion for a legal entity.
Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date under current market conditions. For further information about our
fair value measurements accounting policies, please see “Note 2—Summary of Significant Accounting Policies—Fair Value
Measurements” in our Annual Report.
Level III Valuation Methodologies
Our investments and financial instruments are impacted by various economic conditions and events outside of our
control that are difficult to quantify or predict, which may have a significant impact on the valuation of our investments and,
therefore, on the carried interest and investment income we realize.
There is inherent uncertainty involved in the valuation of Level III investments, and there is no assurance that, upon
liquidation, KKR will realize the values reflected in our valuations. Our valuations may differ significantly from the values that
would have been used had an active market for the investments existed, and it is reasonably possible that the difference
could be material. See "Risk Factors" in our Annual Report and "—Business Environment" in this report for more information
on factors that may impact our business, financial performance, operating results, and valuations.
Key unobservable inputs that have a significant impact on our Level III valuations as described above are included in Note
9 "Fair Value Measurements" in our financial statements.
Across the total Level III private equity investment portfolio (including core private equity investments) held directly and
through both consolidated and unconsolidated investment vehicles in our Asset Management segment, the overall weights
ascribed to a market comparables valuation methodology, the discounted cash flow valuation methodology, and a valuation
methodology based on pending sales for this portfolio of Level III private equity investments (including core private equity
investments) were 39%, 56%, and 5%, respectively, as of March 31, 2026.
Across the total Level III real assets investment portfolio held directly and through both consolidated and unconsolidated
investment vehicles in our Asset Management segment, the overall weights ascribed to a market comparables valuation
methodology, the discounted cash flow valuation methodology, the direct income capitalization valuation methodology, and a
valuation methodology based on pending sales for this portfolio of Level III real assets investments were 3%, 88%, 2%, and
7%, respectively, as of March 31, 2026.
Level III Valuation Process
The valuation process involved for Level III measurements for our financial statements is completed on a quarterly basis
and is designed to subject the valuation of Level III investments to an appropriate level of consistency, oversight, and review.
For private equity and real asset investments classified as Level III, investment professionals prepare preliminary
valuations based on their evaluation of financial and operating data, company specific developments, market valuations of
comparable companies, and other factors. KKR begins its procedures to determine the fair values of its Level III assets
approximately one month prior to the end of a reporting period, and KKR follows additional procedures to ensure that its
determinations of fair value for its Level III assets are appropriate as of the relevant reporting date. These preliminary
valuations are generally reviewed by an independent valuation firm engaged by KKR to perform certain procedures in order to
assess the reasonableness of KKR's valuations. The valuations of certain real asset investments are determined solely by
independent valuation firms without the preparation of preliminary valuations by our investment professionals, and instead
such independent valuation firms rely on valuation information available to it as a broker or valuation firm. For credit
investments, an independent valuation firm is engaged by KKR to assist with the valuations of most investments classified as
Level III. As of March 31, 2026, less than 5% of the total value of Level III investments in aggregate across all of our segments
were not valued with the engagement of an independent valuation firm.
For Level III investments, KKR has a Global Valuation Committee that is responsible for coordinating and implementing
the firm's valuation processes to ensure consistency in the application of valuation principles across portfolio investments and
between reporting periods. The Global Valuation Committee is assisted by the asset class-specific valuation committees,
which are responsible for the review and approval of all preliminary Level III valuations in their respective asset classes at least
on a quarterly basis. The members of these valuation committees are comprised of investment professionals and
professionals from business operations functions such as legal, compliance, and finance, who are not primarily responsible for
the management of the investments. All Level III valuations for investments are also subject to approval by the Global
Valuation Committee, which is comprised of senior employees including investment professionals and professionals from
business operations functions, and includes KKR's Chief Financial Officer, Chief Legal Officer and General Counsel, and Chief
Compliance Officer. Once Level III valuations are approved by the Global Valuation Committee, a presentation of such
valuations is provided to the Audit Committee and then to the Board of Directors of KKR & Co. Inc. Level III valuations for our
insurance segment’s investments are approved by the Global Atlantic Valuation Committee prior to being presented to the
Global Valuation Committee.
As described above, Level III investments were valued using internal models with significant unobservable inputs, and our
determinations of the fair values of these investments may differ materially from the values that would have resulted if
readily observable inputs had existed. Additional external factors may cause those values, and the values of investments for
which readily observable inputs exist, to increase or decrease over time, which may create volatility in our earnings and the
amounts of assets and stockholders' equity that we report from time to time.
