Thanks for joining us today. Really excited to be hosting Rob Lewin, CFO of KKR. KKR is one of the world's largest alternative asset managers. They've got about $744 billion of AUM as of December 31st, 2025, and that's spread across private equity, real estate, infrastructure, private credit, and liquid strategies. Rob, welcome.
Bart, thanks. Thanks for having us this morning, and thanks everyone in the audience for your interest today.
Superb. Maybe we can start just with an intro in terms of, you know, providing a high-level overview of KKR and maybe more importantly, like what are your strategic priorities, as you're focused on in 2026?
Sure. You know, our business model and strategy is largely set today. Our asset management business, plus our insurance business, plus strategic holdings, we think is the winning business model. As we look to 2026 is very much an execution year for us. Bart, you asked about our priorities. Always at the top of the list is gonna be generating exceptional investment performance on behalf of our clients and our policy holders. Private wealth remains a really big strategic priority for us and prudently building our private wealth platforms with vehicles and products that we feel we can be really proud of 10 + years from now. I'm sure we'll discuss as part of this discussion, you know, we recently announced the acquisition of Arctos.
Big priority is making sure that that gets integrated well into our firm and that we're benefiting, you know, day one from our respective ecosystems. We thought there's a lot of synergy there. On the insurance side of our business, it's really about marrying our competitive advantage in sourcing and origination out with our competitive advantage in raising third-party capital. Those two things, we think, in combination with GA's platform, you know, will continue to allow us to build a really differentiated insurance business over the course of the next decade. Then in strategic holdings, again, leveraging our global sourcing and origination platform on the private equity side to add to a part of our business, that is in addition to everything we're doing in asset management and insurance.
Then the final priority is the most important one, Bart, that's continuing to invest in our people and our platform. You know, KKR will celebrate its 50-year anniversary on May 1st. In a lot of ways, I think our culture is similar today to when Henry, George, and Jerry Kohlberg set up KKR in 1976. You know, our job is really to continue to protect and grow that culture over the next 50 years. We take that responsibility really seriously.
Thanks for that overview. Very helpful, and it's actually a good segue into what I want to touch on in terms of, you know, that culture. You've been with the firm now for 20 years. You mentioned you're celebrating, KKR is celebrating its 50th anniversary this year. So, you know, walk us through what differentiates KKR's culture and what makes it unique.
Yeah. I've had a really fortunate run at KKR over the past couple of decades. I've gotten to work in different businesses, different geographies. I've gotten to oversee some different functions at KKR, inclusive of being CFO for the last six years. I do have, I think, a pretty interesting purview around this question. You know, I think if you looked at KKR's senior leadership team, many of them are gonna look like me in the sense that they've been at KKR for a long period of time, and they've also worked across different businesses and geographies. I think the commonality amongst all of us, and the reason why we've decided to make our careers at KKR, is because we really like winning together as part of a team.
We trust each other, we root for each other, and you know, I can't speak for other organizations, but it's a big reason why we've all decided to make our careers at the firm. More tangibly, as it relates to what is unique about KKR, we still operate KKR with one P&L across the firm, and what that means is that everybody gets paid off of one compensation P&L. Anybody who gets carried interest at the firm shares in global carried interest. If you work in our Asia credit business, you're gonna have carry in our U.S. private equity business and vice versa.
We think all of that really incents collaboration, incents teamwork, makes mobility across the firm much easier, and at the end of the day, we think is a big contributor to generating alpha on behalf of our clients. When you think about, you know, KKR, we believe, you know, our lessons learned travel, best ideas travel in a way that is really unique, and in a way that drives differentiated investment performance, and I think you've been able to see that in our results over the last number of years. I do wanna tie in, just quickly, Bart, that point with our business model. That is the reason why we have the business model that we do.
Mm.
It is so that we can grow KKR without feeling like we need to add, you know, very significant, you know, additional headcount resources or operating complexity. We wanna keep our collaborative culture intact, and we wanna keep the place small. That's why we've chosen the business model that we have.
Thanks for unpacking that. I think it's very powerful. One item I wanna just dive into a little bit more on that front is you've got an employee ownership program that you created within portfolio companies, and it's a differentiator. Maybe walk us through that and how it's leading to an advantage for the business.
