With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

With a savvy and diversified portfolio, the company manages a wide array of financial assets, such as investment banking, real estate, and hedge funds.

This year's Fortune 500 marks the 66th running of the list.

Kohlberg Kravis Roberts, or KKR, is a New York-based investment firm that focuses on alternative asset classes including private equity, real estate, and infrastructure.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Founded in 1976, Kohlberg Kravis Roberts &amp; Co. (KKR) is a pioneer in private equity. Today it is one of the world’s largest private equity firms, specializing in direct investments, funds of funds, and real estate. Its business runs the gamut of the financial sector including alternative asset management, credit, middle-market private equity, and distressed assets. KKR is known for having broad expertise across sectors and a hands-on management style. The company’s revenues come from management fees, transaction fees, and carried interest from its own investments. KKR is one of a growing number of publicly traded private equity firms, debuting on the New York Stock Exchange in July 2010.

Q2 2026

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Q4 2024

KKR (KKR): Company Profile, Stock Price, News, Rankings

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Ladies and gentlemen, thank you for standing by. Welcome to KKR's First Quarter twenty twenty five Earnings Conference Call. During today's presentation, all parties will be in the listen only mode. Following management's prepared remarks, conference will be open for questions. As a reminder, this conference is being recorded.

I will now hand the call over to Craig Larsen, Partner and Head of Investor Relations for KKR. Craig, please go ahead.

Thank you, operator. Good morning, everyone. Welcome to our first quarter twenty twenty five earnings call. This morning, as usual, I'm joined by Rob Lewin, our Chief Financial Officer and Scott Nuttall, our Co Chief Executive Officer. We would like to remind everyone that we'll refer to non GAAP measures on the call, which are reconciled to GAAP figures in our press release, which is available on the Investor Center section at kkr.com.

And as a reminder, we report our segment numbers on an adjusted share basis. This call will contain forward looking statements, which do not guarantee future events or performance. Please refer to our earnings release and our SEC filings for cautionary factors about these statements. I'm going to begin this morning by reviewing our results for the quarter before Rob walks through the current environment, its impact on our key business drivers as well as our strategic positioning longer term. Scott will then finish with some closing thoughts.

So beginning with our headline financial results for the quarter. Fee related earnings per share came in at $0.92 up 22% year over year. Total operating earnings of $1.24 per share are up 16% year over year, and adjusted net income of $1.15 per share is up 19% compared year ago. All of these figures are among the highest we reported as a public company and are reflective of the diversified and global business model built over the last decade plus. Going into our quarterly results in a little more detail.

Management fees in q one were $917,000,000 up 13% year over year, driven by fundraising and deployment activities. If anything, management fee growth in the quarter feels understated relative to the breadth of the $31,000,000,000 of new capital that we raised in Q1. The largest component of this $31,000,000,000 was capital raised for North America 14, the latest vintage of our flagship North America private equity strategy, had not turned on as of March 31 and therefore did not contribute to management fees in the quarter. Rob's gonna give a a little bit of a more fulsome update on Americas fourteen in a few minutes. Total transaction and monitoring fees were 262,000,000 in the quarter.

Capital markets transaction fees were 229,000,000, driven primarily by activity in new and existing portfolio companies within both private equity and infrastructure. Fee related performance revenues were 21,000,000 in the quarter. So altogether, fee related revenues came in at 1,200,000,000.0. That's up 22% year over year. Turning to expenses.

Fee related compensation was right at the midpoint of our guided range at 17.5% of fee related revenues. Other operating expenses were $168,000,000 for the quarter. So in total, fee related earnings were 823,000,000 or the 92¢ per share that I mentioned a moment ago with an FRE margin of 69. Insurance segment operating earnings were $259,000,000 and strategic holdings operating operating earnings were $31,000,000 both of which were in line to modestly ahead of our recent guidance. In terms of our Strategic Holdings segment, we've closed on our purchase of additional stakes in three existing core private equity businesses as we introduced on our call last quarter.