Changes in the fair value of investments impacts the amount of carried interest that is recognized as well as the amount
of investment income that is recognized for investments across our business segments and through our consolidated funds as
described below. We estimate that an immediate 10% decrease in the fair value of investments held directly and through
consolidated investment funds generally would result in a commensurate change in the amount of net gains (losses) from
investment activities for investments held directly and through investment funds and a more significant impact to the amount
of carried interest recognized, regardless of whether the investment was valued using observable market prices or
management estimates with significant unobservable pricing inputs. With respect to consolidated investment funds, the
impact that the consequential decrease in investment income would have on net income attributable to KKR would generally
be significantly less than the amount described above, given that a majority of the change in fair value of our consolidated
funds would be attributable to noncontrolling interests and therefore we are only impacted to the extent of our carried
interest and our ownership in the consolidated investment funds and investment vehicles.
As of March 31, 2026, upon completion by, where applicable, independent valuation firms of certain limited procedures
requested to be performed by them on certain Level III investments, the independent valuation firms concluded that the fair
values, as determined by KKR (including Global Atlantic), of those investments reviewed by them were reasonable. The limited
procedures did not involve an audit, review, compilation or any other form of examination or attestation under generally
accepted auditing standards and were not conducted on all Level III investments. We are responsible for determining the fair
value of investments in good faith, and the limited procedures performed by an independent valuation firm are
supplementary to the inquiries and procedures that we are required to undertake to determine the fair value of the
commensurate investments on a GAAP basis.
As of March 31, 2026, there were no investments across business segments which represented greater than 5% of total
investments on a GAAP basis. Our investment income on a GAAP and segment basis can be impacted by volatility in the public
markets. See "Risk Factors" in our Annual Report and "—Business Environment" in this report for a discussion of factors that
may impact the valuations of our investments, financial results, operating results, and valuations, and "—Segment Balance
Sheet Measures" for additional information regarding our largest holdings on a segment basis.
Business Combinations
KKR accounts for business combinations using the acquisition method of accounting, under which the purchase price of
the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as
of the acquisition date.
Management’s determination of fair value of assets acquired and liabilities assumed at the acquisition date is based on
the best information available in the circumstances and may incorporate management’s own assumptions and involve a
significant degree of judgment. We use our best estimates and assumptions to accurately assign fair value to the tangible and
identifiable intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of those
acquired intangible assets. Examples of critical estimates in valuing certain of the intangible assets we have acquired include,
but are not limited to, future expected cash inflows and outflows, future fundraising assumptions, expected useful life,
discount rates, and income tax rates. Our estimates for future cash flows are based on historical data, various internal
estimates and certain external sources, and are based on assumptions that are consistent with the plans and estimates we are
using to manage the underlying assets acquired. We estimate the useful lives of the intangible assets based on the expected
period over which we anticipate generating economic benefit from the asset. We base our estimates on assumptions we
believe to be reasonable but that are unpredictable and inherently uncertain. Unanticipated events and circumstances may
occur that could affect the accuracy or validity of such assumptions, estimates or actual result.
Income Taxes
Significant judgment is required in estimating the provision for (benefit from) income taxes, current and deferred tax
balances (including valuation allowance), accrued interest or penalties, and uncertain tax positions. In evaluating these
judgments, we consider, among other items, projections of taxable income (including the character of such income),
beginning with historic results and incorporating assumptions of the amount of future pre-tax operating income. These
assumptions about future taxable income require significant judgment and are consistent with the plans and estimates that
KKR uses to manage its business. Revisions in estimates or actual costs of a tax assessment may ultimately be materially
different from the recorded accruals and unrecognized tax benefits, if any. Please see Note 18 "Income Taxes" in our financial
statements in this report for further details.
Critical Accounting Policies and Estimates – Asset Management and Strategic Holdings
Revenues
Fees and Other
Fees and other consist primarily of (i) management and incentive fees from providing investment management services
to unconsolidated funds, CLOs, other investment vehicles, and separately managed accounts; (ii) transaction fees earned in
connection with successful investment transactions and from capital markets activities; (iii) monitoring fees from providing
services to portfolio companies; (iv) expense reimbursements from certain investment funds and portfolio companies; and
(v) consulting fees. These fees are based on the contractual terms of the governing agreements and are recognized when
earned, which coincides with the period during which the related services are performed and in the case of transaction fees,
upon closing of the transaction. Monitoring fees may provide for a termination payment following an initial public offering or
change of control. These termination payments are recognized in the period when the related transaction closes.
