KKR & Co. Inc. (KKR) Q2 2026 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by. Welcome to KKR's Second Quarter 2026 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following management's prepared remarks, the conference will be open for questions. I will now hand the call over to your host, Craig Larson, Partner and Head of Investor Relations for KKR. Craig, please go ahead.

Thank you, operator. Good morning, everyone, and welcome to our Second Quarter 2026 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. This quarter, Rob is going to begin by reviewing our key growth drivers as a firm and how those are impacting our results. And afterwards, I will review our Q2 results in more detail. With that, I'd like to hand the call over to Rob.

Great. Thanks a lot, Craig, and thank you, everyone, for joining our call this morning. We have been in an environment with a lot of volatility and noise around our space. So I wanted to take a step back today and go through how we are seeing things. As a firm, we feel better positioned than ever to drive differentiated earnings growth. Our confidence here comes from four key secular and structural growth drivers. What is particularly encouraging — and what I will walk you through in the second part of my remarks — is that we continue to see these drivers play out in our operating results as well as our financial performance. But let me first start by laying out our framework. First, we are fortunate to operate in high-growth industries with multiple megatrends. The alternative asset management industry has been growing at a healthy rate, and we expect that to continue well into the future. We are in the midst of a global CapEx cycle — AI, digital and energy infrastructure, defense, industrial — so massive needs here for capital on a global basis, which makes our industry increasingly relevant. From a geographic perspective, we continue to see significant opportunity in Asia. The Asia Pacific region today is one of the most dynamic parts of the world and represents roughly 60% of the expected global GDP growth. It is the area where alternatives are the least penetrated relative to the U.S. and Europe, creating an enormous opportunity across private equity, infrastructure, real estate, private credit and insurance. Simultaneously, we are experiencing significant demographic shifts with an aging population that is in need of retirement solutions. The number of people aged 65 and up around the world is expected to roughly double between now and 2050, and more individuals are investing for their own retirement. Second, we are well positioned against that backdrop with multiple identifiable growth avenues across our platform. Just to take you through a few of them: we have one of the largest infrastructure platforms in the world at approximately $120 billion of AUM. We are benefiting from that demographic shift and need for retirement solutions in both our insurance and our wealth businesses. In GA, we see significant opportunity to grow both in the U.S. and internationally, especially in markets like Japan. And in wealth, we remain bullish around the likelihood of individual investors allocating more to alternatives over time and believe we are still in the earliest days of this theme playing out. We have a differentiated presence and track record in Asia. We are the largest private equity player. We're the largest infrastructure player. We have rapidly growing real estate and credit businesses and we see a huge opportunity in insurance. We have built a platform over the past 20 years that cannot be replicated overnight, given our track record, our geographic coverage, our brand, as well as our existing footprint, which includes nine offices and nearly 1,000 people on the ground in the region, over 200 of whom are sitting in Tokyo. We have a world-class private equity business that continues to grow rapidly. We have a leading asset-based finance platform. We are seeing increased demand in private investment grade and are incredibly well positioned for that opportunity. And with our acquisition of Arctos, we believe we can scale KKR Solutions to over $100 billion of AUM over time. The third driver is our differentiated business model. We have been very purposeful in building a business model that allows us to meaningfully grow our earnings and share price over the long term without requiring us to significantly increase our headcount or sacrifice our culture in order to do so. In our Asset Management business, there is substantial growth in front of us, and we have been intentional about creating additional ways to take full advantage of the broader KKR ecosystem over the next 10 to 20 years. That is why we also have an insurance business and Strategic Holdings. Both of those segments leverage many of the core competencies that we have built up in asset management over the past 50 years, including our investing acumen, our access to differentiated capital, our brand and our collaborative culture, which brings me finally to that unique culture and how it could be a real accelerator of growth. We run KKR as one firm with one compensation approach. Relationships travel, ideas travel, lessons learned travel. Our culture creates much of our investing alpha, which is why we have built a business model that allows us to keep the firm relatively compact and maintain that competitive advantage. Importantly, KKR employees also own approximately 30% of our shares. For context, the other companies in the S&P 500 have an average of approximately 2% insider ownership. So it's that ownership mentality that fundamentally shapes how we think about capital allocation and long-term value creation. We are incredibly well aligned with our shareholders. Now I will walk you through some examples of how these drivers are showing up in our results. Let me first start with an example of a secular tailwind and how we are positioning ourselves. AI and the need for infrastructure build-out behind it will require trillions of dollars of investment over the coming decade. To date, we have committed and invested over $75 billion across digital infrastructure and power. However, our existing infrastructure funds carry diversification guidelines that limit how much we can dedicate to a single theme relative to the scale of that opportunity. So we formed Helix Digital Infrastructure, which we announced in June, with over $10 billion of initial long-duration committed capital. Helix is an AI infrastructure company