KKR Boosts Earnings Forecast for Long-Term Private Equity Bets 

(Bloomberg) — KKR & Co. raised its forecast for earnings from long-term private equity wagers and announced that it will increase its ownership in three investments.Most Read from Bloomberg New York’s First ‘Passive House’ School Is a Model of Downtown Density State Farm Seeks Emergency California Rate Hike After LA Fires When French Communists Went on a Brutalist Building Boom Trump Paves the Way to Deputize Local Police on Immigration Historic London Elevator Faces Last Stop in Labour’s Housing Push The firm is boosting its stake in USI Insurance Services, 1-800 Contacts and Heartland Dental by a total of about $1.1 billion, KKR said Tuesday in a statement disclosing fourth-quarter results.That will lift operating earnings at its strategic holdings unit by $50 million to at least $350 million next year and by at least $100 million annually to $1.1 billion by 2030, the alternative asset manager said.“As we start 2025, we are leaning into our business model — asset management, insurance and strategic holdings,” KKR Co-Chief Executive Officers Joe Bae and Scott Nuttall said in the statement.KKR’s adjusted net income increased 33% to $1.2 billion, or $1.32 a share, beating the $1.28 average estimate of analysts surveyed by Bloomberg. Fee-related earnings rose 25% to $843 million, and assets under management increased 15% to $638 billion.Founded in 1976 by Henry Kravis, Jerome Kohlberg and George Roberts, KKR has grown beyond its private equity roots into an alternative-asset management giant with strategies including buyouts, credit, infrastructure, real estate and insurance.KKR, taking a cue from the business model of Warren Buffett’s Berkshire Hathaway Inc., created the strategic holdings unit at the end of 2023 to manage long-term private equity bets that generate dividends. It started reporting results from that unit separately in last year’s first quarter.Capital MarketsIts capital markets unit, which arranges debt and equity financing for companies, generated a record $1 billion of fees for the year, up from $577.6 million in 2023.Total fourth-quarter investing earnings, or income from selling assets, rose 52% to $399.4 million.Private equity and infrastructure both generated 14% returns for investors during 2024, while the firm’s opportunistic real estate portfolio gained just 4%. Leveraged credit rose 10% and alternative credit gained 12%.Shares of New York-based KKR returned 83% over the past year through Monday, outpacing its biggest peers, including Apollo Global Management Inc., Blackstone Inc. and Carlyle Group Inc.