Transaction fee calculations and management fee calculations based on committed capital or invested capital typically do
not require discretion and therefore do not require the use of significant estimates or judgments. Management fee
calculations based on net asset value depend on the fair value of the underlying investments within the investment vehicles.
Estimates and assumptions are made when determining the fair value of the underlying investments within the funds and
could vary depending on the valuation methodology that is used as well as economic conditions.
Capital Allocation-Based Income (Loss)
Capital allocation-based income (loss) is earned from those arrangements whereby KKR serves as general partner and
includes income or loss from KKR's capital interest as well as "carried interest" which entitles KKR to a disproportionate
allocation of investment income or loss from an investment fund's limited partners.
Carried interest is recognized upon appreciation of the funds’ investment values above certain return hurdles set forth in
their partnership agreement. KKR recognizes revenues attributable to capital allocation-based income based upon the amount
that would be due pursuant to the fund partnership agreement at each period end as if the funds were terminated at that
date. Accordingly, the amount recognized reflects KKR’s share of the gains and losses of the associated funds’ underlying
investments measured at their then-current fair values relative to the fair values as of the end of the prior period. Because of
the inherent uncertainty in measuring the fair value of investments in the absence of observable market prices as previously
discussed, these estimated values may differ significantly from the values that would have been used had a ready market for
the investments existed, and it is reasonably possible that the difference could be material.
Expenses
Compensation and Benefits
Compensation and Benefits expense includes (i) base cash compensation consisting of salaries and wages, (ii) benefits,
(iii) carry pool allocations, (iv) equity-based compensation, and (v) discretionary cash bonuses.
Discretionary Cash Bonus
To supplement base cash compensation, benefits, carry pool allocations, and equity-based compensation, we typically
pay discretionary cash bonuses, which are included in Compensation and Benefits expense in the consolidated statements of
operations, based principally on the level of (i) management fees and other fee related revenues (including incentive fees), (ii)
realized performance income, which includes realized carried interest, and (iii) realized investment income earned during the
year. The amounts paid as discretionary cash bonuses, if any, are at our sole discretion and vary from individual to individual
and from period to period, including having no cash bonus. We accrue discretionary cash bonuses when payment becomes
probable and reasonably estimable which is generally in the period when we make the decision to pay discretionary cash
bonuses and is based upon a number of factors, including the recognition of asset management segment revenues, and other
factors determined during the year.
We expect to pay our employees by assigning a percentage range to each component of asset management segment
revenues. We expect to use approximately: (i) 15%-20% of fee related revenues, (ii) 70%-80% of realized carried interest and
incentive fees not included in fee related performance revenues or earned from our hedge fund partnerships, and (iii)
10%-20% of realized investment income and hedge fund partnership incentive fees, to pay our asset management employees.
Because these ranges are applied to applicable asset management segment revenue components independently, and on an
annual basis, the amount paid as a percentage of total asset management segment revenue will vary and will, for example,
likely be higher in a period with relatively higher realized carried interest and lower in a period with relatively lower realized
carried interest. We decide whether to pay a discretionary cash bonus and determine the percentage of applicable revenue
components to pay compensation only upon the occurrence of the realization event. There is no contractual or other binding
obligation that requires us to pay a discretionary cash bonus to the asset management employees, except in limited
circumstances.
Carry Pool Allocation
With respect to our funds that provide for carried interest, we allocate a portion of the realized and unrealized carried
interest that we earn to Associates Holdings, which we refer to as the carry pool, from which our asset management
employees and certain other carry pool participants are eligible to receive a carried interest allocation. The allocation is
determined based upon a fixed arrangement between Associates Holdings and us, and we do not exercise discretion on
whether to make an allocation to the carry pool upon a realization event. We refer to the portion of carried interest that we
allocate to the carry pool as the carry pool percentage.
Effective January 2, 2024, KKR applies a carry pool percentage of up to 80% for all funds, which is a carry pool percentage
in excess of the carry pool percentages previously fixed by investment fund as discussed further below, which depended on
the fund’s vintage. This increase to the carry pool percentage was approved by a majority of KKR's independent directors, and
the carry pool percentage may not be increased above 80% without the further approval of a majority of KKR's independent
directors. For funds that closed after December 31, 2023, the carry pool percentage is fixed at 80%. For funds that closed prior
to December 31, 2023, the carry pool percentage is calculated at a fixed percentage of 40%, 43%, or 65% (depending on the
fund’s vintage) for carried interest realized up to a high water mark, which was established based on the unrealized carried
interest balance that existed on January 2, 2024, plus an additional percentage amount up to 80% based on a formulaic
allocation, only if the unrealized carried interest balance at any period end exceeds the high water mark. This imposes a
limitation of the carry pool allocation for such funds based on the amount of cumulative unrealized carried interest income
earned subsequent to December 31, 2023.
