Inside KKR (NYSE: KKR): $744B AUM, insurance growth and new segments
Filing Impact
Filing Sentiment
Form Type
10-K
KKR & Co. Inc. filed its annual report describing a large, diversified alternative asset manager with integrated insurance and capital markets businesses. As of December 31, 2025, KKR managed $744 billion in assets under management, including $219 billion from its Global Atlantic insurance platform.
The firm’s three main asset management lines are Private Equity with $229 billion of AUM, Real Assets with $192 billion, and Credit and Liquid Strategies with $322 billion. Management fees reached $4.1 billion in 2025, while capital markets transaction fees were $930 million, reflecting growth in fee-based revenues.
KKR also highlights its fully owned Global Atlantic insurance business, a newer Strategic Holdings segment that owns interests in 19 operating companies, and a capital allocation focus on strategic M&A, insurance, Strategic Holdings, and share repurchases. The company employed 5,043 people worldwide at year-end 2025.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K
For the fiscal year ended December 31 , 2025
or
For the Transition period from to .
Commission File Number 001-34820
(Exact name of Registrant as specified in its charter)
(State or other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
Telephone: (212 ) 750-8300
(Address, zip code, and telephone number, including
area code, of registrant's principal executive office.)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
4.625% Subordinated Notes due 2061 of KKR Group Finance Co. IX LLC | ||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 and 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12
months (or for such shorter period that the registrant was required to submit such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the
definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | ||
Non-accelerated filer | ☐ | Smaller reporting company | ||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under
Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error
to previously issued financial statements. □
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive
officers during the relevant recovery period pursuant to § 240.10D-1(b). □
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of common stock of the registrant held by non-affiliates as of June 30, 2025, was approximately $91.1 billion. As of February 24, 2026, the registrant had
DOCUMENTS INCORPORATED BY REFERENCE
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KKR & CO. INC.
FORM 10-K
For the Year Ended December 31, 2025
INDEX
Page No. | ||
PART I | ||
Item 1. | Business | 8 |
Item 1A. | Risk Factors | 31 |
Item 1B. | Unresolved Staff Comments | 80 |
Item 1C. | Cybersecurity | 80 |
Item 2. | Properties | 81 |
Item 3. | Legal Proceedings | 81 |
Item 4. | Mine Safety Disclosures | 81 |
PART II | ||
Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity | 82 |
Item 6. | [Reserved] | 83 |
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 84 |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 145 |
Item 8. | Financial Statements and Supplementary Data | 155 |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 295 |
Item 9A. | Controls and Procedures | 295 |
Item 9B. | Other Information | 296 |
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 296 |
PART III | ||
Item 10. | Directors, Executive Officers and Corporate Governance | 297 |
Item 11. | Executive Compensation | 305 |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 317 |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 319 |
Item 14. | Principal Accountant Fees and Services | 326 |
PART IV | ||
Item 15. | Exhibits and Financial Statement Schedules | 327 |
Item 16. | Form 10-K Summary | 339 |
SIGNATURES | 340 | |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which reflect our current views with respect to, among other things, our operations and financial performance. You can
identify these forward-looking statements by the use of words such as "outlook," "believe," "think," "expect," "potential,"
"continue," "may," "should," "seek," "approximately," "predict," "intend," "will," "plan," "estimate," "anticipate," “visibility,”
“positioned,” “path to,” “conviction,” the negative version of these words, other comparable words or other statements that
do not relate strictly to historical or factual matters. Without limiting the foregoing, forward-looking statements may include
statements regarding KKR’s business, financial condition, liquidity and results of operations, including capital invested,
uncalled commitments, cash and short-term investments, and levels of indebtedness; the potential for future business
growth; outstanding shares of common stock of KKR & Co. Inc. and its capital structure; non-GAAP and segment measures and
performance metrics, including assets under management (“AUM”), fee paying assets under management (“FPAUM”),
Adjusted Net Income, Total Operating Earnings, Total Segment Earnings, Fee Related Earnings ("FRE"), Insurance Operating
Earnings, Strategic Holdings Operating Earnings, Total Investing Earnings, and Total Segment Earnings; the declaration and
payment of dividends on capital stock of KKR & Co. Inc.; the timing, manner and volume of repurchase of shares of common
stock of KKR & Co. Inc.; our statements regarding the potential of, and future financial results from, KKR’s Strategic Holdings
segment, including expectations about dividend payments and earnings from companies and businesses in the Strategic
Holdings segment in the future, the future growth of such companies and businesses, and the potential for compounding
earnings over a longer period of time from such segment; KKR’s ability to grow its AUM, to deploy capital, to realize
unrealized investment appreciation, and the time period over which such events may occur; KKR’s ability to manage the
investments in and operations of acquired companies and businesses; the effects of any transactional activity on KKR’s
operating results, including pending sales of investments; expansion and growth opportunities and other synergies resulting
from acquisitions of companies, including the acquisition of Arctos Partners and businesses in our Strategic Holdings
segment), internal reorganizations or strategic partnerships with third parties; the timing and expected impact to our business
of any new investment fund, vehicle or product launches; the timing and completion of certain transactions contemplated by
the Reorganization Agreement entered into on October 8, 2021 by KKR & Co. Inc.; the implementation or execution of, or
results from, any strategic initiatives, including efforts to distribute financial products to individual investors; the modification
of our compensation framework announced on November 29, 2023, which decreased the targeted percentage of
compensation from fee related revenues and increased the targeted percentage from realized carried interest and certain
incentive fees; and our insurance business's strategic initiatives to invest more into non-yielding or lower-yield assets classes
like private equity and real assets, expand outside the United States, and raise more third-party co-investment insurance
capital. Forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important
factors that could cause actual outcomes or results to differ materially from those indicated in these statements or cause the
anticipated benefits and synergies from transactions to not be realized. We believe these factors include those described in
the section entitled "Risk Factors" in this Annual Report on Form 10-K for the year ended December 31, 2025 (our "report").
These factors should be read in conjunction with the other cautionary statements that are included in this report and in our
other filings with the U.S. Securities and Exchange Commission ("SEC"). We do not undertake any obligation to publicly update
or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except
as required by law.
CERTAIN TERMS USED IN THIS REPORT
In this report, references to "KKR," "we," "us," and "our" refer to KKR & Co. Inc. and its subsidiaries, including The Global
Atlantic Financial Group LLC ("TGAFG" and, together with its insurance companies and other subsidiaries, "Global Atlantic"),
unless the context requires otherwise.
References to the “Series I preferred stockholder” or “KKR Management” are to KKR Management LLP, the holder of the
sole outstanding share of our Series I preferred stock. KKR Management is owned by our senior employees, including Mr.
Henry Kravis and Mr. George Roberts (our "Co-Founders"). References to “carry pool participants” are to our current and
former employees who hold interests in our “carry pool,” which refers to the carried interest generated by KKR’s business that
is allocated to KKR Associates Holdings L.P. (“Associates Holdings”), in which carry pool participants are limited partners.
Associates Holdings is currently not a subsidiary of KKR & Co. Inc.
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KKR Group Partnership L.P. ("KKR Group Partnership") is the intermediate holding company that owns the entirety of
KKR’s business. Unless otherwise indicated, references to equity interests in KKR’s business, or to percentage interests in
KKR’s business, reflect the aggregate equity interests in KKR Group Partnership, and are net of amounts that have been
allocated to carry pool participants and any other holders of minority interests in KKR Group Partnership. References to a
“KKR Group Partnership Unit” refer to one Class A partner interest in KKR Group Partnership for periods on and after January
1, 2020. “Exchangeable securities” refers to securities that have the right to acquire KKR Group Partnership Units and to
exchange them for our shares of common stock. As of the date of this report, our only outstanding exchangeable securities
are (i) restricted holdings units issued through KKR Holdings II L.P. ("KKR Holdings II"), which are issued under the Amended
and Restated KKR & Co. Inc. 2019 Equity Incentive Plan (the "2019 Equity Incentive Plan"), and (ii) restricted holdings units
issued through KKR Holdings III L.P. ("KKR Holdings III"), which are not issued under the 2019 Equity Incentive Plan. In the
future, we may issue securities other than restricted holdings units that may constitute exchangeable securities.
On October 8, 2021, KKR entered into a Reorganization Agreement (the "Reorganization Agreement") with KKR Holdings
L.P. (“KKR Holdings”), KKR Management, Associates Holdings, and the other parties thereto. Pursuant to the Reorganization
Agreement, the parties agreed to undertake a series of integrated transactions to effect a number of transformative structural
and governance changes, including (a) the acquisition by KKR of KKR Holdings and all of the KKR Group Partnership Units held
by it (which as noted below was completed), (b) the future elimination of voting control by KKR Management and the Series I
preferred stock held by it, (c) the future establishment of voting rights for all common stock on a one vote per share basis,
including with respect to the election of directors, and (d) the future control of the carry pool by KKR. On May 31, 2022, KKR
completed the acquisition of KKR Holdings and the 258.3 million KKR Group Partnership Units held by it, and in exchange KKR
issued and delivered 266.8 million shares of common stock to the limited partners of KKR Holdings. On the "Sunset
Date" (which will occur no later than December 31, 2026), KKR will cancel the Series I preferred stock, establish voting rights
for all common stock on a one vote per share basis, and acquire control of the carry pool. For more information about the
Reorganization Agreement, see Note 1 "Organization" in our financial statements included in this report.
KKR’s asset management business is conducted by Kohlberg Kravis Roberts & Co. L.P. and various other subsidiaries of
KKR & Co. Inc. other than Global Atlantic. KKR’s insurance business is operated by Global Atlantic, in which KKR acquired a
majority controlling interest on February 1, 2021 and of which KKR acquired all the remaining equity interests in Global
Atlantic on January 2, 2024 (the “2024 GA Acquisition”). KJR Management ("KJRM") is a Japanese real estate asset manager,
which KKR acquired on April 28, 2022.
References to our "funds," "vehicles," or "investment vehicles" refer to a wide array of investment funds, vehicles, and
accounts that are advised, managed, or sponsored by one or more subsidiaries of KKR, including collateralized loan obligations
("CLOs"), certain operating companies, and business development companies (each, a "BDC"), unless the context requires
otherwise. These references do not include the investment funds, vehicles, or accounts of any hedge fund partnership or any
other third-party asset manager with which we have formed a strategic partnership or have acquired a minority ownership
interest. Unless the context requires otherwise, references to “fund investors” or "investors in our investment vehicles" refers
to the third-party investors in these funds and investment vehicles. References to “strategic investor partnerships” refers to
separately managed accounts with certain investors, which typically have investment periods longer than our traditional
funds and typically provide for investments across different investment strategies. References to “hedge fund partnerships”
refers to strategic partnerships with third-party hedge fund managers in which KKR owns a minority stake.
Unless otherwise indicated, references in this report to our outstanding common stock on a fully exchanged and diluted
basis reflect (i) actual shares of common stock outstanding, (ii) shares of common stock issuable pursuant to equity awards
actually granted pursuant to the 2019 Equity Incentive Plan, and (iii) shares of common stock issuable from exchangeable
securities, including vested partnership interests in KKR Holdings III. Our outstanding common stock on a fully exchanged and
diluted basis does not include shares of common stock available for issuance pursuant to the 2019 Equity Incentive Plan for
which equity awards have not yet been granted or any shares of common stock into which all outstanding shares of Series D
Mandatory Convertible Preferred Stock are convertible.
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In this report, the term "GAAP" refers to accounting principles generally accepted in the United States of America. We
disclose certain financial measures in this report that are calculated and presented using methodologies other than in
accordance with GAAP, including Adjusted Net Income, Total Asset Management Segment Revenues, Total Segment Earnings,
Total Investing Earnings, Total Operating Earnings, FRE, and Strategic Holdings Operating Earnings. We believe that providing
these performance measures on a supplemental basis to our GAAP results is helpful to stockholders in assessing the overall
performance of KKR's businesses. These non-GAAP financial measures should not be considered as a substitute for similar
financial measures calculated in accordance with GAAP. We caution readers that these non-GAAP financial measures may
differ from the calculations of other investment managers, and as a result, may not be comparable to similar measures
presented by other investment managers. Reconciliations of these non-GAAP financial measures to the most directly
comparable financial measures calculated and presented in accordance with GAAP, where applicable, are included under
"Management's Discussion and Analysis of Financial Condition and Results of Operations—Segment Balance Sheet Measures
—Reconciliations to GAAP Measures." This report also uses the terms AUM, FPAUM, and capital invested. You should note
that our calculations of these and other operating metrics may differ from the calculations of other investment managers and,
as a result, may not be comparable to similar metrics presented by other investment managers. These non-GAAP and
operating metrics are defined in the section "Management's Discussion and Analysis of Financial Condition and Results of
Operations—Key Segment and Non-GAAP Performance Measures—Other Terms and Capital Metrics."
The use of any defined term in this report to mean more than one entity, person, security, or other item collectively is
solely for convenience of reference and in no way implies that such entities, persons, securities, or other items are one
indistinguishable group. For example, notwithstanding the use of the defined terms "KKR," "we" and "our" in this report to
refer to KKR & Co. Inc. and its subsidiaries, each subsidiary of KKR & Co. Inc. is a standalone legal entity that is separate and
distinct from KKR & Co. Inc. and any of its other subsidiaries. Any KKR entity (including any Global Atlantic entity) referenced
herein is responsible for its own financial, contractual, and legal obligations. Additionally, references to "including" are for the
purpose of illustration and shall be read to mean "including without limitation" unless the context explicitly requires
otherwise.
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SUMMARY RISK FACTORS
The following is a summary of the risk factors associated with investing in our securities. You should read this summary
together with a more detailed description of these risks in the “Risk Factors” section of this report and in other filings that we
make from time to time with the SEC.
We are subject to risks related to our business, including risks involving:
•difficult market and economic conditions;
•geopolitical events, natural disasters and other similar events not within our control;
•the loss of, or misconduct by, our key personnel;
•our reliance on third parties in the operation of our business;
•disruptions in our technology infrastructure or the occurrence of other operational errors;
•effective management of our balance sheet;
•management of and access to adequate sources of liquidity;
•our capital markets activities;
•financial and enterprise risks;
•legal claims, litigations, investigations and negative publicity;
•expansion into new businesses, strategic opportunities, and investment strategies;
•operating in a highly competitive industry;
•variability in earnings and cash flow;
•contingent obligations to return carried interest;
•raising third-party capital for our investment vehicles, insurance business and transactions;
•raising capital from institutional investors;
•the sale of financial products to individual investors;
•possible reductions or other changes to perpetual capital;
•actions of our portfolio companies;
•changes in tax laws;
•impact of artificial intelligence;
•cybersecurity failures and data security breaches; and
•sustainability matters.
We are subject to risks related to regulatory matters, including risks involving:
•compliance with complex, extensive and evolving laws;
•adverse regulatory actions;
•our regulatory registrations or licenses;
•changes in the regulatory frameworks applicable to our business;
•availability of regulatory exemptions or exclusions;
•distributing financial products to individual investors;
•regulations impacting the insurance industry and insurance companies owned by alternative asset managers;
•laws and regulations applicable to our extensive global investment activities;
•compliance with investment-related and competition laws;
•compliance with financial crime laws;
•compliance with ERISA exemptions;
•sustainability-related laws and disclosure requirements; and
•privacy, data protection, cybersecurity, and artificial intelligence laws.