We continue to feel that our Strategic Holdings business is a real differentiator for us, and these transactions are a further accelerant for this segment. Today, our share of annual revenue and EBITDA across the 18 company portfolio is approximately $18,000,000,000 and 900 and 20,000,000 respectively. Again, that's our share. And since quarter end, we've announced the acquisition of a new core private equity investment, Cairo Healthcare, which will bring our strategic holdings portfolio to 19 companies. So altogether, total operating earnings were a dollar 24¢ per share.

As a reminder, total operating earnings is comprised of our fee related earnings together with our insurance and strategic holdings operating earnings, which represent the more recurring components of our earnings streams. Over the last twelve months, total operating earnings comprised nearly 80% of total segment earnings. So said differently, nearly 80% of our pretax earnings over the last twelve months were driven by a more recurring earning streams, highlighting the durability of our business, especially during periods of volatility. Turning now to investing earnings within our asset management segment. Realized performance income was 348,000,000, and realized investment income was 218 for total monetization activity of 566,000,000.

That's up almost 40% year over year. This quarter activity was largely driven by the annual crystallization of carry from core PE as well as other monetization events across traditional PE as well as growth equity. Turning to investment performance and looking at page 10 of our earnings release. The private equity portfolio was up 4% in the quarter and up 11% over the last twelve months.

a quarter where investment performance was undoubtedly helped by the geographic diversification of our firm as European and Asian equity indices were both up in the quarter. In real assets, the opportunistic real estate portfolio was up two in the quarter and up five over the LTM. Infrastructure was up four in the quarter and appreciated 13% over the LTM. And in credit, the leverage credit composite was flat in the quarter and up seven over the last twelve months, and the alternative credit composite was up three in the quarter and up 11 over the last twelve months. And finally, consistent with historical practice, we increased our dividend to $0.74 per share on an annualized basis or $0.01 $85 per share per quarter beginning with this quarter.

This is now the sixth consecutive year we've increased our dividend since we changed our corporate structure, increasing our annualized dividend from $0.50 per share to $0.74 over this period of time. And with that, I'm pleased to turn the call over to Rob.

Thanks a lot, Craig, and thanks, everyone, for joining our call this morning. We've all experienced some real volatility, particularly since early April. It is in this type of environment that our business model and collaborative culture uniquely positions us, and we are using that to lean in and source attractive investment opportunities around the globe for our clients. As we navigate this volatility, there are a number of themes and questions that we have consistently been hearing from our shareholders and clients. So I thought I would spend my time this morning walking through a number of common areas of focus.

The first is the impact of tariffs on our existing portfolio. As a starting point, it is important to remember that tariffs and supply chain diversification and resilience have been front of mind topics for our investment, public affairs, and macro teams dating back to the global pandemic. As a result, for five plus years now, this has been a standard topic of conversation. Taking a look at our global private equity portfolio today, this includes traditional, core, and growth. Based on our initial findings, we estimate that 90% of our AUM has limited to no first order impact from the announced tariffs.

Importantly, this figure does not include identified mitigating measures that we are actively implementing. And specifically, our core private equity portfolio and our strategic holdings segment are not expected to have any material impact from tariffs. Across our infrastructure platform, the vast majority of our companies have either contractual protections that insulate KKR returns or minimal estimated exposure. Looking at our infrastructure deployment over the last five years, approximately 70% has been in Europe and in Asia. And as we look at our credit portfolio, there will be pockets of exposure, but we believe the opportunities, and we really do think this is a credit picker's market, will outweigh the downsides.

So while we expect there will be individual instances of direct tariff in parts of the portfolio, Based on how we understand tariffs today, we feel well equipped to manage these challenges and on the whole feel very good with how our portfolio is positioned. The second theme that I wanted to cover this morning is the effect on both the deployment and the monetization environment. We find ourselves in the fortunate position of being ready as a firm to play offense on behalf of our clients. Volatility brings opportunity, and we benefit from the global and connected nature of our firm. We've closed or committed to over $30,000,000,000 worth of new investments since the start of the year.