For funds that closed before December 31, 2023, if the cumulative carried interest subsequent to December 31, 2023 is
not sufficient to fund this formulaic allocation, the allocation of earnings reverts to the carry pool percentage in effect before
this modification. As such, upon modification of the carry pool percentage effective on January 2, 2024, the cumulative
unrealized carried interest was not sufficient to fund the additional formulaic allocation percentage in excess of the pre-
existing 40%, 43%, and 65% carry pool percentages, and therefore no incremental expense was recognized as of such date.
The carry pool percentage applicable for all funds that closed prior to December 31, 2023 will not be less than their applicable
carry pool percentages of 40%, 43%, or 65% prior to December 31, 2023 (for funds that closed after December 31, 2020 but
before December 31, 2023, the carry pool percentage was fixed at 65%; for funds that closed after June 30, 2017 but before
December 31, 2020, the carry pool percentage was fixed at 43%; and the carry pool percentage was fixed at 40% for older
funds that contributed to KKR's carry pool), and will not be more than 80%. The intent of this modification is that for all funds
that closed prior to January 2, 2024, upon the final liquidation of each fund, realized carried interest distributed will equal the
historical fund carry pool allocations up to the high water mark and only distributions of realized carried interest in excess of
the high water mark will be distributed at 80 percent if and only if the unrealized carried interest balance at any period end
exceeds the high water mark. Under no circumstance would a distribution of carried interest exceed 80% of the total allocable
carried interest at any time.
KKR accounts for the carry pool as a compensatory profit-sharing arrangement in Accrued Expenses and Other Liabilities
within the accompanying consolidated statements of financial condition in conjunction with the related carried interest
income and it is recorded as compensation expense. The liability that is recorded in each period reflects the legal entitlement
of Associates Holdings at each point in time should the total unrealized carried interest be realized at the value recorded at
each reporting date. Upon a reversal of carried interest income, the related carry pool allocation, if any, is also reversed.
Accordingly, such compensation expense is subject to both positive and negative adjustments.
On the Sunset Date (which will not be later than December 31, 2026), KKR will acquire control of Associates Holdings and
will commence making decisions regarding the allocation of the carry proceeds pursuant to the limited partnership agreement
of Associates Holdings. Until the Sunset Date, our Co-Founders will continue to make decisions regarding the allocation of the
carry proceeds to themselves and others, pursuant to the limited partnership agreement of Associates Holdings, provided that
any allocation of carry proceeds to the Co-Founders will be on a percentage basis consistent with past practice. For additional
information about the Sunset Date and the Reorganization Agreement, see Note 1 "Organization" in our financial statements
included in this report.
Equity-based Compensation
In addition to the cash-based compensation and carry pool allocations as described above, employees receive equity
awards under our Equity Incentive Plan, most of which are subject to service-based vesting typically over a three to five-year
period from the date of grant, and some of which are also subject to the achievement of market-based conditions. Certain of
these awards are subject to post-vesting transfer restrictions and minimum retained ownership requirements.
Compensation expense relating to the issuance of equity-based awards is measured at fair value on the grant date. In
determining the aggregate fair value of any award grants, we make judgments as to the grant-date fair value, particularly for
certain equity awards with a vesting condition based upon market conditions, whose grant date fair values are based on a
probability distributed Monte-Carlo simulation. See Note 19 "Equity-based Compensation,” in our financial statements
included in this report for further discussion and activity of these awards.
Investment Income (Loss) – Net Gains (Losses) from Investment Activities
Net gains (losses) from investment activities consist of realized and unrealized gains and losses arising from our
investment activities as well as income earned from certain equity method investments. Fluctuations in net gains (losses) from
investment activities between reporting periods is driven primarily by changes in the fair value of our investment portfolio as
well as the realization of investments. The fair value of, as well as the ability to recognize gains from, our investments is
significantly impacted by the global financial markets, which, in turn, affects the net gains (losses) from investment activities
recognized in any given period. Upon the disposition of an investment, previously recognized unrealized gains and losses are
reversed and an offsetting realized gain or loss is recognized in the current period. Since our investments are carried at fair
value, fluctuations between periods could be significant due to changes to the inputs to our valuation process over time. For a
further discussion of our fair value measurements and fair value of investments, see above "—Critical Accounting Policies and
Estimates—Fair Value Measurements."