that delivers coordinated data center, power and connectivity to hyperscalers. It is a perpetual open-ended vehicle that adds to our perpetual capital base where KKR will earn management fees and performance fees. Alongside our infrastructure team, Helix is led by Adam Selipsky, who is the former CEO of Amazon Web Services. Adam brings firsthand experience scaling the world's largest cloud business and deep insight into hyperscaler priorities. NVIDIA and Vistra joined us as important strategic partners and together with Kuwait Investment Authority and KKR as founding investors. Current KKR track record here and our expertise with the execution capabilities at Helix — we believe that we have unique positioning against what is a mega trend. Turning to our Asset Management growth avenues and fundraising. The execution here has been tangible. At our April 2024 Investor Day, we set out a three-year $300 billion fundraising target. That was an ambitious number for us at the time, given our size. Since the beginning of 2024 through June 30 of this year, we have raised $305 billion of capital, with $34 billion coming in in Q2, so beating our three-year target in just 2.5 years. In those 2.5 years, we have seen significant AUM growth across our platform. Private equity increased approximately 45%. Infrastructure has doubled. Our credit business is up roughly 35%. Asia increased over 35%. Third-party insurance is up over 50%. Wealth increased sixfold, and we are still in the earliest of days. And with the closing this quarter, we now manage approximately $20 billion of capital through Arctos with significant upside in front of us. Alongside investment performance, an important driver of our broad-based fundraising success relates to capital returns. A common narrative that investors hear is that our industry isn't returning capital to investors. This is not accurate from a KKR perspective. We've actually had an acceleration in exit activity. The second quarter was the largest monetization quarter in our history. Page 21 of our earnings release highlights some of the activity in just this quarter alone as well as transactions that we've announced but have not yet closed. Importantly, exits have been diversified across strategies, regions and vintage and reflect strong returns with multiples ranging from 2x to up to 20x of our invested capital. Our success here speaks to the quality and maturity of our portfolio, the strength of our operational teams and the collaborative culture that I mentioned earlier. And despite our heightened level of monetization activity over the last three years, the remaining unrealized gains in our portfolio have continued to grow and today stand at roughly $18 billion. Now let me address our differentiated business model and some of the impacts that we are seeing in our results. In Q2, our FRE margin was 70% and has been over 65% for the last ten consecutive quarters, and we do not view that as a ceiling. The reason for that goes back to our business model. We have no ambition to be all things to all people in asset management. Rather, we want to be great in the areas where we are already present. So if we are successful at executing on our business plan, and we have a lot of confidence as a management team that we will be, we are going to continue to grow our revenue at a pace that meaningfully exceeds our head count and expense growth. We're starting to see that operating leverage flow through our financials. When we look to future earnings growth, we see significant latent earnings within our Asset Management, Insurance and Strategic Holdings segments. Let's go through them. Within Asset Management first, we have a record amount of capital on which we are not yet earning fees with $72 billion committed, and that is up almost 30% since this time last year. It has a weighted average management fee of about 90 basis points that turns on when the capital is either invested or enters its investment period. Second, our average annual performance income eligible deployment over the past five years has more than doubled versus the prior five-year period. It is that more recent deployment that is going to drive future performance-related income. So significant visibility into future earnings growth. In Insurance, there's embedded growth that hasn't shown up in our P&L given we report largely based on cash outcomes. As a reminder, we've been focused on elongating GA's liability profile and in turn growing our alternatives portfolio, which we are showing on a cash outcomes basis versus mark-to-market. Including the impact of mark-to-market, Insurance operating earnings would have been north of $600 million year-to-date. In Strategic Holdings, our existing portfolio and activity gives us confidence that we could scale Strategic Holdings operating earnings from $187 million over the last twelve months to $1.1-plus billion by 2030. Finally, on our alignment. As we disclosed in our intra-quarter press release in late June, this quarter we made an important structural change to how we report our K-Series private equity vehicle. We are now reporting realized performance fees earned from this vehicle within fee-related performance revenues, within our segment earnings, which is subject to a 15% to 20% compensation rate. Historically, these fees were included within realized performance income and were subject to a 70% to 80% compensation rate. We feel this change conforms to current industry practice and enhances comparability for investors. Given the compensation rate impact, all else equal, this change structurally increases GA's forward earnings per share, and I think further reflects our commitment to alignment. As owners of approximately 30% of KKR stock, we do think like shareholders first. We have tremendous confidence in our forward monetization pipeline and our ability to generate differentiated performance outcomes, which gives us the confidence to make changes like this to enhance long-term earnings per share growth. Putting this all together — multi-decade secular tailwinds, multiple growth avenues across geographies and asset classes, a business model that allows us to compound earnings over a long period of time and a culture built on alignment and long-term outcomes — we are confident in our ability to drive differentiated earnings growth for many years to come. With that, I'm going to hand the call back over to Craig, and he's going to walk you through our record Q2 results in some additional detail.