Within private markets, these investments are diversified across geographies with more than half coming outside The US. Notably, multiple of these investments are in Japan, where we continue to be at the forefront of activity, including the purchases of Fujisoft and Topcon in our private equity strategy. Looking only at investments that we announced over the last month, so when the tariff related volatility began, we committed over 10,000,000,000 of equity. This includes 7,000,000,000 in private markets across global opportunities in traditional PE, core PE, infrastructure and tech growth to name a few, and another 3,000,000,000 in private credit across direct lending, high grade ABF, and junior debt. Moving next to monetizations.

We think we remain really well positioned here. Our discipline around investment pacing and linear deployment has definitely contributed to the overall strength and maturity of our portfolio. At quarter end, our gross unrealized performance income stands at $8,700,000,000 It's a high point for us and up over 25 year on year. I think this number in particular stands out given our healthy level of monetizations over the past twelve months. As a result of our maturing global portfolio and strong investment performance, we are better positioned than some might expect in terms of realization activity, even in the face of the market volatility.

To give you a sense, looking at our pending monetizations, so this is based on transactions that are signed but not yet closed, we have direct line of sight to north of $800,000,000 of monetization related revenue, most of which will be performance income. This includes exits of Seiyu in Japan, Keto Crosby in The US, and foreign infrastructure investments to name a few of the key drivers. Of that 800,000,000 plus, we expect at least $250,000,000 to be generated in q two. It's a very healthy figure for us as we stand here in just early May. The third theme that I wanted to hit on is the impact on our capital raising efforts.

We are actively engaged with our clients. Part of this is making sure they know what is happening with their portfolios, but a lot of it is discussing how to invest into these markets and ways that we can work together. We've heard a range of responses, and they are evolving with the market. While it may be early as we see how this all plays out, today, there are no changes to our targets, and we have continued conviction in our fundraising outlook. Total new capital raised in the quarter was $31,000,000,000 and it's worth spending a minute on our North America private equity strategy.

In April, we completed the initial close period to North America 14 at $14,000,000,000 It's a great first step for us and reflects, in our view, the strong investment returns we've delivered on behalf of our clients alongside a differentiated return of capital profile. And remember, our approach here stands in contrast relative to many in our industry as we raise traditional PE funds focused across North America, Europe, and Asia compared to the global funds you often see from our competitors. This approach, we think, has allowed us to raise more capital. As of 03/31, we had over $40,000,000,000 of committed capital across our active traditional private equity flagship funds and has also allowed for more diversified carried interest profile at the same time. And this doesn't include committed capital across core private equity, mid market, and our growth strategies.

Looking at another important piece of capital raising private wealth. Our K Series suite of vehicles continue to maintain traction. Across the four investing verticals, AUM was at $22,000,000,000 including activity that closed 04/01/2025. This compares to $9,000,000,000 a year ago. Our North Star for the K Series suite continues to be focused on building vehicles that we can be proud of ten plus years from now.

As a result, recognizing that we don't read too much into the month to month sales, we continue to be encouraged by our performance, deployment, and the capital raising activity. And earlier this week, the two public private credit solutions created an exclusive partnership with the Capital Group have launched. We are similarly focused on building these products for long term success. And as we look ahead to the second half of the year, we would expect to give you an update on the private equity and real asset product launches. In addition, work is underway to extend access for individuals interested in private markets through model portfolios and target date funds.

Turning next to insurance. We are now a year plus into owning a % of Global Atlantic, and we are progressing well on our path to modestly evolving how we source source both liabilities and assets, including raising more third party capital, elongating our liability profile, and sourcing additional alternatives. This addition of longer dated alternatives to the portfolio, where we think that we have a differentiated sourcing advantage, will drive up overall returns while at the same time naturally reducing leverage over time. Financial performance here begins with Insurance segment operating earnings. In Q1, as you would have heard from Craig, we reported $259,000,000 which was in line with our expectations.

