KKR & Co. (KKR) risk factors: FY2025 10-K

1. Difficult market and economic conditions can, and periodically do, materially and adversely affect KKR.
2. Global, regional and local events outside of our control, including geopolitical events and natural disasters, could materially and adversely impact KKR.reworded
3. The loss of key personnel or their services, or any misconduct by key personnel, could have a material adverse effect on KKR.new
4. Our reliance on third parties in the operation of our business exposes us to operational, reputational and other risks.new
5. Disruptions in our technology infrastructure or the occurrence of other operational errors could materially and adversely affect our business.new
6. The failure to effectively manage our balance sheet could materially and adversely affect our financial condition and results of operations.new
7. The failure to manage, or the inability to access, adequate sources of liquidity could materially and adversely affect KKR.new
8. Our capital markets activities expose us to material risks.
9. The failure to manage our financial and enterprise risks could materially and adversely affect our financial condition and results of operation.new
10. We may suffer material harm as a result of legal claims, litigations, investigations, and negative publicity.reworded
11. We may pursue new business opportunities, strategic initiatives, or investment opportunities that involve new or unique business, regulatory or other complexities and risks.new
12. We operate in a highly competitive industry.new
13. Parts of our earnings and cash flow are highly variable due to the nature of our business.reworded
14. The agreements governing our carry-paying funds have in the past and may in the future give rise to a contingent obligation that requires us to return or contribute significant cash amounts to our funds and fund investors.reworded
15. The inability to raise capital from third-party investors for our investment vehicles, insurance business and transactions could materially and adversely affect us.new
16. The ability to raise capital from institutional investors is critical and may be adversely affected by factors beyond our control.new
17. regulatory requirements and other risks.new
18. The portion of our AUM we refer to as perpetual capital is not permanent and is subject to change.new
19. The actions of our portfolio companies may subject us to potential liabilities and cause us reputational harm.new
20. Changes in tax laws or an adverse interpretation by tax authorities may adversely impact our effective tax rate and tax liability.reworded
21. Artificial intelligence may increase competitive, operational, legal and regulatory risks to our businesses in ways that we cannot predict.rewordedAI
22. Cybersecurity failures and data security breaches could have a material adverse impact on our businesses.rewordedCybersecurity
23. We are subject to focus by certain stakeholders on sustainability matters.new

Read these in Item 1A · See the changes

1. Our business is subject to complex, extensive and evolving laws, and the failure to comply with applicable laws may materially and adversely affect us.new
2. litigation, reputational harm and other material and adverse impacts to our business.new
3. The suspension, revocation, or limitation of our regulatory registrations or licenses may materially adversely affect our business.new
4. Changes in the regulatory framework applicable to our business, including the loss of exemptions or the application of enhanced group-level regulation, may materially adversely affect us.new
5. If regulatory exemptions or exclusions on which we rely become unavailable, we may become subject to additional restrictive and costly regulatory requirements, regulatory action or liability.new
6. litigation, and reputational risks, which may materially adversely affect our business.new
7. Regulations impacting the insurance industry and insurance companies owned by alternative asset managers may adversely affect our business.new
8. We are subject to substantial regulatory risks due to our extensive and global investment activities.new
9. Various investment-related and competition laws may limit our investment opportunities and subject us to adverse regulatory consequences.new
10. Financial crime laws may limit our investment and capital raising activities and subject us to adverse regulatory consequences.new
11. Our investment vehicles and insurance subsidiaries could become subject to the fiduciary responsibility and prohibited transaction provisions of ERISA and Section 4975 of the Code, which would adversely affect our businesses.new
12. Sustainability-related laws and disclosure requirements may increase compliance costs and subject us to enforcement risks and reputational risks.new
13. Privacy, data protection, cybersecurity and artificial intelligence laws may increase compliance costs and subject us to enforcement risks and reputational risks.newAICybersecurity