Yeah. Maybe I'll start with some background for those in the audience who aren't familiar what we've done. About 15 years ago, partner of mine, Pete Stavros, he currently co-heads our global private equity business. At the time, he ran our U.S. industrials platform. He started experimenting in industrials businesses, so big employee base that are non-management oriented, in providing broad-based equity ownership in those businesses. It wasn't just about providing equity, but it was really about creating an ownership mentality. What he saw from a results perspective was quite staggering. You saw engagement scores go way up. Importantly, quit rates went way down. In these industrial businesses, safety and incidents went way down, working capital efficiency up, and ultimately, you saw big flow-through to margin expansion in those businesses.
Mm.
Fast-forward today, we've started to roll this out broadly across our portfolio, and today have 85 businesses across the world that have a broad-based ownership program in place. Of those 85 businesses, or if you look at those 85 businesses, you know, we have given out billions of dollars of equity to almost 200,000 non-management employees. In terms of the ones that we've exited and how they've performed, just to give a few stats here, 13 of those 85 businesses have had an exit, and we have as part of those exits distributed $1.7 billion of equity value to 30,000 non-management employees.
Really do feel like we've created a win-win where we've created a structure that as a fiduciary to our clients is driving more equity value to them in spite of increased dilution, and it is also providing an upside equity opportunity to a population of an employee base that generally has not been able to participate in that equity. Of those 13 businesses, I think these stats are really interesting. If you look relative to similar vintage exits across all of KKR, we've generated a 50% better return in those 13 exits, and of those 13 exits, they've roughly doubled their EBITDA over our hold period. It's something we believe really strongly and across our platform. We think it is a differentiator for us.
It in part explains why we've generated the investment performance we have for our clients, and it's something as part of our culture we're really proud of too.
Great. Thanks for unpacking that for us. Maybe we can zoom out a little bit now and talk about macro and, you know, lots of volatility, geopolitical, AI software-related concerns. How do you think about the macro and that dynamic impacting capital deployment and monetizations? You know, you've got a globally diversified business model. How does that help mitigate some potential impacts?
You know, obviously we're at a moment in time on the geopolitics side that's quite turbulent. We've had some volatility on the public policy side, you know, tariffs over the past 11 months. So far, those things have not materially bled into the macro. Capital markets continue to remain fairly robust across the world, but we're watching it closely. We have not seen a material slowdown across those core operating metrics that you mentioned. On the monetization side, we have a couple of examples already in the year of some very healthy exits. In early January, we announced the sale of a great software business called OneStream for 4.5 times our money.
Just last week, we did a secondary offering in a healthcare business in our U.S. private equity portfolio at approximately five times our money. We had some peers last week do a very big exit as well. The monetization environment today largely feels okay. On the capital deploy side, again, we're seeing opportunities across the world. I think we're advantaged in the sense that we do have a really global footprint. You know, over half of our investment professionals sit outside of the U.S.
You know, how that's translating to, you know, our capital markets business as an example, you know, I'd expect our revenue in Q1, and again, still coming together, we're not through the quarter, but to be largely in line with what we did last quarter, be largely in line with where we were in Q1 of 2025 in that $200 million-$225 million range. I'd say the capital markets are holding in there. But undoubtedly, volatility is up. And if we do spill over into the macro, we talk a lot about how are we positioned as a firm to be able to come out of that in a place that is much stronger.
If we do go through a very volatile time in the macro, you know, can that impact near-term earnings? Yes. Our job is to make sure that our medium and longer-term earnings are better as a result. We have almost $120 billion of dry powder to be able to invest into that dislocation. That's almost a record number for us. You know, I think a lot about how we're positioned in our insurance franchise. You think about that type of an environment, spreads are gonna likely blow out, so the left-hand side of the balance sheet in our insurance business becomes cheaper. At the same time, you probably have less competition on the right-hand side of your balance sheet for liabilities.
Our job is to make sure that we can really benefit from that type of environment on behalf of our policyholders and shareholders. I think third-party capital is a big part of that story. Of $120 billion of dry powder, $6.5 billion of dry powder sits against our insurance business that we can draw down just like a private equity fund to be able to invest into dislocation. Fully deployed, we think that $6.5 billion translates to over $65 billion of fee-paying assets under management. Just want to put that number in perspective relative to the $744 billion of total AUM that we have as a firm today.