And consistent with our comments last quarter, would expect insurance operating earnings to stay in that $250,000,000 plus or minus level during the next few quarters. This line item alone does not capture though how our model works and the overall impact of our insurance related economics. A lot of it appropriately shows up in our asset management segment. Firstly, management fees from our IV sidecar vehicles as well as strategic partnerships. This capital allows us to grow GA in a very capital efficient way, and there is more to come here.

As an example, Japan Post Insurance announced in q one their intention to expand our existing strategic partnership and make a new 1,000,000,000 to $2,000,000,000 investment here. Number two, capital markets fees, where we've just begun to scratch the surface. We see the potential to generate several hundred million of additional annual revenues over time. In 02/2024, that number was closer to 50,000,000. And finally, the management fees charged for our investment management agreement with Global Atlantic.

Critically, even while we are in the process of shifting our strategy to emphasize longer duration and more private market assets, Our all in pretax ROE of our insurance business is approaching 20%, with a clear path to 20 plus percent returns as we get all the elements of the business working well together. The last theme that I want to go through before handing it off to Scott is around the durability of our model, which provides us with a significant amount of both stability and visibility. Over 90% of our capital is perpetual or committed for an average of eight years or more. Today, we have a hundred and 16,000,000,000 of committed but uncalled capital. And if you look at our management fees, they are largely calculated on committed or invested capital and therefore not influenced by marks and corresponding NAVs.

And finally, we have a record amount of capital on which we're not yet earning fees with 64,000,000,000 committed with a weighted average management fee rate of about a hundred basis points that turns on when the capital is either invested or enters its investment period. Just to put that $64,000,000,000 figure into perspective, it is up almost 50% compared to one year ago. So we benefit from real stability of management fees and increased visibility on how they will grow. And finally, our business is global and diversified. Almost half of our investment professionals sit outside of The US.

And looking specifically at our management fees, they are well diversified across asset classes. Over the last twelve months, management fees across private equity, real assets, and credit and liquid strategies were each over 1,000,000,000, and in aggregate, have grown at a high teens CAGR over the past three years. We don't think that there are any asset management firms that combine our scale, growth profile, and diversification. Now I'll end where I started. This is an environment where our people and our model really should excel.

Thanks, Rob, and thanks everybody for joining our call today. Given the recent volatility and uncertainty, I wanna spend a few minutes on how we're navigating this environment and address what else may be on your minds. Before I do that, some context. Today is KKR's forty ninth birthday. We were founded on this day in 1976.

You and I have been here nearly twenty nine of those forty nine years. Over this period, the firm has seen a number of cycles and dislocations. In our experience, times like this yield some very attractive investment opportunities. The key is to use our global and diversified business model with significant locked up capital and a hundred and 16,000,000,000 of dry powder to keep investing when others are scared. These periods always end, and we typically look back and wish we had invested more when the world is most uncertain.

We are running the firm with those lessons in mind. We did a good job leaning into the COVID dislocation, and we're approaching this environment with the same mindset. As Rob mentioned, we've announced over $10,000,000,000 of investments in the last four weeks since the tariff announcement, and we have significant pipelines across our businesses. So you should expect to continue to see us investing into this environment. No doubt, some sale processes may be delayed if this continues, but it is times like this where we see the benefit of being very global as Asia and Europe are less impacted so far and multi asset class and connected as companies still need capital but may prefer debt over equity if valuations are down.

So we are optimistic about deployment and the returns we will see from this vintage. We're also sure you have questions about what this means for monetizations. As Rob mentioned, we have a mature portfolio and benefit from linear and disciplined deployment. As such, we have record embedded gains in our portfolio, and those gains are global and across asset classes. Here again, we have good line of sight and several assets in sale processes.

So we remain of the view that we can monetize gains in this environment. And if we do decide to delay some processes, that just means we will likely monetize more next year. And we're sure you also have some questions about fundraising. We want you to have our views and some facts. As an example, China based LPs make up a low single digit percentage of our AUM.