Critical Accounting Policies and Estimates – Insurance
Policy liabilities, or colloquially, “reserves,” are the portion of past premiums or assessments received that are set aside
to meet future policy and contract obligations as they become due. Interest accrues on the reserves and on future premiums,
which may also be available to pay for future obligations. Global Atlantic establishes reserves to pay future policy benefits,
claims, and certain expenses for its life policies and annuity contracts.
Global Atlantic’s reserves are estimated based on models that include many actuarial assumptions and projections. These
assumptions and projections, which are inherently uncertain, involve significant judgment, including assumptions as to the
levels and/or timing of premiums, benefits, claims, expenses, interest credits, investment results (including equity market
returns), mortality, longevity, and persistency.
The assumptions on which reserves are based are intended to represent an estimation of experience for the period that
policy benefits are payable. Global Atlantic reviews the adequacy of its reserves and the assumptions underlying those
reserves at least annually. Global Atlantic cannot, however, determine with precision the amount or the timing of actual
benefit payments. If actual experience is better than or equal to the assumptions, then reserves would be adequate to
provide for future benefits and expenses. If experience is worse than the assumptions, additional reserves may be required to
meet future policy and contract obligations. This would result in a charge to Global Atlantic's net income during the period in
which excess benefits are paid or an increase in reserves occurs.
For a majority of Global Atlantic’s in-force policies, including its interest-sensitive life policies and most annuity contracts,
the base policy reserve is equal to the account value. For these products, the account value represents Global Atlantic’s
obligation to repay to the policyholder the amounts held with Global Atlantic on deposit. However, there are several
significant blocks of business where policy reserves, in addition to the account value, are explicitly calculated, including
variable annuities, fixed-indexed annuities, interest-sensitive life products (including those with secondary guarantees), and
preneed policies.
Market Risk Benefits
Market risk benefits are contracts or contract features that both provide protection to the policyholder from other-than-
nominal capital market risk and expose Global Atlantic to other-than-nominal capital market risk. Market risk benefits include
certain contract features on fixed annuity and variable annuity products, including minimum guarantees to policyholders,
such as guaranteed minimum death benefits ("GMDBs"), guaranteed minimum withdrawal benefits ("GMWBs"), and long-
term care benefits (which are capped at the return of account value plus one or two times the account value).
Some of Global Atlantic's variable annuity and fixed-indexed annuity contracts contain a GMDB feature that provides a
guarantee that the benefit received at death will be no less than a prescribed minimum amount, even if the account balance
is reduced to zero. This amount is based on either the net deposits paid into the contract, the net deposits accumulated at a
specified rate, the highest historical account value on a contract anniversary, or sometimes a combination of these values. If
the GMDB is higher than the current account value at the time of death, Global Atlantic incurs a cost equal to the difference.
Global Atlantic issues fixed-indexed annuity and variable annuity contracts with a guaranteed minimum withdrawal
feature. GMWB are an optional benefit where the contract owner is entitled to withdraw a maximum amount of their benefit
base each year.
Once exercised, living benefit features provide annuity policyholders with a minimum guaranteed stream of income for
life. A policyholder’s annual income benefit is generally based on an annual withdrawal percentage multiplied by the benefit
base. The benefit base is defined in the policy and is generally the initial premium, reduced by any partial withdrawals and
increased by a defined percentage, formula, or index credits. Any living benefit payments are first deducted from the account
value. Global Atlantic is responsible for paying any excess guaranteed living benefits still owed after the account value has
reached zero.
The ultimate cost of these benefits will depend on the level of market returns and the level of contractual guarantees, as
well as policyholder behavior, including surrenders, withdrawals, and benefit utilization. For Global Atlantic's fixed-indexed
annuity products, costs also include certain non-guaranteed terms that impact the ultimate cost, such as caps on crediting
rates that Global Atlantic can, in its discretion, reset annually.
See Note 17 “Policy Liabilities” in our financial statements for additional information.
