There was little in narrow-moat KKR's first-quarter results that would alter our long-term view of the firm, and we expect to leave our $85 fair value estimate in place. We view the shares as slightly overvalued right now.
KKR, with $446.4 billion in fee-earning AUM at the end of 2023, is one of the go-to firms for institutional and high-net-worth investors looking for exposure to alternative assets.
Bears
Downturns in the equity and credit markets could leave potential investors in KKR's funds with limited liquidity and large commitments to other funds, making it more difficult for the firm to raise new capital.
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KKR & Co Inc is one of the world's largest alternative asset managers, with $552.8 billion in total managed assets, including $446.4 billion in fee-earning AUM, at the end of 2023. The company has two core segments: asset management (which includes private markets—private equity, credit, infrastructure, energy, and real estate—and public markets—primarily credit and hedge/investment fund platforms) and insurance (following the firm's initial investment in, and then ultimate purchase of, Global Atlantic Financial Group, which is engaged in retirement/annuity and life insurance lines as well as reinsurance). On the asset management side, private markets account for 50% of fee-earning AUM and 70% of base management fees, while public markets account for 50% and 30%, respectively.