Thanks, Rob. In short, you're seeing continued performance at a very high level across KKR. First, for the quarter, we're reporting record results across all three of our headline financial metrics: fee-related earnings, total operating earnings and adjusted net income per share. Over the trailing 12 months, LTM results for all three of these metrics also set historic highs. In terms of our key operating metrics, new capital raised over the LTM as well as capital invested over the LTM also hit all-time highs, outpacing again any other 12-month period in our history. Looking more specifically at Q2, FRE per share came in at $1.32. That is up 34% on a year-over-year basis. Total operating earnings of $1.68 per share are up 27% year-over-year and adjusted net income per share of $1.63 are up 38% year-over-year. Going into the P&L in a little more detail: management fees and management fee growth continues to be strong. For Q2, management fees were $1.2 billion. That's up 26% year-over-year. Excluding catch-up fees in both periods, management fee growth was 18%. This activity has been driven by both our fundraising success across all of our asset classes alongside continued healthy deployment. So spending a minute on these two topics. First, on fundraising. As Rob mentioned a moment ago, we raised $34 billion of new capital in the quarter with demand really widespread across asset classes and geographies, and that brings capital raised over the LTM to $133 billion. It's worth beginning with infrastructure and taking a step back for a moment. You've seen us raise approximately $45 billion of capital for our latest vintage funds and new initiatives as the platform continues to expand. That includes Infra 5 and Asia Infra 3, which as of June 30 are at $25 billion on a combined basis, plus Helix, which Rob touched on a few moments ago, our global climate transition strategy, as well as capital raised over the LTM at our K-Series infra vehicles and our diversified core Infra strategy. Ultimately, these figures highlight the breadth and depth of our infrastructure platform. You're seeing capital raised for different geographies, different risk-reward and through different distribution channels as well as, crucially, our track record of delivering on behalf of our clients. In wealth, inflows across our K-Series have rebounded nicely after the April lows seen across the industry. In total, we brought in $3 billion of capital in Q2, and K-Series AUM now stands at $42 billion compared to approximately $25 billion a year ago, so up almost 70% year-over-year. So despite all of the noise around wealth in our industry and all the headlines, KKR has experienced healthy net inflows with total K-Series AUM year-to-date through June 30 up over 20%. Also of note, we're reaching new milestones within Arctos where we had the final close of the inaugural Keystone fund at over $6 billion. That's the largest first-time fund in the broader GP solutions space, and the first fund closed since KKR completed its acquisition of Arctos back in May. On the investing side, we deployed $24 billion of capital in Q2, bringing us to $104 billion of capital invested over the LTM, so healthy investment activity this quarter really diversified across our segments. Turning back now to the P&L. Total transaction and monitoring fees were $221 million in the quarter. Capital markets fees were $178 million and fee-related performance revenues were $255 million. Fee-related performance revenues are up meaningfully year-over-year, driven by our offshore infrastructure and private equity K-Series vehicles. And as Rob walked through, this is the first quarter that the crystallization from private equity wealth is sitting within FRPR. Fee-related compensation was again right at the midpoint of our guided range, which, as a reminder, is 17.5%. Other operating expenses for the quarter came in at $210 million. So in total, fee-related earnings were $1.2 billion or the $1.32 per share figure that I mentioned a few moments ago and our FRE margin came in just above 70%. Spending a few moments on Insurance. Segment operating earnings came in at $288 million in Q2. Three things of note here. First, we had approximately $40 million of net realization activity in our alternatives book in the quarter. We've noted historically on these calls how we report based on cash outcomes for the alternatives portfolio at GA, and over time, as the portfolio seasons