As of March 31, 2026, the net market risk liability balance totaled $1.4 billion. As of March 31, 2026, the liability balances
for market risk benefits were $1.2 billion for fixed-indexed annuities and $222.8 million for variable and other annuities. The
increase (decrease) to the net market risk benefit liability balance as a result of hypothetical changes in interest rates,
instrument-specific credit risk, equity market prices, expected mortality, and expected surrenders are summarized in the table
below. This sensitivity considers the direct effect of such changes only and not changes in any other assumptions used in or
items considered in the measurement of such balances.
| As of March 31, 2026 | ||||
| ($ in thousands) | Fixed-Indexed Annuity | Other | ||
| Balance | $1,159,749 | $222,803 | ||
| Hypothetical Change: | ||||
| +50 bps Interest Rates | (154,125) | (35,341) | ||
| -50 bps Interest Rates | 171,258 | 38,991 | ||
| +50 bps Instrument-specific Credit Risk | (155,321) | (18,863) | ||
| -50 bps Instrument-specific Credit Risk | 171,746 | 20,496 | ||
| +10% Equity Market Prices | (73,824) | (32,485) | ||
| -10% Equity Market Prices | 52,339 | 35,574 | ||
| 95% of Expected Mortality | 63,458 | 4,086 | ||
| 105% of Expected Mortality | (59,687) | (3,546) | ||
| 90% of Expected Surrenders | 31,453 | 1,437 | ||
| 110% of Expected Surrenders | (29,977) | (1,414) |
Note: Hypothetical changes to the market risk benefits liability balance do not reflect the impact of related hedges.
Policy Liabilities Accounted for Under a Fair Value Option
Variable annuity contracts offered and assumed by Global Atlantic provide the contractholder with a GMDB. The liabilities
for these benefits are included in policy liabilities. Global Atlantic elected the fair value option to measure the liability for
certain of these variable annuity contracts valued at $254.1 million as of March 31, 2026. Fair value is calculated as the
present value of the estimated death benefits less the present value of the GMDB fees, using 1,000 risk neutral scenarios.
Global Atlantic discounts the cash flows using the U.S. Treasury rates plus an adjustment for instrument-specific credit risk in
the consolidated statement of financial condition. The change in the liabilities for these benefits is included in policy benefits
and claims in the consolidated statement of operations.
As of March 31, 2026, variable annuities accounted for using the fair value option totaled $254.1 million. The increase
(decrease) in the reserves for variable annuities accounted for using the fair value option as a result of hypothetical changes in
interest rates, instrument-specific credit risk, equity market prices, expected mortality, and expected surrenders are
summarized in the table below. This sensitivity considers the direct effect of such changes only and not changes in any other
assumptions used in or items considered in the measurement of such balances.
| As of March 31, 2026 | ||
| ($ in thousands) | Variable Annuities | |
| Balance | $254,107 | |
| Hypothetical Change: | ||
| +50 bps Interest Rates | (16,475) | |
| -50 bps Interest Rates | 17,810 | |
| +50 bps Instrument-specific Credit Risk | (10,032) | |
| -50 bps Instrument-specific Credit Risk | 10,379 | |
| +10% Equity Market Prices | (13,470) | |
| -10% Equity Market Prices | 16,044 | |
| 95% of Expected Mortality | (4,695) | |
| 105% of Expected Mortality | 4,494 | |
| 90% of Expected Surrenders | 105 | |
| 110% of Expected Surrenders | (131) |
Note: Hypothetical changes to the liability balances do not reflect the impact of related hedges.
Liability for Future Policyholder Benefits
A liability for future policy benefits, which is the present value of estimated future policy benefits to be paid to or on
behalf of policyholders and certain related expenses less the present value of estimated future net premiums to be collected
from policyholders, is accrued as premium revenue is recognized. The liability is estimated using current assumptions that
include mortality, morbidity, lapses, and expenses. These current assumptions are based on judgments that consider Global
Atlantic’s historical experience, industry data, and other factors, and are updated quarterly and the current period change in
the liability is recognized as a separate component of benefit expense in the consolidated income statement.
As of March 31, 2026, the liability for future policy benefits totaled $14.2 billion, net of reinsurance, split between $12.5
billion associated with payout annuity products, and $1.7 billion of life and other insurance products (including assumed long-
term care insurance where Global Atlantic retroceded mortality and morbidity risks to a third-party reinsurer). The increase
(decrease) as a result of hypothetical changes in interest rates, credit spreads, expected mortality, and expected surrenders
and lapses are summarized in the table below. This sensitivity considers the direct effect of such changes only and not
changes in any other assumptions used in or items considered in the measurement of such balances.
| As of March 31, 2026 | ||||
| ($ in thousands) | Payout Annuities | Other | ||
| Balance | $12,523,843 | $1,683,664 | ||
| Hypothetical Change: | ||||
| +50 bps Interest Rates | (217,890) | (470,702) | ||
| -50 bps Interest Rates | 233,752 | 507,260 | ||
| +50 bps Credit Spreads | (165,764) | (356,480) | ||
| -50 bps Credit Spreads | 171,753 | 370,947 | ||
| 95% of Expected Mortality(1) | 77,728 | 40,664 | ||
| 105% of Expected Mortality(1) | (73,821) | (38,668) | ||
| 90% of Expected Surrenders/Lapses | — | (10,910) | ||
| 110% of Expected Surrenders/Lapses | — | 9,935 |
Note: Hypothetical changes to the liability for future policy benefits balance do not reflect the impact of related hedges.