That's great, and lots of buffers there and resilience. Maybe we can dive into one other topic in terms of, you know, private credit, lots of headlines out there. Could you maybe unpack the private credit AUM within KKR and, you know, the risks or opportunities you're seeing in the portfolio?
Yeah. Obviously, a lot of headlines on private credit, and so I will do my best to be very fact-based as we go through this. I think it's important to start with context. You know, the global credit space today is roughly $45 trillion. The headlines around private credit largely relate to direct lending.
Yeah.
Direct lending market is $1.7 trillion, so only 4% of the global addressable credit market. Inside of KKR, as we define private credit, it is roughly $135 billion of AUM. Importantly, $85 billion of that $135 billion comes from our fast-growing and differentiated platform in asset-based finance.
Yeah.
Approximately $40 billion of our $135 billion is direct lending, the aspect of the credit markets that's getting a lot of headlines. As you break down that $40 billion even further, most of that direct lending capital sits in institutional funds that we have, SMAs that we have, you know, all performing, we think really well and ahead of industry benchmarks. The minority of our capital, roughly $17 billion of direct lending, sits in BDC format, again, where a lot of the headlines are. $14 billion of the $17 billion sits in a public BDC. That public BDC has had pressure on returns over the near term, largely from some subordinated exposure. We have $3 billion of capital in private perpetual BDCs. Think private wealth BDCs. That's where a lot of the headlines are.
In fact, we don't have much capital in that private BDC space, and we think can be a real opportunity for us here, where a lot of our peers have a lot more concentration in the private BDC space that can come under pressure, for us to be able to come out of this period of time potentially taking share. You know, we spend, I think, a lot of time, you know, at the headline level, but in the reality as you unpack it, and you look at our private credit business, we think our asset-based finance business is a leader in the space. There's a lot of tailwind secularly, with asset-based finance that we think we will benefit from, given our leadership position.
You know, direct lending today, for us, is relatively small part of our business versus our peers, but we think remains a real opportunity for us in our job in what is a, I would say, a turbulent time, is to really take share coming out of this.
Great. Thanks for that detail. You know, just on software, you mentioned on the call it's about 7% of AUM. Earlier in our discussion, you talked about an exit portfolio company at a good mark. You know, what are you seeing there within the software portfolio? Are you seeing any weakness otherwise? Can you just unpack that a bit?
I think it's important to note as we think about our software exposure across KKR and the 7% number we quoted, we really tried to be expansive in how we thought about that definition.
Mm-hmm.
It's not a SIC code-based approach. As we look at, as an example, a private equity deal that would sit in our healthcare vertical, if the underlying is software, we've included that.
Okay
In the software definition. One area question that we've received and is not out there in the public domain, so I wanted to provide it in this session, is if you look at Global Atlantic, our software exposure there is roughly 2.5%, so not all that material. I did wanna to put that 2.5% in context. You know, the largest concentration that we have at Global Atlantic, of course, is across investment-grade fixed income.
Mm-hmm.
As part of that investment-grade fixed income portfolio, we own some Microsoft bonds. Those Microsoft bonds would be incorporated in that 2.5% figure. I don't think when people talk about concerns around software, they're really talking about that.
Mm-hmm.
More broadly, on the software side, you know, Bart, you know, this is not something that we've been focused on for a few weeks across the headlines. This has been an effort across, you know, our firm for a few years now. You know, we do have some humility in our approach here. I don't think anybody really knows what the end game is, but we're taking very thoughtful, educated views with the best people across the firm and outside resources to help us do that. We don't believe all software is equal. We think across our portfolio you're gonna have real winners that will benefit from AI, and you're gonna have some businesses that will likely underperform and that may get disintermediated over time.
One of the things we spend time thinking about and looking at is, we just look at ourselves. We are a big user of technology across all of KKR, and I think in a pretty sophisticated way. We look at our long-term tech roadmap at KKR, and our perspective, our forecast is we're gonna continue over the long term being big users of software, especially enterprise-wide software that is really embedded across our platform. I hope I'm wrong on this statement, although I'm probably not, given how embedded it is in our platform, probably at a higher price point over time too. I as I said, I think we're spending a lot of time here watching it carefully.