Read these in Item 1A · See the changes

1. Future results of our investments may be different than, and may not achieve the levels of, any of our historical returns.
2. 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.reworded
3. Many of our investments are illiquid, and it may not be possible to realize any profits from them for a considerable period of time or at all.reworded
4. The valuations of illiquid investments are subjective and uncertain, and any realizations of our illiquid investments may occur at prices which differ from their carrying values.new
5. We often pursue investment opportunities that involve unique business, regulatory, legal, tax or other complexities that entail significant risks.new
6. We use a significant amount of leverage in our investment activities, and our portfolio companies and investments may have significant credit and liquidity requirements, which may be materially and adversely affected by changes in financial markets.new
7. The due diligence process that we undertake in connection with our investments may not reveal all facts that may be relevant in connection with an investment.
8. Investments in real assets may expose us and our investment vehicles to greater risks, liabilities and operational complexities than investments in operating companies.new
9. We make investments outside of the United States, which may expose us to additional risks, or materially exacerbate risks, that are not typically associated with investing in the United States.reworded
10. If we fail to effectively manage conflicts of interest that arise from our investment activities, our reputation, business or financial results could be materially and adversely impacted or we may become subject to regulatory scrutiny or litigation.new
11. If our third-party investors fail to fund their capital calls when requested by us, it may materially and adversely affect us.new

Read these in Item 1A · See the changes

1. We operate in a highly competitive industry.new
2. We may not be able to identify or manage significant growth opportunities for our insurance business.new
3. The ability to source successful reinsurance opportunities is not guaranteed.new
4. Volatile market and economic conditions, including sustained increases or decreases in interest rates and other interest rate fluctuations, may adversely affect our insurance business.rewordedInterest rates
5. The disruption of our third-party distribution network may have a material adverse effect on us.new
6. If the assumptions and estimates used for our insurance business differ significantly from our actual results, we may experience significant losses.new
7. If the ratings of our insurance subsidiaries are downgraded, it may materially and adversely affect our ability to sell our products, conduct our business, raise equity or issue debt.new
8. Our insurance business faces risks associated with business we cede to other reinsurers as well as business ceded to us.new
9. Changes in tax laws or an adverse interpretation by tax authorities may adversely impact our insurance business.reworded
10. Our insurance business is heavily regulated, and such regulations may have a material and adverse effect on our business, financial condition and results of operations.new
11. Our insurance business may become subject to additional regulations, which may have material and adverse impact on our business, financial condition and results of operations.new
12. Insurance regulations are subject to change, and such changes may have a material and adverse impact on our business, financial condition and results of operations.new
13. and any changes to them may have a material and adverse impact on our business, financial condition and results of operations.new
14. Our Bermuda insurance business is subject to additional regulatory and reputational considerations, which if we do not properly manage may have a material and adverse impact on our business, financial condition and results of operations.new
15. it may result in a material adverse impact on our insurance subsidiaries’ capital positions or require increasing prices or reducing sales of certain insurance products.new

Read these in Item 1A · See the changes

1. Until the Sunset Date, the Series I preferred stockholder’s significant voting power limits the ability of holders of our common stock to influence our business, and conflicts of interest may arise among thereworded
2. Series I preferred stockholder and the holders of our common stock.new
3. As a “controlled company,” we qualify for some exemptions from the corporate governance and other requirements of the NYSE and are not required to comply with certain provisions of U.S. securities laws.
4. Our certificate of incorporation states that the Series I preferred stockholder is under no obligation to consider the separate interests of the other stockholders and contains provisions limiting the liability of the Series I preferred stockholder.
5. The provision of our certificate of incorporation requiring exclusive venue in the state and federal courts located in the State of Delaware or federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against us and our directors, officers and stockholders.
6. Our ability to pay periodic dividends to the holders of our common stock as intended is not guaranteed.new
7. If we were deemed to be an “investment company” subject to regulation under the Investmentnew
8. Company Act, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.reworded
9. Actions taken to implement the reorganization transactions that must occur by the Sunset Date as part of the integrated transactions committed to in the Reorganization Agreement may adversely impact us.new
10. Anti-takeover provisions in our organizational documents may delay or prevent a change of control.reworded

Read these in Item 1A · See the changes

Headings in the FY2024 10-K with no match this year.