(1)Includes decrements for terminations of disability insurance.
Additional Liability for Annuitization, Death, or Other Insurance Benefits: No-Lapse Guarantees
Global Atlantic has in-force interest-sensitive life contracts where it provides a secondary guarantee to the policyholder.
The policy can remain in-force, even if the base policy account value is zero, as long as contractual secondary guarantee
requirements have been met. The primary risk to Global Atlantic is that the premium collected under these policies, together
with the investment return Global Atlantic earns on that premium, is ultimately insufficient to pay the policyholder’s benefits
and the expenses associated with issuing and administering these policies. Global Atlantic holds an additional reserve in
connection with these guarantees.
The additional reserves related to interest-sensitive life products with secondary guarantees are calculated using
methods similar to those described above under “—Critical Accounting Policies and Estimates – Insurance—Policy Liabilities—
Market Risk Benefits.” The costs related to these secondary guarantees are recognized over the life of the contracts through
the accrual and subsequent release of a reserve which is revalued each period. The reserve is calculated based on
assessments, over a range of economic scenarios to incorporate the variability in the obligation that may occur under
different environments. The change in the reserve is included in policy benefits and claims in the consolidated statements of
operations.
As of March 31, 2026, the additional liability balance of primarily interest-sensitive life totaled $6.2 billion, net of
reinsurance. The increase (decrease) to the additional liability balance, as a result of hypothetical changes in interest rates,
equity market prices, annual equity growth, expected mortality, and expected surrenders are summarized in the table below.
This sensitivity considers the direct effect of such changes only and not changes in any other assumptions used in or items
considered in the measurement of the interest-sensitive life no-lapse guarantee liability balance.
| As of March 31, 2026 | ||
| ($ in thousands) | Interest-Sensitive Life | |
| Balance | $6,225,044 | |
| Hypothetical Change: | ||
| +50 bps Interest Rates | 1,728 | |
| -50 bps Interest Rates | (1,742) | |
| +10% Equity Market Prices | (1,315) | |
| -10% Equity Market Prices | 635 | |
| 1% Lower Annual Equity Growth | 7,196 | |
| 95% of Expected Mortality | (53,273) | |
| 105% of Expected Mortality | 52,461 | |
| 90% of Expected Surrenders | 23,413 | |
| 110% of Expected Surrenders | (22,919) |
Note: Hypothetical changes to the interest-sensitive life additional liability for annuitization, death, or other insurance benefits balance do not reflect the
impact of related hedges.
Embedded Derivatives in Policy Liabilities and Funds Withheld
Global Atlantic's fixed-indexed annuity, variable annuity, and indexed universal life products contain equity-indexed
features, which are considered embedded derivatives and are required to be measured at fair value.
Global Atlantic calculates the embedded derivative as the present value of future projected benefits in excess of the
projected guaranteed benefits, using an option budget as the indexed account value growth rate. In addition, the fair value of
the embedded derivative is reduced to reflect instrument specific credit risk on Global Atlantic's obligation (that is, Global
Atlantic's own credit risk).
Changes in interest rates, future index credits, instrument-specific credit risk, projected withdrawal and surrender
activity, and mortality on fixed-indexed annuity and interest-sensitive life products can have a significant impact on the value
of the embedded derivative.
Valuation of Embedded Derivatives – Fixed-Indexed Annuities
Fixed-indexed annuity contracts allow the policyholder to elect a fixed interest rate of return or a market indexed strategy
where interest credited is based on the performance of an index, such as the S&P 500 Index, or other indexes. The market
indexed strategy is an embedded derivative, similar to a call option. The fair value of the embedded derivative is computed as
the present value of benefits attributable to the excess of the projected policy contract values over the projected minimum
guaranteed contract values. The projections of policy contract values are based on assumptions for future policy growth,
which include assumptions for expected index credits, future equity option costs, volatility, interest rates, and policyholder
behavior. The projections of minimum guaranteed contract values include the same assumptions for policyholder behavior as
are used to project policy contract values. The embedded derivative cash flows are discounted using a risk-free interest rate
increased by instrument-specific credit risk tied to Global Atlantic's own credit rating.