Some may delay decisions in this environment, but we don't expect a material impact. We're also watching private wealth flows, which have not been affected to date. These markets are in adoption phase, and we have a long history of outperforming in down markets. So this period could actually accelerate adoption over time, and we think our partnership with Capital Group will accelerate that adoption as well. And remember, a good portion of our fundraising comes through Global Atlantic.

We expect annuity demand to be largely unaffected in this environment, and it could be positively impacted as investors focus on safety and quality. In short, given our momentum and the diversity of our global fundraising channels, we remain confident we will continue to raise scaled capital. Stepping back, you're also likely wondering if we have changed our view of what we are capable of achieving as a firm. We have not. Joe and I shared 2026 guidance last year.

We still feel good about those numbers across both our fundraising and financial metrics. When you cut through it, we believe that while this dislocation may be different for a variety of reasons, the key is to stay focused on what we control and to not waste the opportunity that affords. We will continue investing, speaking with our clients, finding new themes, and looking for strategic opportunities, some of which are only available in times of distress. Times like this reveal experience, culture, and business model durability, and they give us the opportunity to differentiate ourselves with performance, client engagement, and strategic action so that we emerge stronger as a firm and as investors. That's our focus and intent.

With that, we're happy to take your questions.

Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star and one on the telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and 2 if you would like to remove your questions from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. To request participants, please limit to one question and one follow-up and rejoin the queue. Ladies and gentlemen, we will wait for a moment while we poll for questions. The first question comes from Craig Siegenthaler with Bank of America. Please go ahead.

Good morning, Scott, Rob. Happy 40 birthday, and hope everyone's doing well. Thanks, Rob. Thank you. Is on your Asia business.

So we all know that you have the largest private markets business across Asia. So we're curious in your perspective on what the emerging trade war means for your strategy, your ability to fundraise, and also investing effort across the region.

Thanks for the question, Craig. No change to our strategy. I mean, one of the things we talked about in the prepared remarks is, you know, that we learned a lot kinda going through Trump one dot o and thinking about tariff implications. Learned a lot during COVID about supply chains as an example. So we have been looking at investments across asset classes with those lessons and the benefit of that time frame in mind.

So no change to our strategy. You know, our effort, as you know, is cross asset class and pan Asian. And so we have efforts across private equity, real estate, infra credit, the beginnings of an insurance effort, nine offices across the region approaching 600 people. So we think it is a big opportunity for us as a firm, and we see a lot of growth ahead. On the margin, one of our themes for a while has been intra Asia trade as just an example.

We think that's gonna be an even bigger opportunity now on the back of this. And perhaps as investors stay focused on being even more global with their portfolios, you know, I I would say January, February, there's a little bit of a bent toward maybe I should have more in The US on the margin. I think it's gonna be beneficial to Asia flows if people decide to stay more global. And and so it's something that I think will benefit us given our scale in the region.

And then, Craig, it's Craig. I was just gonna add some numbers to this. I think you're broadly aware of this. I know you spent a healthy amount of time in the region yourself. But at the end of twenty nineteen, we had 21,000,000,000 of AUM, almost 90% was in private equity.

And looking at q one twenty five, we had about 70,000,000,000 of AUM with traditional PE comprising just below 50% of that. So as Scott noted, meaningful growth with meaningful diversification at the same time.

Thank you, Craig. Just for my follow-up, I heard your commentary towards the end of the call on the resilience of private wealth, flows and actually the potential for an acceleration coming out of this correction. Do you see the strong relative performance to date, or the very low adoptions as the key drivers? And and was that comment really brought across asset class? Because I know you're you're doing very well in particular in private equity just given CapEx strong recent performance.

Yeah. I think it all really is a it's a comment on our ability to perform through a cycle, Craig. And so the comment was more if the public markets pull back, that's when we tend to outperform by even more. So if the private wealth channel, which is newer to the alternative space, has that experience, we think over time that could actually accelerate adoption. So it's more of a forward looking comment.

You're right. We haven't really seen impact flows as of yet. Craig will walk through some numbers in a minute. But for us, you know, as I mentioned in the prepared remarks, we've been we've been around a long time. We've seen a lot of cycles, and we're a learning organization.