We are subject to risks related to our investment activities, including risks involving:
•historical returns not being indicative of future results;
•conditions and events not in our control that may significantly impact valuations of our investments;
•investments in illiquid assets and uncertainty in valuations of illiquid investments;
•investments that involve unique business, regulatory, legal, tax or other complexities;
•use of leverage in investment activities;
•limitations in the due diligence process;
•investments in real assets, including real estate, infrastructure and energy assets;
•investments in companies and assets outside of the United States;
•conflicts of interest arising from our investment activities; and
•our third-party investors failing to fund their capital calls.
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We are subject to risks related to our insurance activities, including risks involving:
•operating in highly competitive markets;
•identifying and managing significant growth opportunities for our insurance business;
•our ability to source successful reinsurance transactions;
•volatility in market and economic conditions;
•disruptions to our third-party distribution network for our insurance products;
•differences in assumptions and estimates used for our insurance business from our actual results;
•possible downgrades to financial strength or credit ratings of our insurance subsidiaries;
•ceding business to reinsurers as well as business ceded to us;
•changes in tax laws applicable to our insurance subsidiaries;
•comprehensive regulations (and potential changes and additions) applicable to our insurance business;
•capital regulations applicable to our insurance subsidiaries;
•regulatory and reputational considerations under the Bermuda insurance and reinsurance regulatory framework; and
•a failure to comply with statutory accounting rules.
We are subject to risks related to our organizational structure, including risks involving:
•the Series I preferred stockholder’s significant voting power, and potential conflicts of interest with the Series I
preferred stockholder, until the Sunset Date;
•exemptions as a “controlled company” from NYSE corporate governance requirements;
•provisions in our charter limiting the duties and liability of the Series I preferred stockholder;
•the exclusive forum provision included in our charter;
•limitations on our ability to pay periodic dividends;
•potential application of restrictions under the Investment Company Act of 1940;
•actions taken to implement the reorganization transactions that must occur by the Sunset Date; and
•anti-takeover provisions in our organizational documents.
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PART I
ITEM 1. BUSINESS
Overview
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance
solutions. We aim to generate attractive investment returns by following a patient and disciplined investment approach,
employing world-class people, and supporting growth in our portfolio companies and communities.
Founded in 1976, KKR pioneered the leveraged buyout strategy and has been a leader of the private equity industry for
five decades. Since the inception of our firm, we have expanded our investment strategies and product offerings from
traditional private equity to other alternative asset classes such as leveraged credit, alternative credit, infrastructure, real
estate, energy, growth equity, and core private equity. Over the same period, we scaled from being a U.S.-focused firm to a
global operation with 36 offices around the world as of December 31, 2025. Our business further expanded with the
acquisition of Global Atlantic in 2021, which today conducts our insurance business providing retirement and life insurance
solutions. As of December 31, 2025, we managed $744 billion of assets under management, of which $219 billion comes from
Global Atlantic.
50 Years | $744 billion in AUM | ~4,200 employees | Multi-asset experience | 36 global offices | ||||
of investment experience | across Credit and Liquid Strategies ($322 bn), Private Equity ($229 bn) & Real Assets ($192 bn) | ~2,700 Asset Management ~1,500 Insurance | across credit, private equity and real assets | across 4 continents serving local markets |
Note: The employee and office metrics exclude approximately 800 additional employees who sit within a subsidiary organization and who are located at other
offices. See the “Human Capital” section for more information.
We have a pre-eminent global integrated platform for sourcing and originating investments, raising capital, and carrying
out capital markets activities. Our experienced and diverse team of approximately 4,200 employees across asset management
and insurance, together with an additional approximately 800 employees across our subsidiary organizations, seek to work
proactively and collaboratively across business lines, departments, and geographies to achieve what we believe are the best
investment results for our clients.
We have multi-lingual and multi-cultural investment teams with local market knowledge and significant business,
investment, and operational experience in the countries in which we invest. We believe that our global capabilities and one-
firm philosophy have been critical to our success, enabling us to raise substantial capital, realize a greater number of
investment opportunities, assist our portfolio companies in their increasing reliance on global markets and sourcing, and
diversify our business and operations. Building on these efforts and leveraging both our industry expertise and intellectual
capital has also allowed us to capitalize on a broader range of the opportunities we source.
Our three reporting segments align with the KKR business model:
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Our business model of (i) Asset Management, (ii) Insurance, and (iii) Strategic Holdings corresponds to our three reporting
segments. We have purposely created a business model that we believe enables us to grow long-term, durable, recurring
earnings with a focus on large addressable markets where we can be an industry leader. Importantly, these pieces were built
to leverage our core strengths as a firm: investing acumen, capital allocation expertise and our collaborative culture.
Business Segments
Asset Management
In Asset Management, we have five business lines: (i) Private Equity, (ii) Real Assets, (iii) Credit and Liquid Strategies, (iv)
Capital Markets, and (v) Principal Activities.
Our Assets Under Management have grown and diversified in the last 15 years across Private Equity, Real Assets, and
Credit and Liquid Strategies as illustrated on the following chart. KKR has evolved from a relatively US-centric and traditional
private equity firm to a global alternative asset manager. As of December 31, 2010, our traditional Private Equity strategy
represented over 70% of our total AUM. As of December 31, 2025, traditional Private Equity was less than 25% of our total
AUM.
Assets Under Management ($ in billions):
Liquid Strategies
Alternative Credit
Credit and Liquid
Strategies
$322
+18%
CAGR
Leveraged Credit
Real Estate
Real Assets
$192
Infrastructure &
Energy
Growth Equity
Core Private Equity
Private Equity
$229
Traditional Private
Equity
As an asset management firm, we earn recurring management fees and fee-related performance revenues for providing
investment management services and expertise to our institutional and individual investors who entrust us with their capital.
The amount of fees we charge for managing these assets depends on the underlying investment strategy, liquidity profile, and
ultimately our ability to generate attractive investment returns for our clients.
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Growth and diversification of management fees: | ||
Management Fees Last Five Years ($ in billions) | 2025 Management Fees | |
$4.1 billion
We earn transaction fees for providing capital markets services as a broker-dealer, and we also earn transaction and
monitoring fees as part of the management of our portfolio companies.
Carried interest that we receive from our investment vehicles entitles us to a specified percentage of investment gains
that are generated on third-party capital that is invested. We earn investment income by investing our own capital alongside
investors in our funds and other investment vehicles and from other assets we own on our balance sheet.
Operating expenses, which include occupancy expenses and other typical operating expenses, are shared across a single
expense pool given the collaborative nature of our five business lines within Asset Management.
Our investment teams have deep industry knowledge and can utilize a substantial and diversified capital base; an
integrated global investment platform; the expertise of operating professionals and advisors; and a worldwide network of
business relationships that provide a significant source of investment opportunities, specialized knowledge for due diligence,
and substantial resources for creating value for stakeholders. These teams invest capital, much of which is long duration,
which provides us with significant flexibility to grow investments and be selective with exit opportunities. As of December 31,
2025, approximately 92% of our AUM consists of capital that has a duration of at least eight years at inception or longer,
including what we refer to as perpetual capital. Perpetual capital has an indefinite term with no predetermined requirement
to return invested capital to investors upon the realization of investments. This perpetual AUM, which is a sizable portion of
our total AUM, includes investment vehicles registered under the Investment Company Act of 1940 (the "Investment
Company Act"), certain unregistered investment vehicles offered to individual investors (such as our K-Series vehicles), and
listed companies like Crescent Energy Company (NYSE: CRGY) (“Crescent Energy”), as well as our Global Atlantic AUM. We
believe that these aspects of our business help us continue to grow our asset management business and deliver strong
investment performance in a variety of economic and market conditions.
Since our inception, one of our fundamental investment philosophies has been to align the interests of the firm and our
employees with the interests of our fund investors, portfolio companies, and other stakeholders. We achieve this by putting
our own capital behind our ideas. As of December 31, 2025, we and our employees and other personnel have approximately
$30 billion invested in or committed to our own funds and portfolio companies, including approximately $15 billion of capital
funded from our balance sheet, $10 billion of additional capital committed by our balance sheet to our investment funds and
other investment vehicles, $4 billion funded from personal investments, and $1 billion of additional capital commitments
from personal investments.
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Private Equity
Our Private Equity business line represents $229 billion of AUM and $151 billion of FPAUM as of December 31, 2025,
across traditional private equity, core private equity, and growth equity. These strategies invest capital for long-term capital
appreciation, either through controlling ownership of a company or strategic non-controlling minority positions. Our private
equity investment vehicles focus on a specific region – North America, EMEA, or Asia Pacific – or invest across regions.
Private Equity Select Key Metrics: | As of December 31, | |||||||||
($ in billions, unless specified otherwise) | 2021 | 2022 | 2023 | 2024 | 2025 | |||||
AUM | $174 | $165 | $176 | $195 | $229 | |||||
FPAUM | 88 | 102 | 108 | 120 | 151 | |||||
For the year ended, December 31, | ||||||||||
2021 | 2022 | 2023 | 2024 | 2025 | ||||||
New Capital Raised (AUM) | $44 | $18 | $7 | $18 | $27 | |||||
Capital Invested | 18 | 19 | 14 | 17 | 24 | |||||
Management Fees ($ in millions) | 967 | 1,188 | 1,286 | 1,376 | 1,529 | |||||
Our Private Equity business line consists of the following strategies:
Traditional Private Equity typically targets investments where we acquire control or significant influence over companies,
and may include management buyouts, public-to-private transactions, or corporate carve-outs. This includes a dedicated
strategy that targets investments in middle market companies. Our traditional private equity funds invest by specific
geography: North America, Europe, and Asia Pacific. As of December 31, 2025, traditional private equity AUM totals
$167 billion.
Core Private Equity typically targets investments in companies with a longer holding period and a lower anticipated risk
profile than traditional private equity investments. Core private equity investments are made in companies that we believe
are more stable and less cyclical and typically have lower average leverage over the investment holding period compared to
those in our traditional private equity funds. Our core private equity vehicles invest globally. As of December 31, 2025, core
private equity AUM totals $41 billion.
Growth Equity typically targets investments in companies that are earlier in their life cycle than would be typical for a
traditional private equity investment. Our growth equity funds invest across three distinct strategies: (i) technology, investing
across a variety of sub-sectors including application software, infrastructure software, cybersecurity, financial technology, and
consumer internet; (ii) health care, targeting various sub-sectors, including biopharmaceuticals, medical devices, diagnostics,
life science tools, health care information technology, and other services; and (iii) impact, investing globally in companies that
contribute toward one or more of the United Nations Sustainable Development Goals where financial performance and
societal impact are intrinsically linked. As of December 31, 2025, growth equity AUM totals $21 billion.
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Real Assets
Our Real Assets business line represents $192 billion of AUM and $163 billion of FPAUM as of December 31, 2025, across
infrastructure, real estate and energy. These strategies invest capital for long-term capital appreciation, current income
generation, or both. Our real assets investment vehicles focus on a specific region – North America, EMEA, or Asia Pacific – or
invest across regions.
Real Assets Select Key Metrics: | As of December 31, | |||||||||
($ in billions, unless specified otherwise) | 2021 | 2022 | 2023 | 2024 | 2025 | |||||
AUM | $83 | $119 | $131 | $166 | $192 | |||||
FPAUM | 67 | 104 | 112 | 140 | 163 | |||||
For the year ended, December 31, | ||||||||||
2021 | 2022 | 2023 | 2024 | 2025 | ||||||
New Capital Raised (AUM) | $39 | $29 | $16 | $40 | $34 | |||||
Capital Invested | 21 | 28 | 15 | 28 | 27 | |||||
Management Fees ($ in millions) | 437 | 680 | 826 | 993 | 1,301 | |||||
Our Real Assets business line consists of the following strategies:
Infrastructure seeks investment opportunities in existing assets and businesses that we believe are critical to the
functioning of the economy. Through this platform we have made investments around the world in sectors such as power and
utilities, energy, midstream, energy transition, transportation, asset leasing, water and wastewater, telecommunications
infrastructure, and social infrastructure. Over the past five years, our infrastructure business has scaled considerably with
AUM having increased from $17 billion as of December 31, 2020 to $100 billion as of December 31, 2025. Infrastructure
includes three sub-strategies listed below.
•Core+ infrastructure seeks to generate attractive risk-adjusted returns with low volatility and downside protection by
investing in infrastructure assets and businesses based in two geographic areas: (i) North America and Western
Europe and (ii) Asia Pacific.
•Core infrastructure focuses on investments with predominantly contracted or regulated cash flows in securities,
properties, and other assets primarily in North America and Western Europe.
•Climate Transition invests in infrastructure solutions to support energy transition globally.
Real Estate seeks real estate and real estate-related investment opportunities, including the ownership of commercial
and residential real estate or entities where the primary value resides in real property. We aim to be a global solutions
provider across the capital structure in the real estate industry around the world by partnering with real estate owners,
lenders, operators, and developers to provide flexible capital to respond to transaction-specific needs. We provide solutions
for residential, commercial and industrial assets. As of December 31, 2025, real estate AUM totals $86 billion, with detail on
the two sub-strategies listed below.
•Real estate credit lends across the risk return spectrum of investments secured by or relating to real property,
including senior mortgage loans, mezzanine loans and mortgage-backed securities in North America and Europe. As
of December 31, 2025, real estate credit AUM totals $45 billion.
•Real estate equity seeks core, core+ and opportunistic real estate investment opportunities by geography: North
America, Europe and Asia Pacific. As of December 31, 2025, real estate equity AUM totals $41 billion. This includes
$12 billion from the management of two publicly listed Japanese REITs through our subsidiary, KJRM.
Energy focuses primarily on the acquisition, development and operation of oil and natural gas properties in the United
States through our management of Crescent Energy, a publicly listed energy company. Energy AUM totals $6 billion as of
December 31, 2025.
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Credit and Liquid Strategies
Our Credit and Liquid Strategies business line represents $322 billion of AUM and $289 billion of FPAUM as of December
31, 2025, across leveraged credit, alternative credit, and our hedge fund platform.