and realizations occur, you should expect to see gains run through the P&L and provide a lift to our reported operating earnings. That's what you saw this quarter. We don't think that $40 million is a quarterly run rate figure for us as the alternatives portfolio is still quite young and it's maturing, but it's certainly a positive sign of a trajectory that we see over time. Second, as a reminder, Insurance segment operating earnings alone do not capture the impact of GA recognizing the economics that are part of asset management. This is really important. Slide 17 of our earnings release outlines our total insurance economics. So alongside Insurance operating earnings, we received management fees under our investment management agreement, fees from IV-related vehicles, where we have $62 billion of AUM, up from approximately $50 billion just a year ago, as well as GA-related capital markets fees, which we think can reach hundreds of millions annually over time. So considering all of these pieces, total insurance economics were $2 billion net of compensation over the LTM, that's up 13% versus the prior period, and that growth rate would have been higher including the impact of mark-to-market on our alternatives portfolio. Finally, it's worth emphasizing how well GA is positioned strategically because of our ability to bring together liability origination and asset origination at scale. On the liability side, our decades of experience and well-established insurance franchise provides a differentiated base of long-duration liabilities across products and geographies, complemented by access to third-party insurance side car capital. On the asset side, KKR's origination engine, including 20 proprietary ABF platforms with more than 7,000 employees alongside our globally integrated investment teams allows us to originate and tailor bespoke solutions. We also believe we can scale our insurance business globally, particularly in Asia, where our brand, track record and distribution capabilities position us well to increase our presence. Turning now to Strategic Holdings operating earnings. We earned $37 million in the quarter. Perhaps more importantly, we continue to have a lot of confidence in the $350-plus million of Strategic Holdings operating earnings for 2026 with that activity, as we've expressed previously, more back-end weighted over the course of 2026. So altogether, total operating earnings, or the more recurring components of our earnings streams, were $1.68 per share. That's up 27% year-over-year. Over the last 12 months, 84% of our total pretax segment earnings were driven by these more recurring earnings streams, which again we feel demonstrates the durability of our business model. Moving to investing earnings within our Asset Management segment: we had the highest monetization quarter in our history with realized performance income of $848 million and realized investment income of $220 million, which includes $30 million of investment gains generated from our Strategic Holdings segment. As Rob ran through, we added Slide 21 to our earnings release to highlight all of our activity here. Even with all of the realization activity, total remaining unrealized gains — gross carry together with the gains that sit on our balance sheet across Asset Management and Strategic Holdings — stand at $18.2 billion as of June 30. After interest expense and taxes, adjusted net income was just about $1.5 billion for Q2 or the $1.63 per share figure I mentioned at the beginning of my remarks. Turning to investment performance. Page 10 of the release highlights the broad-based performance we continue to generate across our portfolio. Within traditional PE, our portfolio appreciated 4% in the quarter and 9% over the last 12 months. Performance was led by our Americas portfolio with strong appreciation across both our public and private investments. Across the remainder of the platform, our infrastructure portfolio appreciated 1% in the quarter and 8% over the last 12 months. Opportunistic real estate was down modestly in the quarter, but remained positive over the trailing 12 months while both our leveraged credit and alternative credit composites generated positive returns in the quarter and appreciated 5% over the last year. So in summary, we had a strong Q2, and we have a great deal of momentum as we enter the second half of the year. With that, Scott, Rob and I are happy to take your questions.