Valuation of Embedded Derivatives – Interest-Sensitive Life Products
Interest-sensitive life products allow a policyholder’s account value to grow based on the performance of certain equity
indexes, which results in an embedded derivative similar to a call option. The embedded derivative related to the index is
bifurcated from the host contract and measured at fair value. The valuation of the embedded derivative is the present value
of future projected benefits in excess of the projected guaranteed benefits, using the option budget as the indexed account
value growth rate and the guaranteed interest rate as the guaranteed account value growth rate. Present values are based on
discount rate curves determined at the valuation date or issue date as well as assumed lapse and mortality rates. The discount
rate equals the forecast treasury rate increased by instrument-specific credit risk tied to Global Atlantic’s own credit rating.
Changes in discount rates and other assumptions such as spreads and/or option budgets can have a substantial impact on the
embedded derivative.
Valuation of Embedded Derivatives in Modified Coinsurance or Funds Withheld
Global Atlantic's reinsurance agreements include modified coinsurance and coinsurance with funds withheld
arrangements that include terms that require payment by the ceding company of a principal amount plus a return that is
based on a proportion of the ceding company’s return on a designated portfolio of assets. Because the return on the funds
withheld receivable or payable is not clearly and closely related to the host insurance contract, these contracts are deemed to
contain embedded derivatives, which are measured at fair value. Global Atlantic is exposed to both the interest rate and
credit risk of the assets. Changes in discount rates and other assumptions can have a significant impact on this embedded
derivative. The fair value of the embedded derivatives is included in the funds withheld receivable at interest and funds
withheld payable at interest line items on our consolidated statement of financial condition. The change in the fair value of
the embedded derivatives is recorded in net investment-related gains (losses) in the consolidated statement of operations.
As of March 31, 2026, the embedded derivative liability balance totaled $7.0 billion for fixed-indexed annuities, and
$434.6 million for interest-sensitive life. The increase (decrease) to the embedded derivatives on fixed-indexed annuity and
indexed universal life as a result of hypothetical changes in interest rates, credit spreads, and equity market prices are
summarized in the table below. This sensitivity considers the direct effect of such changes only and not changes in any other
assumptions used in or items considered in the measurement of such balances.
| As of March 31, 2026 | ||||
| ($ in thousands) | Fixed-Indexed Annuities | Interest Sensitive Life | ||
| Balance | $7,037,204 | $434,567 | ||
| Hypothetical Change: | ||||
| +50 bps Interest Rates | (106,516) | (4,695) | ||
| -50 bps Interest Rates | 111,831 | 4,889 | ||
| +50 bps Credit Spreads | (136,153) | (4,695) | ||
| -50 bps Credit Spreads | 141,010 | 4,889 | ||
| +10% Equity Market Prices | 781,693 | 36,893 | ||
| -10% Equity Market Prices | (718,536) | (63,296) |
Note: Hypothetical changes to the market risk benefits liability balance do not reflect the impact of related hedges.
As of March 31, 2026, the embedded derivative balance for modified coinsurance or funds withheld arrangements was a
$2.6 billion net asset ($60.0 million in funds withheld receivables at interest, and $(2.6) billion in funds withheld payable at
interest). The increase (decrease) to the embedded derivatives on fixed-indexed annuity and interest-sensitive life products as
a result of hypothetical changes in interest rates and investment credit spreads are summarized in the table below. This
sensitivity considers the direct effect of such changes only and not changes in any other assumptions used in or items
considered in the measurement of such balances.
| As of March 31, 2026 | ||||
| ($ in thousands) | Embedded Derivative on Funds Withheld Receivable | Embedded Derivative on Funds Withheld Payable | ||
| Balance | $60,028 | $(2,555,171) | ||
| Hypothetical Change: | ||||
| +50 bps Interest Rates | (4,152) | (1,434,048) | ||
| -50 bps Interest Rates | 9,127 | 1,519,163 | ||
| +50 bps Investment Credit Spreads | (42,276) | (1,495,984) | ||
| -50 bps Investment Credit Spreads | 42,276 | 1,581,099 |
Note: Hypothetical changes to the funds withheld receivable and payable embedded derivative balances do not reflect the impact of related hedges or trading
assets which back the funds withheld at interest.
Recently Issued Accounting Pronouncements
For a full discussion of recently issued accounting pronouncements, see Note 2 "Summary of Significant Accounting
Policies" in our financial statements included in this report.
Previous: Item 1. FINANCIAL STATEMENTS · Next: Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.