And so we learned a lot of lessons during the financial crisis, and one of those was the importance of linear deployment and portfolio construction. As you know, we've been talking about it for a long time. We've been implementing it for a long time. It's now coming through the results. And so the bigger performance point, you know, I think is gonna start to shine through and show how differentiated we are.

So just to take one example, America's private equity, over the last eight years, we've returned two times the amount of capital that we've called. And that's in a business that's been growing. And so we think this is gonna allow us to outperform over time in terms of capital access, and we do see it as a go forward advantage across channels. So private wealth is part of that, but we also see the benefit across institutional and everything else we do. Craig, you wanna give an update on private wealth?

Yeah. We were looking at the stats through April. You know, if you if you look at at q three and q four, we were below that 3,000,000,000 of new capital raised in q three, right at about that in q four. In q one, we'd raised $4,000,000,000 across the case series for the quarter. And when we look at activity at this point through April, so one month period, we're right at about that billion level.

So it it feels like a healthy, month for us. It's interesting when you look at overall, flows in particular for private equity and infrastructure. In q one, roughly half of those were inside The US, roughly half outside The US. And based again on this preliminary data for the month of April, we're again very diversified with a a pretty equal split both inside and outside The US. So, again, overall, tough to read too much into any four weeks of of data, particularly April of twenty twenty five, but, at this point, things feel okay.

Thank you. The next question comes from Alex Blostein with Goldman Sachs. Please go ahead.

Hi. Good morning. Thank you for the question. So zooming out a little bit, the comments over the course of your prepared remarks suggested, you know, a much more resilient business, perhaps what's perceived in the market today. You talked about monetization not quite falling off the cliff.

Deployment, dry powder, really healthy. It sounds like you're not really changing the outlook for fundraising either. So so the question obviously is, you know, with the stock doing what it's done over the last few months, why not step up the buyback here? I know it's a dynamic approach. You guys have talked about it in the past, and you're looking to generate the best return on invested capital.

But, if not now, when? And maybe you guys can also hit on, expectations for, putting the $2,000,000,000 plus of convert to work and kinda how you're thinking about use of those proceeds.

Great. Alex, it's Rob. Why don't I start? So we've been very consistent as it relates to capital allocation for some time, and I really do think the most important thing for any capital allocation process is consistency. And we've got two goals.

One of which is to make sure that every marginal dollar of free cash flow is going to generate the most amount of long term earnings per share. And the second goal, closely related, is to make sure that we are increasing the quality of those earnings. So more durability, more resilience, more recurring nature of those earnings. And every marginal dollar of free cash flow we look at through that lens, and we've talked about four areas of using our capital base to accomplish those goals. One of which is share buybacks, the other three are core private equity strategic M and A and insurance.

Share buybacks, as you know, over the past several years have been a really important part of our capital allocation framework and use of capital. And I've got every confidence that as we look forward and as we think about using our capital, share buybacks will continue to be a core part of how we think about capital allocation. But we also don't have a framework that puts a specific amount in any one bucket. To us, it's all about how do we take that marginal dollar of cash flow and drive the most amount of earnings per share across our business over a long period of time with the most amount of durability and resilience to that cash flow. And we're gonna take that same lens.

And as I said, I would expect that share buybacks as we look forward will continue to be a very important part of that allocation framework. And and maybe the last point, because I think anytime you're talking about capital allocation, it's important to point this out. You know, KKR senior management own roughly 30% of KKR. So any decision that we take around capital structure, around capital allocation, you briefly mentioned the convert we did a couple of months ago, you know, is really through that lens in a way that is highly aligned with our our shareholder base. And that's really the the approach that we've taken.

And if you look at share buybacks historically, you know, we've used our capital base to retire roughly 10% of our shares outstanding, 15% of our free floats. We've done so at an average price of roughly $28 per share. And so we like our historical body of work, and would expect that it going forward, we're gonna continue to be able to find accretive ways to put that capital work for all of our shareholders.