At this time, we'll be conducting a question-and-answer session. Our first question comes from Alex Blostein with Goldman Sachs.

Thanks, everybody. A bit of a high-level question first for you guys. So when we think about management fee growth trajectory, really strong 2026, obviously, on the back of a number of larger flagships kind of hitting the run rate. As you look forward into '27, maybe it would be helpful to just take a step back and talk through some of the biggest drivers of management fee growth into next year given the tough comps from 2026? And how do you think about the kind of multiyear management fee growth algorithm in the business broadly?

Great, Alex. It's Rob. Why don't I start and maybe Scott will add on. I think you hit on a real strong point for us in management fees and we've said this on these calls before, but I think repeating it is helpful. I think you'd be hard-pressed to find another asset management firm that's combined our scale, our diversity of management fees — as a reminder, roughly one-third of our management fees come from each of our three business lines — and also the growth rate that we've had on management fees. So it's been a real strong suit for us. As we think about the forward outlook, we've got a lot of momentum: 30-plus products expected over the next 12 to 18 months, you're seeing some record fundraising numbers for us over the past 12 months. It's going to drive future capital raising. The amount of committed capital that is not yet bearing fees is at a record level for us as well. So again, a great forward indicator as it relates to future management fees — and there's certain parts of our business, including now KKR Solutions, where we're just getting going, and we see lots of opportunity in front of us. So as we think about that multiyear outlook for management fees, we continue to see a lot of upside going forward.

Alex, it's Scott. Maybe I'll take the opportunity of your question to just give a broader sense, not just management fees, but how we're feeling overall and how we're seeing things. We've been public 17 years. Joe and I have been here 30. As you and I have talked about, our space is subject to periodic bouts of external pessimism and periodic bouts of optimism. In our time here, I don't recall a period where the external perception is so disconnected from the operating fundamentals and how it feels inside the firm. In our experience, the best response to pessimism is performance. We're largely inclined to let the numbers do the talking, but we also recognize the external narrative and sympathize with how hard it must be to try to decipher what's what. So I want to spend a second going through what we hear as some of the sources of pessimism and how it feels inside the firm. I put it in five buckets. First is private credit anxiety about that space. For us, we expect a record third-party credit fundraising year. The second area of concern tends to be private wealth. We've all seen a lot of articles about redemptions and anxiety about the forward opportunity. As the guys mentioned, private wealth AUM is up 70% over the last 12 months, even more importantly, over 20% in the first half, and we've seen a meaningful rebound from the April lows. What you don't read about in the articles are the inflows. Third bucket of concern tends to be private equity monetizations aren't happening. You saw the results — record monetization quarter for us. Fourth is software — it's all going to be disrupted by AI. It's about 6% of our AUM. We sold one software asset earlier this year for 4.5x our cost, and we're still seeing high single-digit LTM revenue and EBITDA growth. The fifth thing is the four big buckets of anxiety lead to an overall concern that fundraising will slow. Year-to-date, we're ahead of expectations and record LTM fundraising. We expect a record fundraising year for the firm and our momentum feels like it's accelerating. So you put all that together — net income up 40% in the quarter, 30% in the first half. Acknowledging not everything is perfect everywhere all the time, but I wanted to share how it feels inside the firm right now. Our industry is increasingly K-shaped. Most external focus is on the unhappy part of the K. We find ourselves on the happy part of the K, and that's what's showing up in the numbers.

Our next question comes from Craig Seigenthaler with Bank of America.

Scott, Rob, Craig. Hope everyone is doing well. Scott, I really appreciate your perspective on that last one. Our question is on Global Atlantic. It's a two-parter: how has GA's organic growth outlook evolved across retail annuities, flow reinsurance blocks and the institutional channel? And can you also provide an update on the ROE trajectory just given higher competition than prior years?

Thanks, Craig. I'll go. I appreciate the question; in part those questions are related. We've talked about it last quarter and I continue to talk about it this quarter. We have seen heightened competition. We've made the determination that we're going to allocate a little bit less capital to insurance based on what we're seeing in the market today. But interestingly, if you look at what we did in Q2, very consistent with the evolution of the business: the liabilities that we did originate in the second quarter — 99% of those liabilities were at least five years in duration and approximately 80% were seven years in duration. So that's allowed us to, in turn, start to lean in a bit more on the alternative side. A lot of time spent in our insurance business is about optimizing results and, frankly, repricing our book of liabilities based on market conditions. It's hard to give a forward outlook on organic growth because it will be a function of where the markets are. Importantly, we believe we're incredibly well positioned in a world where we see heightened volatility: I think you'll have less competition on the asset side as spreads expand, and that is likely to lend itself to less competition on the liability side. We've spent a ton of time figuring out how to make sure we are competitively advantaged in a market where ROEs structurally can be materially higher. How we set ourselves up: longer-duration liabilities, a real linkage between liability origination and asset origination, and, importantly, a differentiated amount of third-party capital — we have $6 billion of dry powder that we think translates to north of $60 billion of buying power on the liability side. Not many insurance companies in the world can do that. In combination, we think we're incredibly well positioned for a more volatile environment. When you think about ROEs and insurance, it makes sense to look at them through a cycle. We're at a period of time where we think ROEs are structurally low given the competition on both the asset side and the liability side.