It is evolving real time, but our most considered view right now is that we're gonna have more winners than losers in our portfolio as a result of the shifting dynamic that's going on in the world right now.
Awesome. Thanks for unpacking that for us. Maybe we can move to fundraising. You know, you're coming off a record fundraising year, and I view KKR as going through sort of this fundraising super cycle, if you will, through the next two years. You know, what's the latest update on fundraising? Maybe you could touch on institutional and wealth as well, but help us understand that a bit better.
Yeah. Maybe I'll touch on institutional, insurance, and wealth in those three buckets.
Sure.
You know, fundraising's been a real bright spot for us. In 2025, we raised a record $129 billion of capital. The institutional market has felt very strong, continues to feel strong. For us, of course, we're watching the volatility that's in the market, but to date it remains a strong channel at KKR, and we believe our peers as well. If you put that $129 billion into context for a second, and you referenced our flagship fundraises, in actuality, only 14% of our capital raised in 2025 came from flagships, and we had our two largest flagships in the market in Americas private equity and global infrastructure. We've become a much more diversified firm over even the last five years.
Five years ago, that ratio would have been substantially different, and I think that's an important point. That's the institutional side. On the insurance side, we've become a much better partner to insurance companies by virtue of owning Global Atlantic. Our AUM from insurance companies outside of Global Atlantic has more than tripled since we bought the business.
Wow.
We have consolidated under one team, you know, our broader insurance relationships. We're able to go talk to insurance companies with one team around potentially being a reinsurance provider for them, either on the flow side or block side, you know, how we can partner with them on the asset management side, and how we might be able to distribute to them through our capital markets business. I think it's a pretty powerful way of approaching that industry. Remains a strong point for us. I touched on private wealth at the outset of this discussion. A lot of headlines on private wealth. I wanted to provide some facts and some new facts as part of this discussion as well.
You know, we mentioned on our Q4 earnings call that in January, so February 1 closes, we had raised $1.3 billion of K-Suite capital. That's our private wealth vehicles. That was up 20% year-over-year, I think differentiated from the space. A new number that we wanted to provide this morning was that in February, so for March 1 closes, we've raised $1.4 billion of capital. Again, you know, past performance doesn't indicate future performance, but it is a healthy data point for us, especially when we look across our industry.
Mm
See different numbers coming from our peers, and I think speaks to the diversification of our platform. Again, you know, the long-term vision in private wealth to us is not about month-to-month capital raising. It's really about building products and vehicles that we're proud of 10+ years from now. That starts with creating a great client experience with delivering exceptional investment performance. If we do that, we're confident over the long term that the adoption of the private wealth investor to alternatives will follow, and we'll have products that are very scaled, and could be quite generative on behalf of our shareholders.
It's great color, and thanks for sharing that additional data point. I think super appreciated. One point I want to touch on a bit further is, from an operational perspective, you know, how do you manage I think you've got about 30 strategies in market, so very diversified across asset classes. You know, how do you guys manage that fundraising pipeline, if you will, internally?
Yeah, it's interesting. We've had a large number of products out there now for a number of years. The 30 products isn't new for us. I think importantly though, like I want to take you back to our strategy. We do not want to be all things to all people in asset management.
Mm.
We want to be great at the things that we are already doing. I don't think you're gonna see. Certainly not gonna see a lot of strategy proliferation for us at all.
Mm.
I don't think that you're gonna see as much product proliferation for us relative to our peers, because it's not about the next asset management product and the next asset management product after that. That is not how we define our strategy. When it's really about trying to be great at the things that you're already doing, it makes managing that portfolio of capital raising a lot easier to digest. Of course, you layer on top of that, you know, a substantial sales force.
Yeah
Across the globe and global relationships that extend across, you know, of course, the institutional insurance and wealth side, you know, I think position us to be able to handle that number of products that are in the market.
Okay.
I don't think, Bart, you're gonna see us over the next couple of years go from 30 products to 60+ products.
Okay, got it. Rob, you mentioned earlier in our discussion the Arctos acquisition. I want to spend a couple minutes there in terms of, you know, walk us through the strategic rationale for that deal, and then you've put out a target, a longer-term target of $100 billion, in that segment, and so the building blocks as you think about that scaling over time.