Thank you. The next question comes from Bill Katz with TD Cowen. Please go ahead.

Hi. Good morning. This is Manu on for Bill. Happy birthday, you guys. Just wanted to say that.

Maybe maybe a question on asset backed finance. Maybe update us on the platform as we go into the balance of 2025. Some color on expanding the sourcing funnel and bank partnerships.

Hey, Manu. It's Craig. Why don't I start? Glad you asked about. So look first on page 13 of our release.

This is the page that details our credit and liquid strategies business. We break out the composition of the AUM in that piece. And if you look overall, total credit AUM up 10% year over year, 280 plus billion of AUM. The private credit component is growing at even a a faster rate. So we've got a hundred and 17,000,000,000 of AUM, 26%.

And within that private credit piece, 74,000,000,000 of that is an asset based finance, and ABF year over year has grown, at a number between thirty five percent and forty percent. So the asset based finesse business, it's a big business for us. Our scale here is probably larger than someone, might expect. And so back to your your question on how we're positioned at this market. Look, it's a lot of the same themes you have heard from us historically.

Massive end market, 6,000,000,000,000 on its way to 9,000,000,000,000. In our view, you've got really hot barriers to entry. There's a lack of scale capital, which, as you noted, a number of, traditional providers in our view leaving this market and are creating a void. So it's, we're continuing to find attractive risk reward. I think our clients like the diversification away from the corporate credit cycle.

And in terms of the current environment, we think this is a very good environment for asset based finance. We think companies are still gonna look to be efficient with volatile, with volatile markets as as companies look to finance themselves. We think companies will continue to look for creative ways to finance themselves off balance sheet. Again, as we think about banks, we think our opportunity set will continue to increase. And if you look at overall asset based finance deployment for us, it was a little over $4,000,000,000 in Q1.

Over the trailing twelve months, we're at about 21,000,000,000 So again, it's a healthy part of deployment for us. Just to give you frame of reference, 2023, that number was at about 8,000,000,000 So you're seeing really significant growth for us in a number of different asset classes. Just feels like there's a lot more for us

Thank you. Our next question comes from Ben Budish with Barclays. Please go ahead.

Hi. Good morning, and thanks for taking the question. I wanted to ask maybe a two in one on capital markets fees. I know sometimes you'll kind of give a look into what how Q2 is shaking up. Wondering if you could do that.

But I'm also curious, in your presentation in the slide deck, noted that about two thirds of transaction fees were debt focused in the quarter. Can you talk about what is that historically? Is this sort of a function of a changing environment or part of a more explicit strategy to kind of broaden the type of business you're doing there? Thank you.

Great. Ben, thanks a lot for the question. Maybe I'll answer the second part of the question first because it's the shorter part of the answer. Roughly, we've been at that two thirds level over time, so no real big change in the quarter. As it relates to our capital markets business fees, listen, q one was a really solid quarter for us, particularly given the backdrop, 230,000,000 of revenue.

Q one tends to be historically a lighter quarter. And frankly, as we came into the quarter looking at pipelines, I think we thought we'd be a little bit shy of that number. As we look at q two, especially with the backdrop that we have, lower deal flow out there, we've got a very solid pipeline. Does that shape up to be similar revenue numbers q one? Not sure.

We might be a little bit shy of that, but given the environment, feel really good about that pipeline. Back half of the year, we're gonna need to see. You know, let's see how the environment plays out, how the capital markets shape up. But as we sit here, February, when we look at q one, look at our forward pipeline, feel better about it than we felt February. Now we had a big back half of the year in in 02/2024.

We'll see how the rest of '25 shakes out, but we feel really good with how our business continues to be able to perform in different market environments. You look at 02/2022 and 02/2023, we generated roughly $600,000,000 of revenue in both of those years, so really protected downside in that business, created more of a floor from a revenue perspective in very choppy capital markets environments. And then you saw a spike to roughly $1,000,000,000 of revenue when the markets opened up in 02/2024. Team's done an awesome job building that business over the last almost two decades, and we think there's a lot of upside from here.