Our next question comes from Glenn Schorr with Evercore.

Scott, I want to follow up on your first comment in the opening remarks about being in the midst of a mega CapEx megacycle and AI power. A lot of us agree, but the market some days feels like we're overbuilt, priced-in spending comes down, and cash flow could come down. So curious: a) what you think of that; and b) how does that impact what risk you hold for clients and on balance sheet as you think about this next industrial revolution and fully monetizing the way versus managing that risk?

I appreciate the question, Glenn. You're right — there is a bit of schizophrenia out there. The answer for us is we actually think this is a huge opportunity for the firm. When you have these mega themes, there's ways to do it well and ways to do it less well. We're focused, as a reminder, not so much on investing in what's going to be the next chip company or the next LLM; it's more about the opportunities around this development from an infrastructure, real estate and credit standpoint. It's around the space — and I'll ask Craig to give some details on what we've been up to in particular in power and data centers and how we've thought about navigating what's going on right now.

Glenn, a few additional comments. Hyperscaler data center spreads have widened meaningfully just over the last couple of weeks. That stands in contrast to the broader investment-grade markets, which remain relatively tight. Year-to-date we've seen a flurry of jumbo deals — more $25-plus billion deals year-to-date than in the last five or six years combined — so it feels like there's some indigestion. Our team will remain consistent: we'll care about our counterparties and contract terms, and that allows us to be selective. In that context, the volatility we're seeing is helpful for us. While the data center piece gets a lot of press, the digital teams are broader: fiber networks, mobile infrastructure. We've been very active across renewables. Rob gave some of the stats earlier. There's also traditional infrastructure like electricity and gas transmission and wastewater networks. There's a lot of opportunity even in spite of the volatility.

Our next question comes from Devin Ryan with Citizens Bank.

I want to ask a question on Arctos. Obviously, some really nice momentum after the transaction closed and with Keystone as an early example of seeing the benefits of KKR distribution and the broader client network. Would love to think more broadly about the potential for the business as you think about the next sports flagship and how it connects to the path to getting Solutions over $100 billion of AUM.

Great, Devin. There's multiple paths for growth. The first couple of months post-closing, the opportunity feels even more significant and more real than we would have thought a few months ago. Arctos is a clear leader on the sports side. The opportunity for us, both in terms of Sports 3 and more broadly around sports-related investment across our entire ecosystem, is substantial. Keystone raising north of $6 billion of capital as a first-time fund speaks to the credibility of the team. The opportunity in the secondary space — the people, the connectivity and what the Arctos team brings combined with KKR's relationships and industry expertise — gives us confidence we can build a world-class GP-led business. We're spending time thinking about that. A potentially less visible but important part of the thesis is the ability for the Arctos ecosystem to create flow for Global Atlantic. That was an important part of our investment thesis. Combining all of that, we feel good about the target of $100-plus billion of AUM for Solutions over time and are pleased with early cultural and operational integration between Arctos and KKR.

Devin, it's Scott. I think about it as three businesses: sports — a fast-growing incumbent, already the largest player but the space is young; GP solutions — we have a differentiated model and a big pipeline; and secondaries — a startup in a very large addressable market. I don't know how the $100-plus billion will break down across these areas, but we see many different ways to get there and lots of opportunity.

Our next question comes from Steven Chubak with Wolfe Research.

Rob, Craig. I hope you're all well. Wanted to ask on the retail strategy. K-Series private equity vehicles continue to generate strong flows and you're benefiting from being less indexed to credit where fundraising headwinds have been more acute. Given elevated redemptions year-to-date and commentary suggesting redemptions have been more concentrated across a subset of international investors, has the recent turmoil reshaped your approach to expanding retail distribution abroad? If you could speak to the pipeline of new distribution platforms and how it informs the outlook for retail flows over the next six to 12 months, that would be great.