Credit and Liquid Strategies Select Key Metrics: | As of December 31, | |||||||||
($ in billions, unless specified otherwise) | 2021 | 2022 | 2023 | 2024 | 2025 | |||||
AUM | $214 | $220 | $245 | $276 | $322 | |||||
FPAUM | 203 | 206 | 226 | 253 | 289 | |||||
For the year ended, December 31, | ||||||||||
2021 | 2022 | 2023 | 2024 | 2025 | ||||||
New Capital Raised (AUM) | $37 | $34 | $47 | $56 | $68 | |||||
Capital Invested | 34 | 25 | 15 | 39 | 44 | |||||
Management Fees ($ in millions) | 667 | 788 | 919 | 1,092 | 1,271 | |||||
Credit invests capital globally across North America, Europe, and Asia Pacific in a broad range of corporate debt and
collateral-backed investments in diverse sectors. Our Credit strategies consist of the following components, which in
aggregate total $288 billion of AUM as of December 31, 2025:
Leveraged Credit | Alternative Credit | |||||||||||||
Private Credit | Strategic Investments Group (“SIG”) | |||||||||||||
$145bn | •Leveraged Loans •High Yield Bonds •CLOs | $135bn | •Asset-Based Finance - $85bn •Corporate Credit - $50bn | $8bn | •Capital Solutions •Opportunities Funds | |||||||||
ASSETS UNDER MANAGEMENT | ASSETS UNDER MANAGEMENT | ASSETS UNDER MANAGEMENT | ||||||||||||
Leveraged Credit strategies seek to invest globally in assets such as leveraged loans, high yield and investment grade
bonds, and certain structured products such as CLOs. Within leveraged credit, we manage both single-asset class and multi-
asset class pools of capital. As of December 31, 2025, leveraged credit AUM totals $145 billion.
Alternative Credit consists of our private credit strategies and investments overseen by our credit platform’s strategic
investments group strategy. Private Credit consists of asset-based finance (or “ABF”) and corporate credit. Across these
strategies, we provide financing and capital solutions to high-quality corporates and asset owners around the world, spanning
both investment grade and non-investment grade opportunities. The alternative credit sub-strategies are detailed below.
•Asset-based finance focuses on multi-sector investments secured by portfolios of financial assets including consumer
and mortgage finance, commercial finance, contractual cash flows, and loans backed by hard assets across the risk-
return spectrum. We source and structure ABF investments through a combination of 20 captive origination
platforms, portfolio acquisitions and structured investments, which together create a diverse sourcing engine for ABF
deployment across both our high grade and opportunistic ABF strategies. ABF AUM has grown from $7 billion as of
December 31, 2020 to $85 billion as of December 31, 2025.
•Corporate credit focuses on directly originated private financing across the capital structure. Historically referred to
as direct lending, its scope has expanded alongside market evolution into corporate private credit encompassing
senior-secured and junior debt, as well as investment grade financings. Corporate credit AUM totals $50 billion as of
December 31, 2025.
•SIG provides partnership capital solutions to high quality mid-to-large cap companies, typically in situations requiring
customized financing or strategic capital support. These investment opportunities may include senior and junior
debt, preferred equity, convertible debt and structured equity. SIG AUM totals $8 billion as of December 31, 2025.
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Liquid strategies, which is our hedge fund platform, consists of strategic partnerships with third-party hedge fund
managers in which KKR owns a minority stake. This principally consists of a 39.6% interest in Marshall Wace LLP, a global
alternative investment manager specializing in long/short equity products. We only report a pro-rata portion of the assets
under management of our hedge fund partnerships based on our percentage ownership in them. Liquid Strategies AUM totals
$34 billion as of December 31, 2025.
Capital Markets
Our Capital Markets business line is comprised of our global, but locally operated, capital markets business, which is
integrated with KKR’s asset management business, and serves our firm, including our portfolio companies, our insurance
business, and third-party customers by developing and implementing both traditional and non-traditional capital solutions for
investments and companies seeking financing. These services include arranging debt and equity financing, placing and
underwriting securities offerings, and providing other types of capital markets services that result in the firm receiving fees.
Our capital markets business underwrites credit facilities and arranges loan syndications and participations. When we are sole
or lead arrangers of a credit facility, we may advance amounts to the borrower on behalf of other lenders, subject to
repayment. When we underwrite an offering of securities on a firm commitment basis, we commit to buy and sell an issue of
securities and generate revenue by purchasing the securities at a discount or for a fee. When we act in an agency capacity or
best efforts basis, we generate revenue for arranging financing or placing securities with capital markets investors. We may
also provide issuers with capital markets advice on capital structuring, access to markets, marketing considerations, securities
pricing, and other aspects of capital markets transactions in exchange for a fee.
Our capital markets business also provides syndication services for co-investments in transactions participated in by KKR,
our investment vehicles, Global Atlantic, and third-party clients, which may entitle the firm to receive transaction fees,
management fees, and a carried interest. Third-party clients of our capital markets business include multi-national
corporations, public and private companies, financial sponsors, mutual funds, pension funds, sovereign wealth funds, and
hedge funds globally. Our capital markets business provides these clients with tailored financing solutions and differentiated
access to capital through our distribution platform.
Capital markets transaction fees are generated across multiple geographies and are diversified by source. Data presented
for the year ended December 31, 2025.
By Geography | By Source |
$930 million
$930 million
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Capital markets transaction fees ($ in millions) have grown substantially over time:
$757
$490
$184
Reflects the average capital markets transaction fees of the periods represented.
Principal Activities
Through our Principal Activities business line, we manage our firm’s asset management balance sheet. To create
alignment with our clients, we deploy our capital alongside their commitments to the investment vehicles we manage across
our Private Equity, Real Assets, and Credit and Liquid Strategies business lines. While it is typically a contractual requirement
that we, as the general partner of the funds we manage, make capital commitments to our funds, we believe making general
partner commitments also demonstrates our conviction in a given fund’s strategy. Our commitments to fund capital also
occur where we are the holder of the subordinated notes or the equity tranche of investment vehicles that we sponsor,
including structured transactions.
Over the last five years we have evolved our approach to the Principal Activities business line. While we continue to
deploy capital alongside our clients, the magnitude of our commitments has declined given both the successful scaling of our
investment vehicles, and therefore our business lines, and our decision to deploy capital from retained earnings into other
areas. See “Capital Allocation” section for more details.
The Investment Income generated in Principal Activities begins with our commitments to investment vehicles at their
outset. As those vehicles’ investments mature and are realized, they generate gains, losses, and interest and dividend income.
The deployment of capital alongside our clients this year is expected to create investment income multiple years from now.
We also use our own capital to bridge capital needs of our funds, to finance strategic asset management transactions,
and for underwriting purposes in our capital markets business line, although some or all of the financial results of these
actions may be reported in our other business lines. We may also make opportunistic investments through our Principal
Activities business line, which include co-investments alongside our Private Equity, Real Assets, and Credit funds, as well as
Principal Activities investments that do not involve those funds.
Investment Process
We maintain a rigorous investment process across all our investment strategies. Each investment vehicle has investment
policies and procedures that generally contain requirements, guidelines, and limitations for investments, such as limitations
relating to the amount that will be invested in any one investment and the types of assets, industries or geographic regions in
which the vehicle will invest. Our investment professionals are responsible for identifying, evaluating, underwriting,
diligencing, negotiating, executing, managing and exiting investments. Our investment committees, or similar committees,
review and evaluate investment opportunities using frameworks that are designed to include qualitative and quantitative
assessments of the key investment risks. Our investment professionals also have access to many advisors to assist them in this
process, including outside accountants, consultants, lawyers, investment banks, and industry experts.
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Our approach to investing focuses on achieving multiples of invested capital and attractive risk-adjusted internal rates of
return (“IRRs”) by selecting high-quality investments that we believe are attractive in price, applying rigorous standards of due
diligence when making investment decisions, implementing strategic and operational changes that drive growth and value
creation in acquired businesses depending on the asset class, carefully monitoring investments, and making informed
decisions when developing investment exit strategies.
We have developed a global network of experienced managers and operating professionals who can assist our portfolio
companies in making operational improvements and achieving growth. We augment these resources with operational
guidance from our operating professionals at KKR Capstone, executive advisors, senior advisors, industry experts, and other
advisors. In addition to leveraging the resources of the firm, our infrastructure, real estate, and energy investment teams
typically partner with technical experts and operators to manage our Real Assets investments.
Investment Vehicle Structures, Fee Arrangements and Carried Interest
Many investment funds that we sponsor and manage as the general partner have finite lives and investment periods.
These funds, called drawdown funds, typically receive commitments from our investors, known as limited partners, that are
drawn down over time. We also manage open-ended or evergreen investment vehicles that do not have a fixed termination
date. The following is a general description of our investment fund and vehicle lives.
•The terms of our drawdown private equity funds are typically 10 to 12 years from the date of the fund's first or last
investment, subject to a limited number of extensions with the consent of the limited partners. Our drawdown funds
for other asset classes have similar extension terms. The investment period for drawdown private equity funds
generally lasts up to six years depending on how quickly capital is deployed. The life of our core private equity funds
generally lasts for up to 25 years from the date of the first investment.
•Our infrastructure and real estate drawdown funds generally have investment periods of up to six years and
generally have a fund term of 10 to 13 years.
•The term of our drawdown credit funds generally lasts for 8 to 10 years and may last up to 12 years. The investment
period generally lasts four to five years depending on deployment pace.
•Open-ended or evergreen vehicles such as core infrastructure, core+ real estate, evergreen direct lending and the K-
Series vehicles do not have a fixed termination date.
The following is a general description of the management fees we earn. Management fees are generally based on an
annual rate but typically payable on a monthly or quarterly basis.
•Management fees for our drawdown private equity funds generally range from 1.0% to 2.0% of committed capital
during the fund's investment period and are generally 0.75% to 1.50% of invested capital after the expiration of the
fund's investment period, which causes these fees to be subsequently reduced as investments are liquidated.
•Management fees for drawdown infrastructure and real estate funds generally range from 0.75% to 1.50% and are
typically charged on committed capital during the investment period and on invested capital thereafter.
•Management fees for drawdown credit funds generally range from 0.85% to 1.50% of invested capital and vary
depending on the strategy and targeted return.
•Management fees for CLOs typically range from 0.4% to 0.5% based on asset value. Other leveraged credit
management fees typically range from 0.4% to 0.8%.
•Open-ended or evergreen vehicles such as core infrastructure, core+ real estate, evergreen direct lending and the K-
Series vehicles generally have management fees ranging from 0.50% to 1.25% of gross or net asset value, or equity
value.
We also enter into monitoring agreements with our portfolio companies pursuant to which we receive periodic
monitoring fees in exchange for providing them with management, consulting, and other services. Monitoring agreements
may provide for a termination payment following an initial public offering or change of control, if certain criteria are satisfied.
We also typically receive transaction fees for providing portfolio companies with financial, advisory, and other services in
connection with specific transactions. In some cases, we may be entitled to break-up or other fees that are paid when a
potential investment is not consummated. Since 2014, our fund agreements typically require us to share 100% of any
monitoring, transaction, and break-up fees that are allocable to a fund (after reduction for “broken deal” expenses) with fund
investors, therefore these types of fees, when generated, are uniquely driven by co-investment opportunities.
KKR receives a performance participation allocation from many of our open-ended or evergreen vehicles subject to a
preferred return and a high-water mark. These fees are known as Fee Related Performance Revenues.
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KKR is generally entitled to a carried interest that allocates 10 to 20% of the net profits realized by the limited partners
from the fund’s investments depending on the asset class. For most carry funds, the carried interest is subject to a preferred
return or hurdle generally ranging from 6 to 8%, subject to a catch-up allocation to us as the general partner. The timing of
receipt of carried interest is dictated by multiple factors including, but not limited to: (i) a realization event has occurred, (ii)
the fund has achieved positive overall investment returns since its inception, in excess of performance hurdles where
applicable, and (iii) with respect to investments with a fair value below cost, cost has been returned to fund investors in an
amount sufficient to reduce remaining cost to the investments' fair value.
For a fund that has an overall fair value above cost, and may otherwise be accruing carried interest, but has one or more
investments where fair value is below cost, the shortfall between cost and fair value for such investments is referred to as a
"netting hole." When netting holes are present, realized gains on individual investments that would otherwise allow us to
receive carried interest distributions are instead used to “fill” a netting hole by returning invested capital to our funds' limited
partners in an amount equal to the netting hole. We monitor netting holes in determining the timing of when the general
partner of a fund distributes carried interest to mitigate the risk of a future “clawback” obligation where the general partner
must return previously paid carried interest to the funds’ limited partners.
For a further discussion of netting holes and clawback obligations, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations “—Liquidity—Sources of Liquidity", “—Critical Accounting Policies and Estimates
—Critical Accounting Policies and Estimates – Asset Management—Revenues—Capital Allocation-Based Income (Loss)", and
"Risk Factors—Risks Related to Our Business—The "clawback" provisions in the agreements governing our carry-paying funds
have in the past and may in the future give rise to a contingent obligation that requires us to return or contribute significant
cash amounts to our funds and fund investors."
All of our investment management services and terms are governed by management agreements with KKR or specific KKR
subsidiaries registered as investment advisers. For further information about the regulation of our subsidiaries involved in the
asset management business, please see "—Regulation".
Investor Base and Fundraising
We have a broad investor base across institutions and individual investors spanning 65 countries. Our institutional
investor base is diversified by type, including public and corporate pension funds, insurance companies, sovereign wealth
funds, endowments, foundations, and investment managers. As our Assets Under Management grow, the types and numbers
of investors who entrust us with their capital continue to diversify and scale across client segments and geographies.
Composition of AUM by investor type as of December 31, 2025:
(1) “Other” largely includes our general partner positions in our own investment vehicles and select publicly traded vehicles.
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Over the last five years, we have focused on private wealth as a key addressable market and as a result, we have devoted
significant resources to designing and offering investment solutions to individual investors. Our private wealth capital comes
from multiple sources, including wirehouses, independent broker-dealers, registered investment advisers, global private
banks, and family offices, amongst others. These investors allocate capital to KKR across both drawdown vehicles and
evergreen vehicles, such as our K-Series vehicles. We also have a strategic partnership with Capital Group, a privately owned
U.S. investment management firm, which provides access to KKR investment capabilities through Capital Group sponsored
vehicles.
•K-Series: The K-Series suite of vehicles are offered through various distribution channels to investors in the U.S. and
other jurisdictions around the world. We have K-Series vehicles that operate or invest in private equity companies,
infrastructure assets, credit investments, and real estate. As of December 31, 2025, total K-Series AUM was $34
billion, which has grown significantly over the past three years.
K-Series AUM ($ in billions):
•Capital Group Strategic Partnership: Our two fixed income public-private solutions created in collaboration with
Capital Group launched in April 2025. Additionally, Capital Group offers a public-private equity product, which as part
of its private side strategy invests in a K-Series private equity vehicle, as well as in private equity co-investment
opportunities. We have announced the development of additional offerings alongside Capital Group that will seek to
broaden private market access for retirement savers via target date fund solutions and public-private model
portfolios.
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Insurance
Our insurance business operates under the Global Atlantic brand. Global Atlantic is a leading retirement and life
insurance company, with an over 20-year track record of providing a broad suite of protection, legacy, and savings products to
customers and reinsurance solutions to clients across individual and institutional markets.
Prior to KKR’s involvement, Global Atlantic was founded at Goldman Sachs in 2004 and was separated as an independent
company in 2013. KKR acquired a majority controlling interest in Global Atlantic on February 1, 2021 (approximately 60%), and
acquired the remainder of Global Atlantic on January 2, 2024, increasing our ownership to 100%.
2013
2021
2024
2004
Founded at Goldman Sachs
Separated as independent
company
Initial KKR Strategic
Acquisition (majority
owner)
KKR acquired remaining
stake (100% ownership)
Global Atlantic AUM since KKR’s acquisition ($ in billions):
Note: Global Atlantic FPAUM as of December 31, 2025 is $213 billion.