Thank you. The next question comes from Glenn Schorr with Evercore. Please go ahead.

Hi there. So I wanna circle back to the conversation on private equity. You you you clearly helped us see how, you know, the linear deployment and investment pacing helps your particular situation, especially look at even America's Twelve and the the cap capital you've returned. So the question is broader. It do you expect in in 02/2006 and '8 02/2006, '7, and '8 vintages, that was kind of subpar performance for the industry.

People thought our private equity is dead. We go out and we've raised a lot of money. It doubles and triples. So the question is, is this time any different for the industry? There's more funds.

There's more assets raised. There's subpar performance. Are we going to see a bigger shakeout? Because we didn't see enough of one in in past downturns. So the the real question at the end of all that is, will we see lower allocations to private equity or just a dispersion and consolidation to the better performance?

Hey, Glenn. It's Scott. It's a great question. You know, our expectation is that it'll probably be more about where you ended up. It'll be more about dispersion.

And I think you're gonna have meaningful dispersion of results across private equity managers. And, you know, that will start to come through maybe in a way that it hasn't, to your point, for a very long time. We're we've already seen a trend for a while of institutional investors in particular globally wanting to do more with fewer. And so they've been consolidating their relationships with people that they think can perform through a cycle and that in a lot of cases are global and multi asset class. Obviously, we've benefited from that.

So I think it's gonna be I wouldn't use the term shakeout. I think there'll be more of a concentration of capital with fewer players. And I think we'll now see the benefit of what I mentioned before that, you know, we learned a lot during GFC, during COVID, during Trump one dot o. We've been applying those learnings. You know, volatility creates opportunity, but you need to have the capital to invest and the courage to invest it.

And we as a firm and, you know, we talk about culture all the time here. We're incredibly well connected, and if nothing else, we learn. And so I hopefully, that will benefit us and as it comes through results, But I think it's gonna be dispersion as opposed to shakeout.

Thank you. The next question comes from Steve Chubak with Wolfe Research. Please go ahead.

So recognize that you're planning to give a more fulsome update on the capital partnership in the second half, but was hoping you could just provide some early color on distribution strategy and specifically areas of differentiation versus other competing products and just how these vehicles might evolve over time.

Hey, Steve. It's Craig. Why don't I start? Look, we're we're obviously at the earliest of days are really excited with being in position to launch the two vehicles. You would have seen in the press release from a couple of days ago that there's more to come with a private equity focused product in addition to real assets yield oriented products.

And alongside of that, there are initiatives focused on things like model portfolios as well as target date funds. So we're we're just at the, again, at the earliest of days, and we were, you know, preparing for the question of what do we think good looks like. And that is, Steve, a a super tough question, to answer because in many ways, it feels like together, we both are forging a new path, a very exciting path, and we'll keep everybody abreast in terms of, progress as we go forward. But our mindset, as you've heard from us over time, is not on new capital raised in a three, six, or twelve month period. We together are trying to design products that we think five, ten, fifteen years from now, collectively, we're both gonna look back at and feel really proud about the net investment performance that we've delivered on behalf of our clients.

And if if we are successful in that part of the equation, we're gonna be able to raise just a a fine amount of money. So, again, just there's a lot of excitement within our firm, I think, within Capital Group as well about the opportunity, and it it just feels great at this point to be launched and underway.

Hey, Steve. It's Scott. I think, Craig said it well. You know, we've talked about the private wealth opportunity for a while. We do think that it is significant.

As you know, a lot of institutions globally are 30 to 50%. In alternatives, individual investors are low single digits depending on what you look at, one or 2%. So the the opportunity for kind of expanding our market is meaningful. But even more importantly for that, it just doesn't make sense that if you're a teacher in Texas and you're retired, you have 40% of your retirement funds invested in alternatives. And if you're a retired dentist, you have zero.

KKR (KKR) Q1 2025 Earnings Call Transcript

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