1. Natural disasters and catastrophes could materially and adversely affect KKR.
2. We have significant liquidity requirements, and adverse market and economic conditions may adversely affect our sources of liquidity, which could materially and adversely affect KKR.
3. AUM, referred to as perpetual capital, is subject to material reduction, including through withdrawal, redemption or dividends, and termination.
4. Our inability to raise additional or successor funds, to raise funds with as favorable terms or comparable size as existing or predecessor funds, or to raise capital for other investment vehicles could materially and adversely affect KKR.
5. The investment management and insurance businesses are intensely competitive.
6. We are subject to focus by some of our fund investors, stockholders, regulators and other stakeholders on environmental, social and governance matters.
7. We depend on the efforts, skills, reputations, business contacts, and conduct of our employees and our ability to retain our employees and to recruit prospective employees.
8. We rely significantly on third-party service providers and other intermediaries, which exposes us to operational, reputational and other risks that could materially and adversely affect KKR.
9. Rapidly developing and changing global privacy and data laws and regulations could further increase compliance costs and subject us to enforcement risks and reputational damage.
10. We may expand into new investment strategies, geographic markets and businesses and new types of investors or seek to expand our business or change our strategic focus with new strategic initiatives, which may result in additional risks and uncertainties in our businesses.
11. Our liquidity, business, results of operations and financial condition could be materially and adversely affected if we fail to manage our balance sheet commitments.
12. Extensive regulation of our businesses affects our activities and creates the potential for significant liabilities and penalties, which could materially and adversely affect KKR.
13. Certain Recent and Potential Regulatory Developments
14. Current Alternative Asset Manager Legal and Regulatory Environment.
15. Other Financial Markets Regulation.
16. Portfolio Company Legal and Regulatory Environment
17. Anti-corruption, economic sanctions, trade controls, and foreign direct investment laws
18. Certain types of investment vehicles, especially those offered to individual investors, may subject us to a variety of risks, including new and greater levels of public and regulatory scrutiny, regulation, risk of litigation and reputational risk, which could materially and adversely affect us.
19. Risk management activities may not be effective and, consequently, may adversely affect us.
20. Our valuation methodologies for certain assets can be subjective, and the fair value of assets established pursuant to such subjective methodologies is uncertain and may never be realized.
21. Our investment activities have significant liquidity requirements, and changes in debt or equity markets may materially and adversely affect our investment activities.
22. Dependence on significant leverage in our investments could adversely affect our ability to achieve attractive rates of return on those investments.
23. Various exposures to, and investments in, the securities of leveraged companies or companies that are experiencing significant financial or business difficulties involve significant risks.
24. Our equity investments and some of our debt investments rank junior to investments made by others, exposing us to greater risk of losing our investment.
25. We often pursue investment opportunities that involve unique business, regulatory, legal, tax or other complexities, including complexities arising from the large size of our investment or from a lack of control over the investment, which involves significant risks.
26. We make investments that are highly concentrated by type of issuer, geographic region, asset types, or otherwise.
27. Our investments in real assets such as real estate, infrastructure and energy may expose us to increased risks and liabilities.
28. Our growth equity strategy invests in emerging and less established companies that are heavily dependent on new technologies where success is less certain.
29. Third-party investors in our investment vehicles with commitment-based structures may not satisfy their contractual obligation to fund capital calls when requested by us, which could adversely affect an investment vehicle's operations and performance.
30. Our business activities may give rise to a conflict of interest with our clients.
31. Investors in certain of our investment vehicles are entitled to redeem their investments in these vehicles on a periodic basis, and certain of our investment advisory agreements may be terminated with minimal notice.
32. Our stakes in our hedge fund partnerships subject us to numerous additional risks.