Global Atlantic primarily generates income by earning a spread between the investment income generated from
originated assets and the required cost of benefits payable to policyholders. Global Atlantic also earns fees paid by
policyholders on certain types of insurance contracts and fees paid by third-party investors, which are reported in our asset
management segment. As of December 31, 2025, Global Atlantic serves over 3.5 million policyholders.
Our investment expertise, broad range of investment management services, and strong origination capabilities are key to
generating attractive risk-adjusted returns for Global Atlantic. We seek to focus on investments for Global Atlantic that have
the potential to generate stable, predictable, long-dated asset cash flows, are of high credit quality, and that focus on capital
protection. These kinds of investments have historically consisted of corporate debt, structured products, transportation
assets, infrastructure assets, and commercial and residential real estate loans and securities, amongst other asset classes.
However, Global Atlantic’s investments are not limited to solely those asset classes. We believe that matching asset and
liability cash flows at Global Atlantic is key to protecting our policyholders and achieving our target returns for our insurance
business.
Global Atlantic operates in the following two complementary markets: individual and institutional. As of December 31,
2025, 41% of Global Atlantic’s reserves were in its individual markets and 59% were in its institutional markets. We believe
this diversification across liability types provides a strong risk mitigant for our insurance business.
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Individual Markets. We seek to reach individuals in the United States who are planning for or are already in retirement. The
individual markets products we offer are listed below.
•Fixed-Rate and Fixed-Indexed Annuities. With an annuity product, the policyholder provides Global Atlantic a cash
payment, in exchange for earning interest on a tax deferred basis and the ability based on contractual terms to take a
lump sum or periodic withdrawals of their account value. Fixed-rate annuities offer policyholders tax-deferred
savings accumulation and income based on a fixed rate that may be guaranteed for a period of time. Fixed-indexed
annuities also allow the policyholder to elect strategies where interest is credited based on the performance of a
market index. This selection allows the policyholder to participate in the upside performance of the selected index,
subject to limits and protection from downside market risks. We also increasingly offer registered index-linked
annuities, which has the potential for greater returns as well as potential principal loss unlike fixed-indexed annuities.
Our annuity products are distributed primarily through a network of distribution partners, including over 250 banks
and broker-dealers and approximately 200 independent marketing organizations.
•Preneed Life. For preneed life products, the policyholder generally purchases the insurance product along with a
contract with a funeral home. This insurance product guarantees the policyholder the payment of proceeds to pay
for a funeral. Our preneed life insurance products are distributed primarily through approximately 2,400 funeral
homes.
Institutional Markets. We provide our institutional clients with a range of customized solutions to assist them in meeting their
strategic, risk management, and capital goals. Our institutional solutions include block and flow reinsurance, pension risk
transfer (“PRT”), and funding agreements. Our reinsurance solutions are offered through a client coverage effort focused on
domestic and international retirement and life companies, including block and flow transactions with counterparties based in
Asia. Since Global Atlantic’s founding, it has closed reinsurance transactions with over 30 clients. By reinsuring policies, the
institutional client typically seeks to reduce or release capital that it held for the reinsured business so that it can use such
capital for other business goals. We also participate in the funding agreement market, including through our membership with
Federal Home Loan Banks ("FHLBs") and with our funding agreement backed notes ("FABN") program. The institutional
markets solutions we offer are listed below in more detail.
•Block reinsurance is a transaction in which an insurance company divests a block of policies to Global Atlantic in
exchange for Global Atlantic’s obligation to pay a specified portion of future insurance claims arising from that block
in exchange for a transfer of assets. Global Atlantic focuses on reinsuring retirement and life liabilities.
•Flow reinsurance is an agreement in which an insurance company writes new retail policies and shares an economic
portion of such newly issued policies with Global Atlantic, as its reinsurer, on an ongoing basis. Global Atlantic
operates in flow reinsurance by partnering with insurance companies that sell retirement products, such as multi-
year guaranteed annuities or single premium immediate annuities.
•PRT is a transaction in which a pension plan sponsor, such as a corporation, transfers the risk associated with the
pension plan’s liabilities to Global Atlantic. Global Atlantic directly underwrites PRT transactions and also operates in
the PRT market indirectly through reinsurance relationships with insurance company clients that directly underwrite
and assume corporate pension liabilities.
•Funding agreements, including funding agreements issued under Global Atlantic’s FABN program, direct funding
agreements sold to institutions, and funding agreements issued to the FHLB, are a deposit-type contract issued by
Global Atlantic. In general, a funding agreement provides its holder with a guaranteed return of principal and
periodic interest payments. As of December 31, 2025, Global Atlantic had $8 billion of funding agreements
outstanding under the FABN program.
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The following table represents Global Atlantic’s new business volumes by business and product for the last five years:
Years Ended December 31, | ||||||||||
($ in millions) | 2021 | 2022 | 2023 | 2024 | 2025 | |||||
Individual Channel (1): | ||||||||||
Retirement Products | $7,840 | $9,464 | $11,138 | $14,821 | $12,339 | |||||
Preneed Life | 245 | 277 | 299 | 605 | 1,139 | |||||
Institutional Channel (2)(3) | $26,165 | $18,377 | $22,622 | $27,115 | $20,953 | |||||
(1)New business volumes in individual markets are referred to as sales. In Global Atlantic's individual market channel, sales of annuities include all money
paid into new and existing contracts. Individual market channel sales for preneed life are based on the face amount of insurance and do not include the
recurring premiums that policyholders may pay over time.
(2)Block reinsurance transactions may be episodic and volumes may fluctuate. Similarly, funding agreements issued in the FABN program are subject to
capital markets conditions and volumes may fluctuate. Flow and pension risk transfer new business volumes typically occur throughout the year. See “—
Risks Related to Our Business—Parts of our earnings and cash flow are highly variable due to the nature of our business.”
(3)New business volumes from Global Atlantic’s institutional market channel are based on the assets assumed, net of any ceding commission, and are gross
of any retrocessions to investment vehicles that participate in qualifying reinsurance transactions sourced by Global Atlantic and to other third party
reinsurers.
Insurance Capital
Capital strength allows insurance companies to meet their future policyholder obligations and to support the growth of
their businesses. We believe Global Atlantic is well capitalized, and its capital position, combined with annual capital
generation from its seasoned in-force book of business - in addition to committed third-party capital commitments - will help
fund new business volume. We manage Global Atlantic’s capital and liquidity position with the objective of maintaining excess
capital and liquidity to be able to capture investment opportunities as they arise and meet policyholder obligations, even in
times of foreseeable stress.
The financial strength of Global Atlantic’s life insurance operating subsidiaries is rated highly by several ratings agencies.
The financial strength ratings of these subsidiaries are “A” with a stable outlook from A.M. Best Company, Inc. (“A.M. Best”),
“A2” with a stable outlook from Moody’s Investors Service, Inc. (“Moody’s”), “A” with a stable outlook from S&P Global
Ratings (“S&P”), and “A” with a stable outlook from Fitch Ratings, Inc. ("Fitch").
To support growth strategies and capital deployment opportunities, we also sponsor investment vehicles raised from
third-party capital, such as the Ivy investment vehicles, to participate alongside Global Atlantic’s institutional and individual
market activities. These Global Atlantic sponsored vehicles provide third-party capital to support various combinations of
reinsurance, insurance and other potentially strategic activities. As of December 31, 2025, $58 billion of Global Atlantic AUM
is provided by these Global Atlantic sponsored vehicles.
For further information about insurance business, which is subject to substantial regulation, please see "—Regulation".
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Strategic Holdings
Our Strategic Holdings segment, which we started reporting in the first quarter of 2024, acquires and manages interests
in operating companies that are owned by the firm. Today, those companies primarily consist of our participation in our core
private equity strategy. We have acquired, and in the future we expect to continue to acquire, other long-term assets outside
of, and in addition to, our participation in our core private equity strategy. Strategic Holdings is not limited to acquiring
companies in specific industries. We intend to hold the companies in our Strategic Holdings segment over a longer period of
time, and we believe most of these companies generally have a lower risk profile than would be typical for an investment
through our traditional private equity strategy. We currently expect our Strategic Holdings segment primarily to generate
income from the receipt of dividends from our ownership stakes in these businesses and, upon the sale of any ownership
stake, realized investment income from such sale. As of December 31, 2025, our Strategic Holdings segment consisted of our
ownership stakes in 19 companies.
The fees and carried interest paid by the third party investors in our core private equity funds continue to be reported in
our Asset Management segment and are not reported in our Strategic Holdings segment. Our Asset Management segment
charges a quarterly management fee in our Strategic Holdings segment. Additionally, our Asset Management segment charges
a performance fee from the sale of our interests in the companies included in our Strategic Holdings segment. The
management and performance fees are charged in order to represent the cost of providing advisory services by our Asset
Management segment rather than determining the allocable costs borne by our Asset Management segment to support our
Strategic Holdings segment.
Based on information made available to management as of December 31, 2025, the following represents KKR’s pro-rata
portion of LTM Adjusted EBITDA(1) of operating companies in Strategic Holdings as of September 30, 2025:
By Geography | By Industry |
Based on information made available to management as of December 31, 2025, the following represents KKR’s pro-rata
portion of LTM Adjusted Revenue(1) and LTM Adjusted EBITDA(1) of operating companies in Strategic Holdings as of September
30, 2025:
Adjusted Revenue(1) | Adjusted EBITDA(1) | |
$4.4 billion | $1.1 billion |
(1)Represents the measure(s) management currently uses to monitor the operating performance of the businesses that are carried on a fair value basis with
dividends recognized in Strategic Holdings Operating Earnings.
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Capital Allocation
Our current capital allocation framework focuses primarily on investing our excess earnings back into KKR with the goal of
generating recurring and durable growth-oriented earnings per share. KKR employees own approximately 30% of outstanding
shares of common stock of KKR & Co. Inc. (assuming the exchange of all vested equity for common stock) as of December 31,
2025. With this significant level of ownership, we believe that our allocation decisions are aligned with our common
stockholders and that we are focused on where we can generate long-term shareholder value. Our framework is focused on
four key areas for allocating our capital, including to: strategic M&A, Insurance, Strategic Holdings, and share repurchases.
Sustainability
In our experience, the thoughtful review and management of sustainability, regulatory, and geopolitical issues can be an
essential part of long-term business success. We believe incorporating such business-relevant issues in our investment
process can help us both protect and create value. Where appropriate we seek to invest responsibly by incorporating
sustainability, regulatory, and geopolitical considerations into our investment decision-making and investment management
practices using an approach that prioritizes business-relevant topics that KKR considers most significant for creating,
maximizing and protecting the value of our portfolio companies and assets. One example is KKR’s support of the
implementation of broad-based employee ownership programs at its portfolio companies with the goal of improving their
financial performance through employee engagement and financial inclusion. As of December 31, 2025, more than 80 current
or former KKR portfolio companies have in aggregate awarded billions of dollars in equity to over 180,000 non-senior
management employees.
Our Responsible Investment Policy, which is publicly available, articulates KKR’s responsible investment framework and
approaches that KKR believes are broadly relevant for each asset class. Our annual Sustainability Report and other
sustainability disclosures, which are also publicly available on our website, provide further details about our approach to
integrating sustainability across our investments and operations.
Human Capital
We believe our people and our culture are critical to our success and differentiate our firm. We strive to create a
workplace environment where employees thrive both professionally and personally. At KKR, our philosophy is to ensure we
rigorously and effectively invest in our people throughout their careers. Our key focuses include driving exceptional
performance and enhancing our firm's culture of collaboration. Our teams operate with a distinct culture that rewards
investment discipline, creativity, determination, and patience, and emphasizes the sharing of information, resources,
expertise and best practices across offices and asset classes.
We believe our one-firm approach helps ensure we share responsibility and success. This approach extends to our
compensation program, which is based on the performance of KKR as a whole, in addition to an individual’s contributions. Our
assessment, pay, promotion, and succession processes are designed to engage and reward employees, and we believe that
this structure promotes collaboration and resource sharing, encourages shared accountability, and aligns interests across all
of our stakeholders. Employees typically receive a base salary and may be eligible for a discretionary cash bonus and
discretionary equity compensation. Select employees are also eligible to receive an incentive allocation in our carry pool. Our
equity awards are an important element of our compensation program. These awards help attract highly skilled people in our
highly competitive industry, encourage retention, and align the financial interests of our employees with the firm. We believe
that providing an equity stake in the future success of our business motivates employees to achieve long-term business goals
and to increase stockholder value.
The primary objective of human capital management at KKR is to attract, develop, and retain exceptional talent by
providing everyone with meaningful and well-understood careers with an emphasis on employee training and professional
development. Where appropriate, we offer workshops, mentoring, and executive coaching to supplement on-the-job
experiences and ongoing feedback and coaching to maximize performance. We also prioritize physical, mental, and emotional
health and wellness, and offer a variety of tools and resources to our employees so they can make informed health care
decisions for themselves and their families.
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KKR seeks to actively invest in our communities and engage our employees and other stakeholders in impactful
citizenship efforts. KKR offers philanthropic, volunteer, and other forms of engagement to strengthen communities and
expand opportunity around the globe. KKR hosts volunteer events and provides grants for matching gifts and volunteer
rewards each year. KKR is proud to amplify the efforts of employees, supporting the communities in which they live and the
causes and organizations of greatest importance to them.
As a people driven business, we believe a breadth of perspectives, skills, and experiences working together
collaboratively is the most effective means of producing exceptional results. We pursue this aspiration through our various
internal committees, strategic external partnerships, and broader engagement in different communities. We believe this
multi-faceted approach enhances our opportunity to attract, develop, and retain the best possible talent, which we believe is
integral to our success.
As of December 31, 2025, we employed 5,043 people worldwide(1):
Asset Management | 2,705 |
Insurance | 1,491 |
Subsidiary Organizations (2) | 847 |
Total Employees | 5,043 |
(1)The employment headcount categories above align with our internal human capital headcount reporting and may differ in certain aspects with respect to
our employees who are responsible for generating the financial results within each of our three reporting segments. Certain employees reported in the
separate categories above, including our business operations professionals, may also perform certain functions in support of another headcount category.
Our strategic holdings segment is supported by employees within the asset management headcount category.
(2)Includes employees from certain of our majority owned and controlled subsidiaries such as KJRM and K-Star.
Our asset management employees includes investment, capital markets, and capital raising professionals, our team of
operating professionals at KKR Capstone, and our business operations professionals (some of whom may also support our
insurance business). As of December 31, 2025, we employed approximately 980 asset management professionals, including
those in investments, capital markets, and KKR Capstone operating roles.
Competition
Our asset management and capital markets businesses operate in an intensely competitive industry. We compete
globally and on a regional, industry and product-specific basis. The firm's competitors consist primarily of traditional and
alternative asset managers that sponsor public and private investment vehicles, investment banks (including activities
conducted by their broker-dealers and investment advisers), commercial finance companies, and operating companies acting
as strategic buyers. These competitors compete with us on a global basis, and we also face competition from local and
regional firms, financial institutions, and sovereign wealth funds in the various countries in which we invest.