Steven, it's Scott. We see the articles about redemptions, but they often omit inflows. We're up over 20% year-to-date net, and that fact gets lost in the headlines. A few points: roughly 85% of K-Series is in private equity and infrastructure today, which is different than some peers. We're continuing to build out our Asia and Europe platforms and relationships; those are still building and represent meaningful opportunity. This hasn't changed our perspective on investing in growth. Education matters: advisers and clients need to understand what these products are and aren't. We're investing in that education globally. We also need distribution and platform access. We're building those relationships and getting more products approved on more platforms. Finally, the investor base matters: K-Series is built for accredited investors in the U.S., which is a small percentage of households, so our partnership with broader-distribution firms is important to reach a far larger base over time. We think this is a healthy educational period and are comfortable investing to expand distribution and awareness.

Our next question comes from Brennan Hawken with BMO Capital Markets.

You reiterated the earnings target for Strategic Holdings in your prepared remarks and said it's back-end loaded, but it looks quite hockey-stick-like. I'd love to know what drives your confidence. Also, some investors worry that investments in that portfolio could be at risk from AI — business services and other sectors trading as though they have disruption risk. Taking a wider lens on AI risk, how would you address those concerns for the Strategic Holdings portfolio?

Thanks, Brennan. When we first introduced Strategic Holdings a couple of years ago, we noted it was still relatively early in scale. We said you'd see more quarter-to-quarter variability in the early years, and as we build toward $1.5 billion-plus of operating earnings by 2030, we expect more stability. We described 2026 as back-end weighted and that has played out. Looking to the back half of the year, we have a lot of confidence in delivering the operating earnings we outlined. As to AI risk, the portfolio is about 20 businesses with differentiated exposures. While some businesses could be impacted over time, we believe across the portfolio we're in good shape. You can also look at our monetization activity on Page 21 — there are winners and businesses that have generated strong returns alongside those that face challenges. We continually underwrite these businesses and monitor risk. Overall, the diversification and active management give us confidence in scaling Strategic Holdings earnings over time.

Our next question comes from Michael Cyprys with Morgan Stanley.

On private wealth, which has exceeded expectations despite recent volatility: as you look out over the next couple of years, what do you see as the greatest drivers of adoption rates and penetration within private wealth? Is it evolving technology, new wrappers, or something else that could meaningfully scale adoption more broadly in the channel?

Michael, it's Scott. The most important thing is education: advisers and clients need to understand what private markets are and the different forms — private equity, infrastructure, real estate, credit. We're running many KKR Academies to educate advisers and the process of spending time with them is driving adoption. Second, access and distribution matter — being on platforms and approved is critical. We're building those relationships globally and the number of platforms and RIAs where our products are available is accelerating. Third, the investor type matters: K-Series targets accredited investors in the U.S., which is a small subset of households. That's why partnerships with larger-distribution firms are important to reach broader audiences over time. We've invested a lot in these efforts and expect them to meaningfully expand adoption over the long term.

Our next question comes from Bart Dziarski with RBC Capital Markets.

You recently added Roy Gori as a senior adviser. Can you walk through the strategic rationale for that and how his experience as former CEO of Manulife could help you achieve your Investor Day target of doubling AUM?

Thanks, Bart. Roy did a remarkable job as CEO of Manulife; he built their Asia business and has lived and worked around the world. We first got to know him as a client and then enjoyed working with him. When he stepped down, we asked if he'd spend more time advising on KKR strategy, insurance and other topics. Global Atlantic today is largely U.S.-focused; our aspiration is to scale the franchise globally and Roy's experience will be helpful, particularly in Asia. We think he will make us better and help accelerate our strategic objectives.

Our next question comes from Bradley Hayes with TD Cowen.

You spoke to strong demand for private investment grade. Could you dig in a little more on your positioning against the opportunity and focus on the origination platforms in particular?

Bradley, the opportunity is massive. The addressable market in credit is very large and issuers are increasingly turning to private market solutions. We view private investment grade as encompassing our asset-based finance businesses, bespoke solutions for large corporates and long-duration investments across real estate. We have global capital organized through funds and SMAs, and our capital markets business overlays all of that. We benefit from collaboration across our teams, relationships across private equity and other teams, and 36 captive platforms across asset-based finance and real assets. We have decades of relationships, a capital markets capability, and a robust fundraising and pipeline environment. Since the acquisition of GA, our credit business has grown meaningfully and management fees tied to that growth have increased over threefold. We feel well positioned to address private IG at scale.