33. Our plans for Global Atlantic may not achieve their intended benefits, and certain challenges, costs or expenses may outweigh such intended benefits.
34. Our insurance business relies on third parties to distribute its insurance products, and any disruption with our third-party distribution network could have a material adverse effect on us.
35. We may be required to accelerate the amortization of deferred revenues and expenses, including DAC and VOBA.
36. Differences between Global Atlantic's policyholder behavior estimates, reserve assumptions and actual claims experience, in particular with respect to the timing and magnitude of claims and surrenders, may adversely affect KKR.
37. Estimates used in the preparation of financial statements and models for insurance products may differ materially from actual experience as these determinations involve a significant degree of judgment.
38. Global Atlantic's growth strategy includes reinsurance of insurance obligations written by unaffiliated insurance companies, and its ability to both consummate and realize the anticipated financial benefits from reinsurance transactions is uncertain.
39. Global Atlantic's actual or perceived financial strength impacts its ability to sell its products, and a downgrade in Global Atlantic's ratings or in the ratings of its insurance subsidiaries could materially and adversely affect Global Atlantic's ability to compete, raise equity or issue debt.
40. Global Atlantic faces risks associated with business it reinsures and business it cedes to reinsurers, which could cause a material adverse effect on us.
41. Changes in accounting standards could adversely impact our insurance business.
42. Global Atlantic may experience volatility in its net income under GAAP due to its funds withheld and modified coinsurance transactions.
43. Global Atlantic holds a significant portion of its reinsurance assets in trust, which may restrict Global Atlantic's ability to invest those assets and also may permit the ceding company to withdraw those assets from the trust in certain circumstances.
44. Certain of Global Atlantic's reinsurance agreements contain triggers that permit the reinsurance client to recapture some or all of the reinsured portfolio, which, if triggered, may have a material adverse effect on us.
45. The determination of the amount of impairments and allowances for credit losses recognized on Global Atlantic's investments is highly subjective and could materially affect us.
46. Global Atlantic's membership in Federal Home Loan Banks subjects Global Atlantic to potential liquidity and other risks.
47. From time to time, Global Atlantic participates in repurchase and reverse repurchase transactions that subject Global Atlantic to liquidity risks.
48. Global Atlantic's businesses are heavily regulated across numerous jurisdictions and changes in regulation could reduce the profitability of our insurance business.
49. Our Bermuda insurance subsidiaries are subject to regulation by the BMA that may restrict their operations, and we cannot guarantee that insurance supervisors in the United States or elsewhere will not in the future assert that our Bermuda insurance subsidiaries are subject to additional licensing requirements.
50. Global Atlantic may not be able to mitigate the reserve strain associated with statutory accounting rules, potentially resulting in a negative impact on Global Atlantic's capital position or in a need to increase prices or reduce sales of certain insurance products.
51. An investment in our common stock is not an investment in any of our investment vehicles, insurance companies or other businesses operated by our subsidiaries, and the assets and revenues of our investment vehicles are not directly available to us.
52. Our common stock price may decline due to the large number of shares eligible for future sale, and issued or issuable pursuant to our equity incentive plans or as consideration in acquisitions.
53. Future issuances of preferred stock may cause the price of our common stock to decline, which may negatively impact our common stockholders.
54. Our certificate of incorporation provides us with a right to acquire all of the then outstanding shares of common stock under specified circumstances, which may adversely affect the price of our common stock and the ability of holders of our common stock to participate in further growth in our stock price.
55. We intend to pay periodic dividends to the holders of our common stock, but our ability to do so may be limited by our holding company structure, contractual restrictions, our cash flow from operations and available liquidity.
56. We will be required to pay certain principals for most of the benefits relating to our use of tax attributes we receive from historical exchanges of our common stock for KKR Group Partnership Units.
57. We may from time to time undertake reorganizations that may adversely impact us.