We believe that competition for fundraising for institutional and individual investor capital is based on a variety of
factors, including investment performance, investor liquidity and willingness to invest, investor reputation, including focus
and alignment of interest, duration of relationships, quality of services, and pricing and fund terms, including fees.
We believe that competition for investment opportunities and capital markets transactions is based primarily on pricing,
terms, and structure of a proposed transaction and certainty of execution.
Our insurance business also operates in a highly competitive industry, with a variety of competition from large and small
industry participants, including life and annuities businesses owned by or with strategic partnerships with alternative asset
managers. We believe competition in the individual market business is based on a variety of factors, including initial crediting
rates, reputation, product features, customer service, distribution capabilities and financial strength ratings. We believe
competition in the institutional market business is also based on a variety of factors, including: execution track record,
underwriting expertise, access to capital, counterparty creditworthiness, reputation, structuring capabilities, and client and
regulatory relationships.
Competition is also intense for the attraction and retention of qualified employees. Our ability to continue to compete
effectively within our industries will depend upon our ability to attract new employees and retain and motivate our existing
employees.
For additional information regarding the level of competition we face, see "Risk Factors—Risks Related to Our Business—
We operate in a highly competitive industry.”
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Organizational Structure
The following simplified diagram, which excludes multiple legal entities, illustrates our organizational structure as of
February 27, 2026.
(1)KKR Management LLP, which is owned by senior KKR employees, is the sole holder of Series I preferred stock of KKR & Co. Inc. The Series I preferred
stock will be redeemed and cancelled, and KKR & Co. Inc.'s common stock will become vested with all common voting powers on a one vote per share
basis, on the "Sunset Date" (which will be no later than December 31, 2026 as provided in the Reorganization Agreement); see "Part III—Item 13.
Certain Relationships and Related Transactions, and Director Independence" in this report.
(2)Carried interest earned from our investment funds is allocated to KKR Associates Holdings L.P., which we refer to as the carry pool, from which up to
80% of the carried interest that is earned from our investment funds is allocable to our employees and other persons. A wholly-owned subsidiary of KKR
& Co. Inc. will control the carry pool on the "Sunset Date". KKR Associates Holdings L.P. is indirectly a limited partner of KKR Group Partnership L.P.
Other limited partners of KKR Group Partnership L.P. include KKR Holdings II, KKR Holdings III, and KKR Group Holdings L.P. (formerly KKR Holdings),
which is majority-owned by KKR Group Co. Inc.
(3)Includes Kohlberg Kravis Roberts & Co. L.P., an SEC-registered investment adviser, which in turn is the parent company of certain other investment
management and broker-dealer subsidiaries.
(4)Includes our insurance business operated by Global Atlantic.
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Regulation
We are required to comply with numerous laws and regulations applicable to our business in various countries around
the world. Our compliance with these laws and regulations is critical to our ability to operate our business, and the potential
failure to comply subjects us to many material risks and uncertainties. The level of regulation and supervision to which we are
subject varies from jurisdiction to jurisdiction and is based on, among other things, the type of business activity involved. We,
in conjunction with our outside advisors and counsel, seek to manage our business and operations in compliance with such
regulation and supervision. The regulatory and legal requirements that apply to our activities are subject to change from time
to time and may become more restrictive, which may make compliance with applicable requirements more difficult or
expensive or otherwise restrict our ability to conduct our business activities in the manner in which they are now conducted.
Changes in applicable regulatory and legal requirements, including changes in their enforcement, could materially and
adversely affect our business and our financial condition and results of operations. As a matter of public policy, the regulatory
bodies that regulate our business activities are generally responsible for safeguarding the integrity of the securities, insurance
and financial markets and protecting fund investors and policyholders who participate in those markets rather than protecting
the interests of our stockholders. For further information regarding potential risks relating to these and other regulatory and
legal requirements that could significantly affect our business, see the "Risk Factors" section of this report, including "—Risks
Related to Regulatory Matters."
United States
Regulation as an Investment Adviser
We conduct our advisory business through our investment adviser subsidiaries, including Kohlberg Kravis Roberts & Co.
L.P., KKR Credit Advisors (US) LLC, KKR Registered Advisor LLC and KKR Credit Advisors (Singapore) Pte. Ltd., each of which is
registered as an investment adviser with the SEC under the Investment Advisers Act of 1940 (the "Investment Advisers Act").
We also jointly own with a third party FS/KKR Advisor, LLC, which is an investment adviser registered with the SEC under the
Investment Advisers Act. In addition, we own Global Atlantic's investment adviser, Global Atlantic Investment Advisors, LLC,
which is another investment adviser registered with the SEC under the Investment Advisers Act. The investment advisers are
subject to, among other Investment Advisers Act provisions, the anti-fraud provisions of the Investment Advisers Act and to
fiduciary duties derived from these provisions, which apply to our relationships with our advisory clients globally, including
funds that we manage. These provisions and duties impose restrictions and obligations on us with respect to our dealings with
our fund investors and our investments, including for example restrictions on agency cross and principal transactions. Our
registered investment advisers are subject to periodic SEC examinations and other requirements under the Investment
Advisers Act and related regulations primarily intended to benefit advisory clients. These additional requirements relate,
among other things, to maintaining an effective and comprehensive compliance program, record-keeping and reporting
requirements, and disclosure requirements. The Investment Advisers Act generally grants the SEC broad administrative
powers, including the power to limit or restrict an investment adviser from conducting advisory activities in the event it fails
to comply with federal securities laws. Additional sanctions that may be imposed for failure to comply with applicable
requirements include the prohibition of individuals from associating with an investment adviser, the revocation or suspension
of registrations, and other censures and fines.
KKR Credit Advisors (US) LLC, KKR Registered Advisor LLC and Kohlberg Kravis Roberts & Co. L.P. are also subject to
regulation as investment advisers to investment companies registered under the Investment Company Act and such
registered investment companies, "RICs"). RICs advised by our investment advisers include KKR Income Opportunities Fund
(NYSE: KIO), KKR Asset-Based Finance Fund (an interval fund) and KKR Real Estate Select Trust Inc. (a tender offer fund). RICs
sub-advised by our investment advisers include Capital Group KKR Core Plus+ and Capital Group KKR Multi-Sector+. The
Investment Company Act and the rules thereunder, among other things, regulate the relationship between a registered
investment company and its investment adviser and prohibit or restrict principal transactions and joint transactions. FS/KKR
Advisor serves as investment adviser to FS KKR Capital Corp. (NYSE: FSK), a publicly listed BDC, KKR FS Income Trust, a
privately-offered BDC, and KKR FS Income Trust Select, a privately-offered BDC, which are subject to regulations applicable to
BDCs under the Investment Company Act, including portfolio construction requirements and limitations on transactions with
affiliates. Certain subsidiaries of Kohlberg Kravis Roberts & Co. L.P. also serve as investment advisers to publicly listed
companies, including KKR Real Estate Finance Trust Inc. (NYSE: KREF) and Crescent Energy (NYSE: CRGY). Our investment
advisers registered under the Investment Advisers Act may also act as sub-advisors to investment companies, including KKR
Credit Advisors (US) LLC, which serves as the investment sub-adviser to an Australian listed investment trust, KKR Credit
Income Fund (ASX: KKC).
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Regulation as a Broker-Dealer
KKR Capital Markets, LLC, one of our subsidiaries, is registered as a broker-dealer with the SEC under the Exchange Act
and in 53 U.S. states and territories, and is a member of FINRA. Global Atlantic's distribution of insurance products that are
regulated as securities is conducted by Global Atlantic Distributors, LLC, which is also registered as a broker-dealer with the
SEC under the Securities Exchange Act of 1934 and in 52 U.S. states and territories, and is also a member of the FINRA. As
registered broker-dealers, KKR Capital Markets, LLC and Global Atlantic Distributors, LLC are subject to periodic SEC, state and
FINRA examinations and reviews. A broker-dealer is subject to legal requirements covering all aspects of its securities
business, including sales and trading practices, public and private securities offerings, the suitability of investments, use and
safekeeping of customers' funds and securities, capital structure, record-keeping and retention, and the conduct and
qualifications of directors, officers, employees, and other associated persons. These requirements include the SEC's "uniform
net capital rule," which specifies the minimum level of net capital that a broker-dealer must maintain, requires a significant
part of the broker-dealer's assets to be kept in relatively liquid form, imposes certain requirements that may have the effect
of prohibiting a broker-dealer from distributing or withdrawing its capital and subjects any distributions or withdrawals of
capital by a broker-dealer to notice requirements. These and other requirements also include rules that limit a broker-dealer's
ratio of subordinated debt to equity in its regulatory capital composition, constrain a broker-dealer's ability to expand its
business under certain circumstances and impose additional requirements when the broker-dealer participates in securities
offerings of affiliated entities. Violations of these requirements may result in censures, fines, the issuance of cease-and-desist
orders, revocation of licenses or registrations, the suspension or expulsion from the securities industry of the broker-dealer or
its officers or employees or other similar consequences by regulatory bodies.
Insurance Regulation
Our U.S. insurance subsidiaries are subject to regulation and supervision under U.S. federal and state laws. Each U.S.
state, the District of Columbia and U.S. territories and possessions have insurance laws that apply to companies licensed to
carry on an insurance business in the applicable jurisdiction. The primary regulator of an insurance company, however, is
located in the insurance company's state of domicile. Both Commonwealth Annuity and Life Insurance Company and First
Allmerica Financial Life Insurance Company are organized and domiciled in the Commonwealth of Massachusetts; Accordia
Life and Annuity Company ("Accordia") is organized and domiciled in the State of Iowa; and Forethought Life Insurance
Company is organized and domiciled in the State of Indiana (together, these four companies constitute our "U.S. insurance
subsidiaries"). Additionally, our U.S. insurance subsidiaries are licensed to transact insurance business in, and are subject to
regulation and supervision by, all 50 states of the United States, the District of Columbia, Puerto Rico, and the U.S. Virgin
Islands.
State insurance authorities have broad administrative powers over each of our U.S. insurance subsidiaries with respect to
all aspects of the insurance business. Insurance subsidiaries must prepare financial statements on regulatory capital in
accordance with statutory financial accounting, must report on their risk management and corporate governance and must
receive regulatory approval for certain transactions, including transactions with affiliates. As part of their routine regulatory
oversight process, state insurance departments conduct periodic detailed examinations of the books, records, accounts and
operations of insurance companies that are domiciled in their states. Examinations are generally carried out in cooperation
with the insurance departments of other, non-domiciliary states under guidelines promulgated by the National Association of
Insurance Commissioners (the "NAIC"). State insurance departments also regularly conduct regulatory inquiries of the
insurance companies licensed in their states.
We also have special purpose financial captive insurance company subsidiaries domiciled in Vermont and Iowa that
provide reinsurance to Accordia in order to facilitate the financing of redundant reserve requirements associated with the
application of the NAIC Model Regulation entitled "Valuation of Life Insurance Policies Model Regulation" ("Regulation XXX")
and NAIC Actuarial Guideline XXXVIII ("AG38"). The application of both Regulation XXX and AG38 requires Global Atlantic to
maintain statutory reserves which may be in excess of reserves required under GAAP.
The rates, policy terms, and conditions of reinsurance agreements generally are not subject to regulation by any
regulatory authority. However, the ability of a primary insurer to take credit for the reinsurance purchased from reinsurance
companies is a significant component of reinsurance regulation. Typically, a primary insurer will only enter into a reinsurance
agreement if it can obtain credit against its reserves on its statutory basis financial statements for the reinsurance ceded to
the reinsurer.
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Our U.S. insurance subsidiaries are subject to restrictions on the payment of dividends. Any proposed dividend in excess
of the amount permitted by law is considered an "extraordinary dividend or distribution" and may not be paid until it has
been approved, or a 30-day waiting period has passed during which it has not been disapproved, by the commissioner of the
applicable domiciliary state of the U.S. insurance subsidiary. None of our special purpose financial captive insurance company
subsidiaries may declare or pay dividends or distributions in any form to us other than in accordance with its transaction
agreements and governing licensing order.
State insurance holding company laws and regulations generally provide that no person, corporation or other entity may
acquire control of an insurance company, or a controlling interest in any parent company of an insurance company, without
the prior approval of such insurance company's domiciliary state insurance regulator. Under the laws of each of our U.S.
insurance subsidiaries' domiciliary states, acquiring, directly or indirectly, 10% or more of the voting securities of an insurance
company or its parent company is presumptively considered to have acquired control of the insurer, although such
presumption may be rebutted by a showing that control does not in fact exist.
Finally, while the United States federal government in most contexts currently does not directly regulate the insurance
business, the Federal Insurance Office established by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the
"Dodd-Frank Act") now has an oversight role with respect to insurance regulation.
Regulation Related to Special Servicing
Our wholly-owned subsidiary, K-Star Asset Management LLC ("K-Star"), serves as a special servicer for certain CMBS and
CLO transactions in which funds and/or accounts managed by our investment adviser subsidiaries have controlling positions.
Its business is subject to state regulations in certain states in which it operates, including regulations requiring K-Star to
maintain a special servicer rating from Fitch, S&P Global Ratings, and DB Morningstar, applicable regulations in the states in
which such serviced property is located, and other regulations applicable to K-Star's obligations under the relevant servicing
agreements.
Ireland and Other European Union Countries
We have a number of subsidiaries which are authorized and regulated by the Central Bank of Ireland (the “CBI”). The CBI
is responsible for, among other things, regulating and supervising firms that provide financial services in Ireland, including
broker-dealers and investment firms. The CBI also develops and maintains regulatory policies for Ireland's financial services
sector. The CBI has the authority to approve applications from financial services providers in Ireland, monitor compliance with
its standards, and take enforcement action for non-compliance. Violation of the CBI's requirements may result in
administrative sanctions; investigations; refusal, revocation or cancellation of authorization or registrations; criminal
prosecution; and/or reports to other agencies.
KKR Alternative Investment Management Unlimited Company, KKR Credit Advisors (Ireland) Unlimited Company and KKR
Capital Markets (Ireland) Limited are regulated by the CBI. KKR Alternative Investment Management Unlimited Company is an
authorized European Union ("EU") alternative investment fund manager permitted to conduct portfolio management, risk
management and certain administrative activities. KKR Credit Advisors (Ireland) Unlimited Company is authorized to carry out
a number of regulated activities under the Markets in Financial Instruments Directive (“MiFID”), including receiving and
transmitting orders, portfolio management and providing investment advice. KKR Credit Advisors (Ireland) Unlimited
Company is also subject to regulatory supervision in France through KKR Credit Advisors Ireland Paris Branch, where this
entity operates under the MiFID Freedom of Establishment rules. KKR Capital Markets (Ireland) Limited is authorized to
engage in a number of regulated activities regulated under MiFID, including dealing as principal or agent, and making
arrangements in relation to certain types of specified investments. KKR Credit Advisors (Ireland) Unlimited Company and KKR
Capital Markets (Ireland) Limited also benefits from a passport under the single market directives to offer services cross
border into all countries in the European Economic Area.