Brad, to zoom out, I categorize our businesses in three buckets. One, growth areas where we're already top three and can keep taking share by investing in platforms and talent — ABF fits here. Two, areas where industry's K-shaped and the winners take share from the weaker incumbents. Three, areas where scale and brand concentrate market share — wealth fits here. ABF sits in the first bucket and benefits from scale and persistent demand.

Our next question comes from Mike Brown with UBS.

Scott, Craig. I wanted to dig in on credit. This quarter we observed that management fees declined sequentially and AUM growth was relatively muted. Can you help unpack the primary drivers there? And how should we think about the trajectory in the second half in terms of net flows, management fees and the fee rate through the rest of the year?

Mike, quarter-to-quarter trends can be tricky. In our credit and liquid strategies business, there was a small one-time benefit that showed up in last quarter's management fee line. Over a 12-month period, management fees across credit and liquid strategies are up almost 10%. A better forward indicator is committed capital that is not yet earning fees; that number is up 33% year-over-year for our credit business. So while you may see some sequential variability, the forward fundamentals look healthy.

Our next question comes from Benjamin Budish with Barclays.

Rob, sometimes you give looking commentary on line of sight to transaction revenues and realizations. Can you give any color there? Given optimism around the ability to get transactions done even in this environment, I know you had previously referenced a $7 target. Is that possible on the table? I imagine you have a decent look into the next five months. How should we think about that?

Ben, for the quarter we've got plus or minus $700 million of monetization-related visibility, with some variability based on timing of carry crystallization. Split is roughly 80% realized performance revenue and 20% realized investment income. $700 million is a healthy number coming off a record monetization quarter. We have a pretty good pipeline for the remainder of the year. Regarding the $7 target, we removed formal guidance last quarter because it became a distraction. We'd prefer to focus on the facts: record earnings this quarter, adjusted net income per share up materially, and strong go-forward fundamentals. Whether that translates to $7 or a bit lower or higher isn't our primary focus; our focus is on continuing to perform and deliver outcomes for shareholders.

Our next question comes from Crispin Love with Piper Sandler.

On Insurance operating earnings: you've spoken to a $250 million plus or minus guide for 2026, and you're closer to about $290 million this quarter with roughly $40 million of gains. Can you discuss how that might trend in the back half of the year? Does the $250 million target still stand? Could you benefit sooner and break above those levels more consistently, and into 2027 could you see a step function higher?

A couple of building blocks: the $250 million plus or minus guide is still a good number for the go-forward. We had an elevated level of realizations in the quarter; I wouldn't assume that $40 million is a run rate. As our alternatives book continues to mature into the back half of this year and into 2027 and 2028, we believe we can see outcomes materially north of that level. Most important, we remain well positioned in insurance given our liability origination capability, asset origination and third-party capital. Page 17 of our release shows all-in insurance economics, which are up 13% year-on-year even though we've been allocating less capital, and that excludes mark-to-market on the alternatives portfolio.

Our next question is from Renu Gilat with BNP.

Could you talk more about the capital raised by Helix Digital Infrastructure? What is the final target size of this company and the mandate in the vehicle? In particular, will Helix invest in power or will these investments be provided by a partner? Is this company generally incremental to the $50 billion targeted deployment you announced a couple of years ago in conjunction with ECP?

Renu, a couple of points. A few years ago we discussed the partnership with ECP and the opportunity to bring collective skills to hyperscalers. This initiative is incremental and continues our evolution to address the massive CapEx needs of hyperscalers. Helix is structured as a company rather than a closed-end fund; we launched with more than $10 billion of initial long-duration committed capital from founding investors but expect ongoing discussions with additional investors. The mandate is broader than just data centers — it encompasses power, data centers and connectivity. We'll work with partners where appropriate but the intent is to be a one-stop shop for hyperscalers. Expect more updates over time.

To add, Helix is a company, not a fund; it's more permanent in nature. We don't have a fixed final target size; we launched with $10-plus billion and see the opportunity in the tens of billions. The mandate is to be a one-stop shop for hyperscalers — power, data centers and connectivity — and we expect to continue building scale over time.

We have reached the end of the question-and-answer session. I'd now like to turn the call back over to Craig Larson for closing comments.

Thank you, everybody, for your continued interest in KKR. Robert, thank you for your help. If anybody has follow-up questions, please feel free to reach out to us directly. Thank you, everyone.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.