Yeah. We're incredibly excited about this acquisition. It's something, you know, in a lot of ways we wanted to get done for a long period of time. The Arctos business today has two parts of the business. In a lot of ways they really created the asset class around sports team and league investing across the globe. They are the clear leader in that space.
Mm.
We think the broader sports ecosystem has got a lot of tailwinds behind it, will be a real addressable market that grows over the next decade at really attractive rates, and we are very well positioned to be the leader in that broader space over that period of time. A lot of growth in front of us in sports. Second part of the business is GP solutions. This is a large growing addressable market in its own right. Arctos on its first time fund is already a top player in the space. It's really about being a liquidity provider to other alternative asset managers. Think growth capital, dealing with succession issues, you know, potentially buying out retired partners or institutional investors.
We think there's a lot of tailwinds, especially in an environment in the alternative asset management space that can see some consolidation over time. Then the third part of the business doesn't exist today, but in some respects might be the biggest over time. You know, you look at KKR on a blank sheet of paper, and the biggest area or addressable market that we're not present in today, and we get asked about this all the time, is the secondary space. We've always said that it is not a need to do for KKR. We can achieve our long-term financial ambitions without it, but if we ever found the right partner that we felt like we can build a top player globally with, we would be all in. We feel like we've found that rather with the Arctos team.
You know, the legacy of the leadership team comes from the secondary space. We think their credibility in that asset class, their ability to recruit talent, combined with our brand, our access to capital, our industry expertise, can allow us on a blank sheet of paper to build a business over a long period of time that we think is quite scaled and meaningful to KKR. Bart, you talked about in combination, being able to build to a $100+ billion platform. To be clear, if we did not think we can do that, we would not have done this deal. Likewise, I think if Ian Charles or David O'Connor, the two founders of Arctos, were up here, they would say the same thing.
They would not have been interested in doing this deal if they didn't think that the combination of our two platforms can build something that's really special over time. We're, as I mentioned, really excited about what this platform can do for KKR over a long period of time.
Great. Thanks for that. Wanted to touch on next strategic holdings. You know, it's a differentiator for KKR as well. You know, how are the operating companies performing in today's environment? You've got a longer term $1.1 billion operating earnings target. Like, is that reliant on a few portfolio companies or is it the broader portfolio kind of hitting sync and stride?
Yeah. Maybe let me be clear on what strategic holdings is today. Strategic holdings are really about, you know, buying businesses and owning them for the long term and generating compounding cash flow for the benefit of our shareholders. This is in addition to everything that we're doing in asset management and insurance, and it is very culturally friendly in that we have no employees that sit in strategic holdings today. We think it is really in a lot of ways an unconstrained addressable market and an area where we think institutionally, given our global private equity footprint, that we've got a real right to win as an organization. We've got approximately 20 businesses that sit in strategic holdings. Today it is a big and diversified portfolio.
We have outlined plans to take operating earnings in strategic holdings from $350+ million in 2026 to $1.1+ billion by 2030. We're well on our way to being able to do that with the portfolio that we have. Your question, is it reliant on a small number of companies or really the portfolio? As I think about building towards 2030, very much that portfolio effect.
Yeah.
You know, is it possible we can have some underperformers as part of the 20? Of course. We're also well on track with a number of those 20 businesses that are well exceeding the investment cases that we've underwritten. Based on the diversified and global nature of that portfolio, you know, we feel really good about being able to achieve the targets that we've outlined. As I mentioned, you know, this is on top of everything we're doing in asset management and insurance. I want to bring us back to where I started. You know, we think we've got the winning business model for the next decade, and strategic holdings is a really big piece of that.
It's a great diversifier. Look, we're coming up on time, Rob. I want to make sure I give you the floor in terms of any final comments or thoughts as we wrap it up.
Yeah. Well, again, Bart, thank you for having KKR at the RBC conference today, and thank you all for your interest. There's a lot of volatility out there and a lot of headlines. But in terms of the things that we can control at KKR, our business model and the execution against that business model, we have never felt as well positioned as we do today. We feel like we've got the right team in place globally and a team that in a lot of ways has really locked arms in being able to execute on a unique vision that we have for where we can take KKR. So thanks again for spending the time with us this morning. Bart, thank you for having us.
Thank you, Rob, and thank you everyone for spending time. That was great. Thanks.