In Europe, we operate in accordance with the EU Alternative Investment Fund Managers Directive (the “AIFMD”), which
establishes a comprehensive regulatory and supervisory framework for alternative investment fund managers (“AIFMs”) that
manage or market alternative investment funds in the EU. The AIFMD imposes various substantive regulatory requirements
on AIFMs, including a subsidiary of ours, KKR Alternative Investment Management Unlimited Company, which is authorized as
an AIFM by the Central Bank of Ireland. KKR Alternative Investment Management Unlimited Company is also subject to
limited regulatory supervision in Germany through its KKR Alternative Investment Management - Frankfurt Branch,
established in accordance with the Freedom of Establishment provisions of the Alternative Investment Fund Managers
Directive.
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United Kingdom
We have several subsidiaries which are authorized and regulated by the FCA under the Financial Services and Markets Act
2000 ("FSMA"). FSMA and related rules govern most aspects of investment business, including investment management,
sales, research and trading practices, provision of investment advice, corporate finance, use and safekeeping of client funds
and securities, regulatory capital, record-keeping, margin practices and procedures, approval standards for individuals, anti-
money laundering, periodic reporting, and settlement procedures. The FCA is responsible for administering these
requirements and our compliance with the FSMA and related rules. Violations of these requirements may result in censures,
fines, imposition of additional requirements, injunctions, restitution orders, revocation or modification of permissions or
registrations, the suspension or expulsion from certain "controlled functions" within the financial services industry of officers
or employees performing such functions or other similar consequences.
KKR Capital Markets Partners LLP has permission to engage in a number of regulated activities regulated under FSMA,
including dealing as principal or agent and arranging deals in relation to certain types of specified investments and arranging
the safeguarding and administration of assets. Kohlberg Kravis Roberts & Co. Partners LLP has permission to engage in a
number of regulated activities including advising on and arranging deals relating to corporate finance business in relation to
certain types of specified investments. KKR Credit Advisors (EMEA) LLP has permission to engage in a number of regulated
activities including dealing as agent, managing, advising on and arranging deals in relation to certain types of specified
investments and arranging the safeguarding and administration of assets.
Bermuda
Our insurance subsidiaries organized in Bermuda, Global Atlantic Re Limited and Global Atlantic Assurance Limited, and
reinsurance co-investment vehicles sponsored by Global Atlantic are subject to regulation and supervision by the Bermuda
Monetary Authority ("BMA") and compliance with all applicable Bermuda laws and Bermuda insurance statutes and
regulations, including but not limited to the Bermuda Insurance Act. The Bermuda Insurance Act grants to the BMA powers to
supervise, investigate, and intervene in the affairs of insurance companies and to approve any change or controllers. The
Bermuda Insurance Act imposes solvency, capital and liquidity standards and auditing and reporting requirements on
Bermuda insurance companies. The Bermuda Insurance Act prohibits our Bermuda insurance subsidiaries from declaring or
paying any dividends during any financial year unless certain financial conditions are met or prior approval from the BMA is
received. A Bermuda licensed insurer is required to maintain a sufficiently staffed principal office in Bermuda.
Asia-Pacific
We conduct investment advisory and capital markets businesses in the Asia-Pacific region through subsidiaries including
KKR Capital Markets Japan Limited, a Type I and Type II Financial Instruments Business Operator under the Financial
Instruments and Exchange Act of Japan, KKR Capital Markets Asia Limited, a Hong Kong licensed asset manager and broker-
dealer licensed by the Securities and Futures Commission in Hong Kong, KKR Capital Markets Asia II Limited, broker-dealer
licensed by the Securities and Futures Commission in Hong Kong, and KKR Singapore Pte. Ltd. and KKR Credit Advisors
(Singapore) Pte. Ltd., which each hold a capital markets services license for fund management and are regulated by the
Monetary Authority of Singapore (the latter of which is also an SEC-registered investment adviser).
Other Jurisdictions
Certain other subsidiaries or funds that we advise are registered with, have been licensed by or have obtained
authorizations to operate in their respective jurisdictions other than the jurisdictions described above, including Australia,
Canada, Cayman Islands, China, India, Korea, Luxembourg, Mauritius, Saudi Arabia, and United Arab Emirates (Dubai
International Financial Centre and Abu Dhabi Global Market). These registrations, licenses or authorizations relate to
providing investment advice, broker-dealer activities, marketing of securities, and other regulated activities. Failure to comply
with the laws and regulations governing these subsidiaries and funds that have been registered, licensed or authorized could
expose us to liability and/or damage our reputation.
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Website and Availability of SEC Filings
Our website address is www.kkr.com. Information on our website is not incorporated by reference herein and is not a
part of this report. We make available free of charge on our website or provide a link on our website to this report on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after
those reports are electronically filed with, or furnished to, the SEC. To access these filings, go to our Investor Relations
website, available at ir.kkr.com, and then visit the "SEC Filings & Annual Letters" section of this website. In addition, these
reports and the other documents we file with the SEC are available at a website maintained by the SEC at www.sec.gov.
From time to time, we may use our website as a channel of distribution of material information. Financial and other
material information regarding our company is routinely posted on and accessible at www.kkr.com. Financial and other
material information regarding Global Atlantic is routinely posted on and accessible at www.globalatlantic.com. In addition,
you may automatically receive e-mail alerts and other information about our company by enrolling your e-mail address by
visiting the "Contacts & Email Alerts" section of our Investor Relations website, available at ir.kkr.com.
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ITEM 1A. RISK FACTORS
You should carefully consider the risks described below and the other information contained in this report and other
filings that we make from time to time with the SEC, including our consolidated financial statements and accompanying notes.
Any of the following risks could materially and adversely affect our business, financial condition, results of operations, cash
flows, and prospects. Many risks discussed in this report also impact our investment vehicles, portfolio companies and other
investments, including balance sheet investments, which may, in turn, materially and adversely impact KKR. When discussing
our risks in this report, unless the context requires otherwise, references to (i) our investments include our portfolio
companies, which are typically companies in which we have a controlling equity interest or other investment with significant
influence, (ii) investors refers to the investors in our funds and other investment vehicles, and (iii) investments that we make
or own on our balance sheet include the portfolio companies reported in our Strategic Holdings segment and investments
held by our insurance subsidiaries. We could also be materially and adversely affected by other risks that are not known to us
or that we currently believe to be immaterial. The following risk factors have been organized by category within risks related
to our business, regulatory framework, investment activities, insurance activities, and our organizational structure; however,
many of the risks are interrelated, and as a result, should be read together to fully understand the risks involved with
investing in our securities. See also “Business—Regulation” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” for a discussion of certain business, competitive, regulatory, market, economic and
other conditions that may materially and adversely affect us.
Risks Related to Our Business
Difficult market and economic conditions can, and periodically do, materially and adversely affect KKR.
Our business is materially affected by market and economic conditions and events throughout the world, including
conditions relating to interest rates, fiscal and monetary stimulus (and stimulus withdrawal), availability of credit, inflation
rates, economic growth, changes in laws, trade barriers, commodity prices, foreign exchange rates and controls, and liquidity
conditions in equity and debt capital markets. These market and economic conditions are not in our control and are often
difficult, if not impossible, to predict, manage, mitigate, hedge or foresee. Examples of how market and economic conditions
may materially and adversely affect our business and financial results include negative impacts to us from any or all of the
following:
•the performance and value of the investments held by us and our investment vehicles,
•opportunities for us and our investment vehicles to make, exit and realize value from our and their investments,
•our ability to find suitable investments or secure financing for investments on attractive terms, or at all,
•the attractiveness of our investment vehicles and insurance products to investors and policyholders, respectively,
including our ability to raise capital for new or successor funds and other investment vehicles on attractive terms,
•the frequency and size of fees generated from our capital markets business in connection with the issuance and
placement of equity and debt securities, loans and credit facilities,
•the availability and cost of capital for our insurance subsidiaries and our investment vehicles’ portfolio companies,
•policyholder behavior, including policyholders electing to defer paying insurance premiums, stop paying insurance
premiums altogether, or surrender their policies, and
•the cost of providing guaranteed insurance benefits, insurance capital requirements and collateral requirements.
See also “—Risks Related to our Investment Activities—Various conditions and events outside of our control that are
difficult to quantify or predict may have a significant impact on the valuation of our investments” below.
Global, regional and local events outside of our control, including geopolitical events and natural
disasters, could materially and adversely impact KKR.
We are a global financial institution with operations, investors and investments located around the world. Geopolitical
developments, including the imposition of protectionist measures by countries such as sanctions, restrictions on foreign direct
investment, trade barriers, tariffs, export controls and other governmental actions related to international trade agreements
and policies that materially constrain cross-border flows of capital, goods, or data, may impact our investment activities and
investments. In addition, other geopolitical developments such as political instability, civil unrest, and national and
international security events (including the outbreak of war, military action, terrorist acts or other hostilities), can, and
occasionally do, materially and adversely impact our ability to conduct our investment management and insurance
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businesses, in addition to our investments. These risks have increased in both scale and complexity due to intensifying
geopolitical competition and conflicts, including the ongoing Russian invasion of Ukraine, instability in the Middle East,
heightened geopolitical competition between China and other major world economies, heightened levels of political populism
leading to regulatory volatility, growing use of industrial policy globally (including the imposition of tariffs and other trade and
capital barriers), and increased attention to global threats. We are subject to these risks as we own and seek to own
businesses throughout the world, have offices and employees in multiple countries and seek investors throughout the world
for our investment products and certain of our insurance products.
We are also affected by natural disasters or catastrophes, such as public health crises, pandemics, epidemics, security
events, and weather events, any of which could have an adverse impact on our ability to conduct our investment
management and insurance businesses. Potential changes in climatic conditions, together with the response or failure to
respond to these changes, could precipitate the frequency, severity, and impact of natural disasters or catastrophes.
Such events outside of our control could limit or even materially prohibit our ability to conduct any operations or
investment activities in certain locations. In addition, claims arising from the occurrence of such events could have an adverse
effect on our insurance activities, in particular with respect to increases in the number of claims, lapses and surrenders of
existing policies, as well as sales of new policies. These events outside of our control, and actions taken in response to them,
may contribute to significant volatility in the financial markets, resulting in increased volatility in equity prices (including our
common stock), valuation, material interest rate changes, supply chain disruptions, such as simultaneous supply and demand
shock to global, regional and national economies, and an increase in inflationary pressures. These events and the disruptions
that they cause, alone or in combination, also have the potential to strain or deplete our infrastructure and response
capabilities generally, and to increase costs, including costs of insurance, each of which could materially and adversely affect
us. See also “—Risks Related to Our Investment Activities—Investments in real assets may expose us and our investment
vehicles to greater risks, liabilities and operational complexities than investments in operating companies.”
We may have direct investments in a region or a country that is experiencing one of the aforementioned events, and we
may also be materially and adversely affected by the occurrence of such events as a result of indirect exposure that our
portfolio companies or other investments may have through other interconnectivities such as supply chains, commodity
prices and general macroeconomic exposure. These events, including barriers to investment between the U.S. and other
countries or regions, could chill or limit business opportunities, adversely impact the value of our investments, increase costs,
decrease margins, reduce the competitiveness of products and services offered by portfolio companies, and adversely affect
the revenues and profitability of portfolio companies.
The loss of key personnel or their services, or any misconduct by key personnel, could have a material
adverse effect on KKR.
Our Co-Founders, Co-Chief Executive Officers, employees, and other key personnel, including certain consultants and
advisors, possess substantial experience and expertise and have strong business relationships with investors in our
investment funds, other members of the business community and distributors of our investment vehicles and insurance
products. As a result, the loss of key personnel could jeopardize our relationships with these individuals and entities, result in
the reduction of AUM or investment opportunities, or render us unable to maintain operations and support growth of our
businesses. The loss of services of key personnel could also harm our ability to maintain or grow AUM in existing investment
vehicles or raise additional funds in the future. Competition is also intense for the attraction and retention of qualified
employees and consultants, including those with industry-specific expertise. Our ability to continue to compete effectively in
our businesses will depend upon our ability to attract new investment professionals, insurance professionals, other
employees, and consultants and retain them accordingly. In addition, changes in employee compensation as a result of the
modification of our compensation framework or poor investment or financial performance may impact our ability to hire,
retain, and motivate our employees whom we depend.
Furthermore, the agreements governing our committed capital funds generally provide that in the event certain “key
persons” cease to actively manage an investment vehicle or be substantially involved in KKR activities, investors in the
investment vehicle may reduce, in whole or in part, their capital commitments available for further investments on an
investor-by-investor basis, which could indirectly lead to a limitation on the fund’s ability to conduct its business or cause us
to agree to unfavorable terms to continue the affected fund. Although we periodically engage in discussions with the limited
partners of our funds regarding a waiver of such provisions with respect to executives involved in geographically or product
focused funds whose departures have occurred or are anticipated, such waiver is not guaranteed, and our limited partners’
refusal to provide a waiver may have a material adverse effect on our business and financial results.
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If we cannot retain and motivate our employees and other key personnel or recruit, retain and motivate new employees
and other key personnel, our business may be materially and adversely affected. Our ability to recruit, retain and motivate
our employees and other key personnel is dependent on our ability to offer highly attractive incentive opportunities, benefits,
and compensation, which frequently includes allocating a portion of the carried interest that we earn from our investment
vehicles, which we refer to as the carry pool. There can be no assurance that the carry pool will have sufficient cash available
to continue to make cash payments in the future, and fluctuations from the distributions generated from the carry pool could
render the compensation that KKR separately pays to them to be less attractive. In order to retain and motivate our
employees and other key personnel, we may be required to pay them a higher amount of non-carry cash compensation to
retain and motivate them. The loss, or ineffectiveness of any incentive compensation plans, including as a result of any
adverse changes in regulation or tax law that impacts certain forms of incentives or other remuneration that we may typically
offer employees, such as carried interest, may cause us to incur additional expenses to pay competitively with other firms,
which could materially and adversely affect KKR. In addition, legal and regulatory developments outside of our control may
impact our ability to successfully identify, hire, and promote employees and other key personnel and may necessitate changes
to employment compensation practices.
We seek to retain our employees by having them agree to a confidentiality and restrictive covenants agreement.
However, there is no guarantee that the confidentiality and restrictive covenant agreements to which they are subject,
together with our other arrangements with them, will prevent them from leaving us, joining our competitors or otherwise
competing with us. Depending on which entity is a party to these agreements and the laws applicable to them, we may not
be able to, or may choose not to, enforce them or become subject to lawsuits or other claims, and certain of these
agreements might be waived, modified or amended at any time without our consent. Many countries and states within the
U.S. in which we operate have proposed, considered, or have already adopted, laws and rules which significantly limit or ban
noncompete clauses between employers and their employees, which could both limit our ability to enter into such restrictive
covenants and our ability to enforce them. Even where enforceable, these agreements expire after a certain period of time,
at which point our former employees will be free to compete against us.
