KKR: Year-To-Date Results Demonstrate Resilience

Nov. 01, 2022 7:04 PM ETKKR & Co. Inc. (KKR)1 Comment
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Weighing Machine
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Summary

  • Against a difficult backdrop in global financial markets, KKR reported a solid set of 3Q results with increases in fee-related earnings and fee-paying AUM.
  • While KKR shares are volatile, fees on committed capital in private markets should be quite stable even in a recessionary environment.
  • The current environment should provide tremendous opportunities in KKR's traditional PE business and its private credit and real assets funds. KKR has over $100 billion in dry powder.
  • At $49 per share, investors get to buy KKR's fast growing, fee related earning stream for just 15x earnings and are getting performance fees essentially for free.

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Even after a recent bounce, KKR (NYSE:KKR) shares are down over 38% year-to-date despite a solid operating performance and bright long-term outlook. While investors seem to think Private Equity is a volatile businesses dependent on successful

growth in alts

Alternative Asset Growth over Time (KKR Investor Presentation)

performance

Investment Performance (KKR Investor Presentation)

recurring fee growth

Growth in Recurring Fees (KKR Investor Presentation)

fee income over time

Fee Income Growth (KKR 3Q22 Investor Presentation)

This article was written by

Weighing Machine profile picture
2.81K Followers
Former global buyside analyst/PM doing fundamental research for over a decade (2001-2012). Long term (5 year) time horizon when investing.

Disclosure: I/we have a beneficial long position in the shares of KKR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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