From time to time, our firm, our investment vehicles, our portfolio companies and other investments, or our employees
may be a focus of public attention or media coverage, and these circumstances, as well as broader social and political
tensions, may increase the risk of harassment, threats, acts of violence or other personal safety and security incidents
directed at our personnel, including our senior executives, both inside and outside the workplace. We have implemented, and
expect to continue to, implement or expand security measures for our senior executives and other key employees, such as
physical security, secure transportation, travel restrictions and monitoring or protective services for them and, in some cases,
their families. Such measures can be costly and may not be effective in preventing all incidents. Any actual or threatened
harm to the personal safety of our employees, or perceived failure to protect them adequately, could materially adversely
affect us, including our ability to attract and retain talent.
Our business could also be damaged by the misconduct of, or allegations of misconduct of, our employees or other key
personnel. Misconduct by our employees or other key personnel could impair our ability to retain and recruit employees, to
attract and retain clients and investors, and may subject us to significant legal liability, regulatory scrutiny, and reputational
harm.
Our reliance on third parties in the operation of our business exposes us to operational, reputational
and other risks.
We rely significantly on third parties whom we do not control for significant support and assistance with various aspects
of our business, including for investment activities, accounting, record keeping, data processing, and other operations. These
third parties include technology service providers, financial intermediaries and advisers, law firms, accountants,
administrators, lenders, broker dealers, distribution agents, consultants, and other vendors. We generally have less control
over the delivery of third-party services and, as a result, may face disruptions to our ability to operate our business as a result
of interruptions of such services. We may also be held liable if those third-party service providers, their employees or their
own third-party service providers are found to have committed negligence, violated laws or engaged in misconduct. For
example, in the past, Global Atlantic was the subject of policyholder and agent class action litigation matters and a number of
regulatory matters stemming from service disruptions caused by a third-party administrator for certain Global Atlantic life
insurance policies. While Global Atlantic outsources policyholder administration to third-party, it is responsible under
insurance regulations and insurance contracts for servicing.
We rely heavily on the systems of third parties who provide technology services to us, including as part of our
information technology infrastructure. Our data processing systems, communication lines and networks are often supported
by third-party service providers, vendors, and intermediaries. A disaster, disruption, error or inability to operate or provide
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any of these services by us or our vendors or third parties with whom we conduct business could have a material adverse
impact on our financial results and our ability to continue to operate our business without interruption. Our business
continuation or disaster recovery programs may not be sufficient to mitigate the harm that may result from such a disaster or
disruption. In addition, insurance and other safeguards might only partially reimburse us for our losses, if at all. While we have
endeavored to mitigate the risk of other disruptions in the future, there can be no guarantee these mitigation efforts will be
successful. We may experience material reputational impacts and heightened regulatory scrutiny as a result of these matters.
Any interruption or failure of our information technology infrastructure caused directly or indirectly by third-party service
providers could result in our inability to provide services to our clients, other disruptions of our business, corruption or
modifications to our data and fraudulent transfers or requests for transfers of money or the inability to demonstrate
compliance with regulatory requirements. Our third-party service providers could experience, and have experienced, certain
cyber incidents, and as a result, unauthorized individuals have gained access to our clients’, and could improperly gain access
to our, confidential data through such third parties. Any cybersecurity incidents involving these third parties could impair the
quality of our operations and could impact our reputation and materially and adversely affect us. We may also have
insufficient recourse against such third parties and may have to expend significant resources to mitigate the impact of such an
event, and to develop and implement protections to prevent future events of this nature from occurring. Actions taken by our
third-party service providers may also damage our reputation. We consider our reputation critical to attracting and retaining
investors, maintaining our relationships with regulators and being viewed as an attractive investment partner. As a result, any
negative publicity or negative public perception regarding a third-party service provider’s actions on our behalf may damage
our relationships with existing and potential investors, employees, regulators and other stakeholders, impair our ability to
raise capital, adversely impact the ability of our investment vehicles to make and exit investments, and impair our ability to
carry out investment activities generally.
We also specifically depend on the services of various financial intermediaries (including banks, prime brokers,
custodians, paying agents and escrow agents), counterparties, administrators and other agents, including to carry out certain
credit, securities, derivatives and hedging transactions, subjecting us to the risk that one or more of these counterparties
defaults, either voluntarily or involuntarily, on its performance under the applicable contract. We may enter into financial
arrangements with a limited number of counterparties, which has the effect of concentrating the transaction volume (and
related counterparty default risk) with these counterparties. If such a counterparty defaults, particularly a default by a major
investment bank or a default by a counterparty that has a significant number of our contracts, we may be materially adversely
affected. In the event of the insolvency of a financial intermediary that is holding our assets as collateral (to the extent not
adequately segregated) or that is required to make payments to us, we may not be able to recover equivalent assets or
payment in full as we will rank among the financial intermediary’s unsecured creditors. In addition, the timing of the recovery
of such amounts and assets (including segregated collateral) may also be significantly delayed as part of the administration of
the bankruptcy estate of the financial intermediary. In addition, our risk management processes may not accurately
anticipate the impact of market stress or counterparty financial condition, and as a result, we may not take sufficient action to
reduce effectively our risks to them. The inability to recover assets or payments from financial intermediaries could have a
material adverse impact on us as well as the performance of our investment vehicles. For more information about the risks of
using financial intermediaries to sell investment and insurance products, please see “—Risks Related to Regulatory Matters—
Distribution of financial products to individual investors subjects us to heightened regulatory, litigation, and reputational risks,
which may materially adversely affect our business”.
Disruptions in our technology infrastructure or the occurrence of other operational errors could
materially and adversely affect our business.
Our business depends on the effective execution of operational processes and the reliability of information technology
systems, both those we operate and those provided by third parties. We rely on technology systems, including computer
hardware, software systems, data processing systems, and other technology infrastructure that we own or that are provided
and maintained by third party service providers. See also “—Risks Related to Our Business—Our reliance on third parties in
the operation of our business exposes us to operational, reputational and other risks.” As our reliance on such technology
infrastructure has increased, so have the risks associated with system vulnerabilities, data loss, cybersecurity incidents,
processing failures and operational disruptions. If we are unable to adapt our technology infrastructure to accommodate our
growth, business changes or regulatory compliance needs, or if the cost of maintaining such systems may increase materially
from its current level, it may have a material adverse effect on us. We may need to continue to invest heavily in upgrades and
expansions to our information technology infrastructure to continue to support our business and to avoid disruption of our
operations, including our investment activities. Moreover, the technology systems of third-party providers and technology
infrastructure that we own may contain vulnerabilities or experience disruptions, including those resulting in data loss, that
could materially and adversely impact our business. In addition, certain of our operational processes continue to involve our
employees engaging in manual processes, which are inherently subject to execution risk, including unintentional mistakes,
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processing errors or control failures, which could materially and adversely affect us. Manual processes may be particularly
susceptible to error during periods of high transaction volume, personnel changes, new technology system implementations
or other operational transitions. Although we maintain policies, procedures, and internal controls, and have implemented
technology infrastructure designed to mitigate these risks, such measures may not be effective in preventing or detecting
errors in a timely manner. Failures in our operational processes could result in financial loss, regulatory scrutiny, reputational
harm, and other adverse consequences.
The failure to effectively manage our balance sheet could materially and adversely affect our financial
condition and results of operations.
We have made a strategic decision to have a larger balance sheet than most of our asset management competitors, and
consequently, the management of our balance sheet has a greater impact on our financial condition and results of operations.
We utilize our balance sheet to support our insurance subsidiaries’ business and capital needs, underwrite commitments in
our capital markets transactions, make capital commitments to our investment vehicles, and make acquisitions and other
strategic investments for our Strategic Holdings segment.
A significant portion of our balance sheet is dedicated to the ownership and operation of our insurance business, which is
a capital-intensive, long-duration business. Our insurance subsidiaries are subject to regulatory capital requirements and
rating agency capital expectations that require each entity to maintain significant levels of capital. To support insurance
company capitalization, we may need to contribute additional capital to our insurance subsidiaries, or we may be restricted
from growing and expanding our insurance business. Our insurance obligations to policyholders are contractual, and, in
contrast to our investment products, we must pay these obligations regardless of the investment performance of the assets
backing these obligations. We make significant assumptions to calculate our expected future insurance payment obligations,
including with respect to factors such as policyholder behavior and market or economic conditions that are not in our control.
We hold significant assets on balance sheet to support these insurance obligations. We are subject to the market impacts on
and investment performance of such assets as well as actual policyholder behavior differing from our assumptions. If we are
unsuccessful in our asset-liability management, we will suffer insurance operating losses as we will owe more on our
insurance obligations than we earn on such assets and may be required to hold additional capital. Our insurance balance
sheet requires active risk management and a failure to manage those risks may have a material and adverse effect on us.
We have used our balance sheet in our capital markets business to underwrite loans, securities or other financial
instruments, which we generally expect to syndicate to third parties. We have also entered into arrangements with third
parties that reduce our risk associated with holding unsold securities when underwriting certain debt transactions, which
enables our capital markets business to underwrite a larger amount. To the extent that we are unable to syndicate our
commitments to third parties or our risk reduction arrangements do not fully perform as anticipated, we may be required to
sell such investments at a significant loss or hold them indefinitely, which could impact the performance of such investments
and also impair our capital markets business’ ability to complete additional transactions, either of which could materially and
adversely affect us.
In addition to the investments held in our insurance subsidiaries, which are reported in our Insurance segment, our
balance sheet makes investments and holds strategic assets that are reported in our Asset Management and Strategic
Holdings segments. We bear the full risk of these balance sheet investments. However, our success in generating returns on
this capital, will depend, among other things, on the availability of suitable opportunities for our balance sheet, including for
Strategic Holdings, after giving priority in investment opportunities to our advisory clients, and on our ability to realize the
values that we expect to achieve from acquiring these.
Our balance sheet assets have also been a significant source of capital for new investment strategies and products for
investors. For example, we may acquire investments using our balance sheet capital and warehouse these investments while
fundraising a particular investment vehicle. We expect our balance sheet capital to be returned to us if such investment
vehicle has a successful fundraise. However, if the fundraising is not successful, or if investment vehicle investors are not
willing to pay for these warehoused investments, then we may realize losses on those investments or become limited in our
ability to seed new businesses or support our existing businesses as effectively as contemplated.
We also have made and expect to continue to make significant capital investments in our current and future funds and
other investment vehicles. Contributing capital to these investment vehicles is risky, and we may not realize any significant
profit from them, or we may even lose some or all of the principal amount of our investments. In addition, we have
developed and completed several structured transactions in which our balance sheet provides subordinated or equity
financing and third-party investors provide senior or preferred equity financing to an investment vehicle that invests in our
investment vehicles and certain other investment assets. We have also entered into similarly structured transactions where
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the cash flows of our balance sheet’s capital commitments to our investment vehicles have been effectively pledged as
collateral for such investment vehicles. Because of the subordinated nature of KKR’s interests, we are at risk of losing all of
our interests in these transactions ahead of any third-party if the investments do not perform as expected. For further
information about KKR’s unfunded commitments to its investment vehicles, including funding requirements to levered
investment vehicles and structured transactions, see also Note 24 “Commitments and Contingencies—Funding Commitments
and Others” in our financial statements.
See also “—Risks Related to our Insurance Activities” below.
The failure to manage, or the inability to access, adequate sources of liquidity could materially and
adversely affect KKR.
We require significant liquidity in order to support and grow our asset management and insurance businesses, conduct
our investment activities, meet our capital markets underwriting commitments, satisfy our policyholder obligations and
comply with regulatory requirements. We also have debt securities outstanding and indebtedness outstanding under various
credit facilities.
Depending on market and economic conditions, we may not be able to refinance or renew our debt obligations, or find
alternate sources of financing (including issuing debt or equity capital) on attractive or commercially reasonable terms or at
all. Furthermore, the incurrence of additional debt could result in downgrades of our existing corporate credit ratings, which
could limit the availability of future financing and increase our costs of borrowing. If our liquidity requirements were to
exceed our available liquid assets, we could be forced to sell assets or seek to raise debt or equity capital on unfavorable
terms. Moreover, the failure to comply with covenants contained in any of our debt agreements could trigger prepayment
obligations that could materially and adversely affect us by causing liquidity constraints. Any default under these agreements
(including through defaults on other debt that may result in cross-defaults on these agreements), and any resulting
acceleration of the borrower’s outstanding indebtedness, could have a material adverse effect on us and could also cause a
cross-default under our corporate revolving credit facility, which, if not cured or waived, could have a material adverse effect
on us. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity Needs” for
further information regarding our liquidity needs and our capital commitments as of December 31, 2025, and Note 16 “Debt
Obligations” in our financial statements for further information regarding our senior notes, credit facilities and other
outstanding debt obligations.
In addition, we have indebtedness at various subsidiaries, including subsidiaries that hold our asset management,
insurance, and strategic holdings businesses, the terms of which impose limitations on operations and restrict the ability to
make distributions to its direct and indirect parent companies, including KKR Group Partnership L.P. In addition, our
insurance subsidiaries and certain capital markets subsidiaries are also subject to regulatory restrictions that place restrictions
on their ability to make distributions to their parent companies. These restrictions on distributions impose limitations on our
ability to manage liquidity needs for the KKR business.
Certain investment vehicles we manage have liquidity needs that are not entirely in our control. For example, individual
investors in our K-Series vehicles have the right to redeem their interests in the K-Series for cash. There is a risk that our
investment vehicles will lack adequate liquidity to satisfy any unexpected redemption requests, which may occur for a variety
of reasons, including increases in their investors’ liquidity needs, which tend to be more pronounced during periods of market
volatility and which may escalate in any period and be particularly pronounced for investment vehicles. If we are unable to
meet these redemption requests, or if any such redemption requests trigger any caps or limits that legally permit such
vehicles to gate or not honor redemption requests, then we could suffer material reputational harm.
In addition, our insurance companies have various liquidity needs that may be difficult to predict. Many of the insurance
products allow policyholders to withdraw their funds, also referred to as a surrender, under contractually-defined
circumstances. We may be forced to sell investments at a loss in connection with these redemption or withdrawal requests,
which are not always predictable and often driven by market and economic conditions that are not in our control. In addition,
our reinsurance business is subject to potentially significant liquidity requirements. Our reinsurance agreements generally
require Global Atlantic to provide collateral in trust for the benefit of the reinsurance client (the cedant), limiting our insurer’s
access to such assets for liquidity use, and some agreements may require additional collateral to be posted under certain
circumstances. Moreover, reinsurance agreements generally provide the reinsurance client with recapture rights upon the
occurrence of certain contractual triggering events. The exercise of such rights could, if alternate sources of liquidity are
unavailable, require our insurance subsidiaries to dispose of assets on unfavorable terms, including as a result of truncating
expected holdings periods unexpectedly. In addition, our U.S. insurance subsidiaries are members of regional Federal Home
Loan Banks (“FHLB”), which allows those insurance subsidiaries to borrow from the FHLB using certain investments as
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collateral. Access to FHLB loans is an important source of liquidity for our insurance business. If those sources of borrowing
were no longer available, the liquidity of our U.S. insurance subsidiaries could be materially and adversely affected. See “Risks
Related to our Insurance Activities.”
We have also used, and from time to time may continue to use, our balance sheet to provide credit support for our
general partners’ obligations to our investment vehicles, to facilitate certain investment transactions entered into by our
investment vehicles, and to make significant commitments to our investment vehicles. See Note 24 “Commitments and
Contingencies” in our financial statements.
Our capital markets activities expose us to material risks.
We provide a broad range of capital markets services that include acting as an advisor or as an agent, principal,
underwriter, syndicator, arranger or other form of intermediary in connection with securities transactions, debt or equity
syndications, loan transactions, derivative transactions and other types of financings and financial arrangements. However,
we may incur significant losses in connection with our capital markets activities, including to the extent that, for any reason
we are otherwise unable to dispose of any financial exposure that we incur at the prices that we anticipated or at all. We also
may be subject to potential underwriter liability or regulatory consequences for material misstatements or omissions in
prospectuses or other offering documents relating to transactions in which we are involved. We conduct capital markets
activities in connection with transactions in which our investment vehicles or insurance companies may participate as a
sponsor or as a purchaser or a seller of securities, which could constitute a conflict of interest or subject us to regulatory
scrutiny, liabilities or reputational harm. Please also see “—The failure to effectively manage our balance sheet could
materially and adversely affect our financial condition and results of operations.”
The failure to manage our financial and enterprise risks could materially and adversely affect our
financial condition and results of operation.
We seek to identify, monitor and manage certain financial and enterprise risks effectively. If we are not able to
accurately or effectively price, identify and predict, manage or ameliorate these risks, or if our management of risk does not
accurately predict and appropriately respond to future risk exposures, such risks could have a material adverse effect on us.
We use derivative financial instruments and risk management strategies to hedge, manage or otherwise reduce investment
risks, they may not be properly implemented as designed, or otherwise not effectively offset the risks we have identified. We
may not have identified, or may not even be able to identify, all the material risks relevant for our asset management or
insurance businesses (including capital markets activities). We also may choose not to hedge, in whole or in part, any of the
risks that have been identified. In our insurance business, our hedging activities seek to mitigate economic impacts relating to
our insurance products and investments, which may result in additional volatility in financial results, adverse impacts on the
level of statutory capital and the risk-based capital ratios of our insurance subsidiaries, and may not effectively offset any
changes in insurance reserves. In addition, the scope of risk management activities undertaken by us is selective and varies
based on the level and volatility of interest rates, prevailing foreign currency exchange rates, the types of investments that are
made and other changing market conditions. We do not seek to hedge our exposure in all currencies or all investments or
insurance liabilities, which means that our exposure to certain market risks are not limited. We also may use hedging
transactions and other derivative instruments to reduce the effects of a decline in the value of a position, but they do not
eliminate the possibility of fluctuations in the value of the position or prevent losses if the value of the position declines.
These kinds of transactions also generally limit the opportunity for gain if the value of a position increases. On the other hand,
our risk management actions with respect to insurance products with guaranteed benefits may be insufficient for Global
Atlantic to be protected against losses. Unanticipated market changes may result in poorer overall investment performance
than if the hedging or other derivative transaction had not been executed. Moreover, it may not be possible to limit the
exposure to a market development that is so generally anticipated that a hedging or other derivative transaction cannot be
entered into at an acceptable price.
For a discussion of the market risks affecting our business and the strategies employed to mitigate them, including our
hedge program, please see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”
We may suffer material harm as a result of legal claims, litigations, investigations, and negative
publicity.
The activities of our businesses, including the investment decisions we make and the activities of our employees, may
subject us and our employees, officers and directors to the risk of litigation by third parties, as well as various governmental
and regulatory examinations, inquiries, investigations, and enforcement actions. For a description of certain legal matters
involving KKR, see Note 24 “Commitments and Contingencies” in our financial statements.
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We, our investment vehicles, and our employees are each exposed to the risks of litigation relating to our asset
management and insurance businesses. We are also exposed to risks of litigation, investigation or negative publicity in the
event any transactions we undertake are alleged not to have been properly considered and approved under applicable law.
An adverse judgment, order or decree could have a material adverse impact on our ability to conduct our business if it were
to constitute a disqualifying event under the laws and regulations applicable to our firm and could result in material
reputational damage that could adversely affect our ability to successfully fundraise or source or engage in investment
transactions. See also “—Risks Related to Regulation” below.
Although investors in our funds do not have legal remedies against us, the general partners of our funds, our funds, our
employees or our affiliates solely based on their dissatisfaction with the investment performance of those funds, such
investors may have remedies against us, the general partners of our funds, our funds, our employees or our affiliates to the
extent any losses result from fraud, gross negligence, willful misconduct or other similar misconduct. While the general
partners and investment advisers to our investment funds, including their directors, officers, employees and affiliates, are
generally indemnified to the fullest extent permitted by law with respect to their conduct in connection with the management
of the business and affairs of our investment funds, such indemnity generally does not extend to actions determined to have
involved fraud, gross negligence, willful misconduct or other similar misconduct. If any civil or criminal lawsuits brought
against us or the aforementioned entities or individuals results in a finding of substantial legal liability or culpability, the
lawsuit could materially and adversely affect us. Similarly, allegations of improper conduct by private litigants or by
governmental or regulatory authorities, whether the ultimate outcome is favorable or unfavorable to us, as well as negative
publicity and press speculation about us, our investment activities or the private equity industry in general, whether or not
valid, may harm our reputation and cause volatility and speculation in the trading of our common stock. We consider our
reputation critical to attracting and retaining investors, maintaining our relationships with regulators and being viewed as an
attractive investment partner. As a result, any negative publicity or negative public perception regarding our actions,
business, management or industry may damage our relationships with existing and potential investors, employees, regulators
and other stakeholders, impair our ability to raise capital, adversely impact the ability of our investment vehicles to make and
exit investments, and impair our ability to carry out investment activities generally.
See also “—The actions of our portfolio companies may subject us to potential liabilities and cause us reputational harm”
below.
We may pursue new business opportunities, strategic initiatives, or investment opportunities that
involve new or unique business, regulatory or other complexities and risks.
Our organizational documents do not limit our ability to enter into new lines of business, and we may expand into new
investment strategies, geographic markets, businesses, types of investors and investment products. We seek to grow our
businesses by, among other things, increasing AUM in existing businesses, pursuing new investment strategies (including
investment opportunities in new asset classes), developing new types of investment structures and products (such as publicly
listed vehicles, separately managed accounts and structured products), expanding into new geographic markets and
businesses and seeking investments from investor bases we have traditionally not pursued, such as individual investors, which
subject us to additional risk. Introducing new types of investment structures and products could increase the complexities
and conflicts of interest involved in managing such investments, including ensuring compliance with applicable regulatory
requirements and terms of the investment vehicles. There is no assurance that all areas of our business will achieve a
satisfactory level of scale and profitability.
In the first quarter of 2024, we implemented strategic initiatives that included creating our Strategic Holdings business
segment. We continue to believe that we will receive more stable recurring revenues in the future from the growth over time
in dividend payments and earnings from companies included in our Strategic Holdings segment. However, this is our current
expectation and not a guarantee that they will be realized or be as accretive to our earnings as we currently expect. For
example, expectations about dividend amounts and investment returns from companies in our Strategic Holdings segment in
the future and the future growth of such companies, may be materially less than our current expectations or may not
materialize at all, and assumptions, including those relating to free cash flow, future capital structures of such companies,
future capital investments by us in such companies, future market and economic conditions, including interest rates, and
other assumptions, may differ materially from actual outcomes.
In 2025, we announced changes to the management of our insurance business to originate longer-duration liabilities and
assets, including investing more into non-yielding or lower-yield assets classes like private equity and real assets, expanding
outside the United States, and raising more third-party co-investment insurance capital. We believe these changes will
expand Global Atlantic’s competitive advantage and enable the generation of higher and more durable returns over the long
term; however, our financial results could be adversely impacted in the near- and medium- term as we rotate into longer-
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duration liabilities and assets. While it is our current expectation that this strategic initiative will be successful over the long
term, it is not guaranteed that these results will be realized or that these changes will be as accretive to our earnings as we
currently expect, and these changes may result in losses. Additionally, these strategic initiatives may add new business and
regulatory complexities.
In February 2026, we announced an agreement to acquire Arctos Partners, an investment management firm that invests
in professional sports teams and that provides strategic capital to other asset management firms. The acquisition is subject to
the satisfaction or waiver of certain regulatory and specified sports league approvals and other closing conditions. As part of
our proposed acquisition of Arctos, we have applied for approvals by certain sports leagues as indirect owners of sports
teams. Following the closing of the Arctos acquisition, we and our investment vehicles and portfolio companies must comply
with the league rules applicable to owners. These league rules prohibit or restrict certain investments — for example control
investments in gambling businesses or relationships with professional athletes. Complying with these rules may restrict
investment opportunities that our investment vehicles, portfolio companies, or we may have otherwise pursued, raising
potential conflicts of interest. See “—If we fail to effectively manage conflicts of interest that arise from our investment
activities, our reputation, business or financial results could be materially and adversely impacted or we may become subject
to regulatory scrutiny or litigation.” Failure to manage our compliance with these league rules could result in a material
adverse impact to our business, financial condition and results of operations.
To the extent we have made, or make, strategic investments or acquisitions or undertake other strategic initiatives,
expand into new investment strategies or geographic markets, or enter into a new line of business, we will face numerous
risks and uncertainties, including risks associated with:
•the required investment of capital and other resources;
•delays or failure to complete an acquisition or other transaction in a timely manner or at all, which may subject us to
damages or require us to pay significant costs;
•lawsuits challenging an acquisition or unfavorable judgments in such lawsuits, which may prevent the closing of the
transaction, cause delays, or require us to incur substantial costs including in costs associated with the
indemnification of directors;
•the failure to realize the anticipated benefits from an acquired business or strategic partnership in a timely manner, if
at all;
•combining, integrating or developing operational and management systems and controls, including an acquired
business’ internal controls and procedures;
•acquiring an investment that is subject to significant liabilities, including contingent liabilities, which could be
unknown to us or inadequately insured at the time of acquisition;
•integration of the businesses, including the employees of an acquired business;
•disagreements with joint venture partners or other stakeholders in our hedge fund partnerships and our strategic
partnerships;
•the additional business risks of the acquired business and the broadening of our geographic footprint;
•properly managing conflicts of interests;
•complex tax structuring that could be challenged or disregarded, which may result in losing treaty benefits or would
otherwise adversely impact our investments;
•our ability to obtain requisite regulatory approvals and licenses without undue cost or delay and without being
required to comply with material restrictions or material conditions that would be detrimental to us or to the
combined organization;
•incurrence of indemnification obligations or other contingent liabilities;
•increased regulatory scrutiny and our ability to comply with new regulatory regimes; and
•becoming subject to new laws and regulations with which we are not familiar, or from which we are currently
exempt, that may lead to increased litigation and regulatory risk and costs.
We may not realize the expected benefits of such new investments, acquisitions or initiatives.
We operate in a highly competitive industry.
Our asset management business competes with other investment managers for both investors for our investment
vehicles and for investment opportunities, including for our Strategic Holdings segment. We believe that competition for
investors for our investment vehicles is based primarily on investment performance, investor liquidity and willingness to
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invest, investor perception of investment managers' drive, focus and alignment of interest, business reputation, duration of
relationships, quality of services, pricing, fund terms including fees, and the relative attractiveness of the types of investments
that have been or are to be made. We believe that competition for investment opportunities is based primarily on the pricing,
terms, and structure of a proposed investment and certainty of execution. The firm's competitors consist primarily of
alternative and traditional asset manager sponsors of public and private investment vehicles, investment and commercial
banks (including activities conducted by their broker-dealers and investment advisers), commercial finance companies,
sovereign wealth funds, real estate development companies, BDCs, and strategic buyers. In addition, we also face competition
from local and regional investment firms, financial institutions, and other competitors in the various countries in which we
invest, where local firms may have more established relationships with the companies in which we are attempting to invest.
There are numerous funds focused on private equity, real assets, credit, and hedge fund strategies that compete for
investor capital. Fund managers have also increasingly adopted investment strategies outside of their traditional focus. For
example, traditional asset management firms have acquired alternative asset management firms, and hedge funds focused on
credit and equity strategies have taken control positions in companies, while private equity funds have acquired minority
equity or debt positions in publicly listed companies. This convergence heightens competition for investments. Furthermore,
as institutional fund investors increasingly consolidate their relationships for multiple investment products with a few
investment firms, competition for capital from such institutional fund investors have become more acute. We also face
extensive competition from both traditional and alternative asset management firms in connection with our business
initiatives to increase the number and types of investment products and fundraise directly and indirectly from individual
investors, including accredited investors and mass affluent individuals. We may be unable to achieve as quickly as expected,
or at all, our strategic business initiatives to increase the number and types of investment products and vehicles we offer
directly or indirectly to these types of investors as there is extensive competition for such investors and in private wealth
management by our competitors.
Some of our competitors may have greater financial, technical, marketing and other resources, and more personnel than
us. In the case of some asset classes and certain investment products, including those offered to individual investors, our
competitors may, and sometimes do, have longer operating histories, more established relationships, or greater experience.
Several of our competitors have raised, or may raise, significant amounts of capital and have investment objectives that are
similar to the investment objectives of our investment vehicles, which may create additional competition for investment
opportunities. Some of these competitors may also have lower costs of capital and access to funding sources that are not
available to us, which may create competitive advantages for them. In addition, some of these competitors may have higher
risk tolerances, different risk assessments or lower return thresholds, which could allow them to consider a wider range of
investments and to bid more aggressively than us for investments. Strategic buyers may also be able to achieve synergistic
cost savings or revenue enhancements with respect to a targeted portfolio company, which typically provide them with a
competitive advantage in bidding for such investments. Some of our competitors may have agreed to terms on their
investment funds or products that are more favorable to investors than our funds or products and therefore we may be
forced to match or otherwise revise our terms to be less favorable to us than they have been in the past and, further, some of
our competitors may be willing to pay higher placement fees in order to gain distribution of their private wealth products. We
may lose investment opportunities in the future if we do not match investment prices, structures and terms offered by
competitors. Alternatively, we may experience decreased investment returns and increased risks of loss if we match
investment prices, structures and terms offered by competitors.
Our capital markets business competes primarily with investment banks and broker-dealers in North America, Europe,
Asia-Pacific, and the Middle East. We principally focus our capital markets activities on our funds and our portfolio companies,
but we also seek to service other third parties. While we generally target customers with whom we have existing
relationships, those customers may have similar relationships with the firm's competitors, many of whom will have access to
competing securities transactions, greater financial, technical or marketing resources, or more established reputations than
us.
Our insurance business also operates in highly competitive markets. Please see “—Risks Related to Our Insurance
Activities—We operate in a highly competitive industry”.
Additionally, some of our competitors may be subject to less regulation or less regulatory scrutiny and accordingly may
have more flexibility to undertake and execute certain businesses or investments than we do or bear less expense to comply
with such regulations than we do.
Parts of our earnings and cash flow are highly variable due to the nature of our business.
Parts of our earnings are highly variable from quarter to quarter due to volatility of investment valuations, the investment
returns by our funds and other investment vehicles, and the accrual and payment of carried interest and fees earned from our
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investment activities. We recognize earnings on investments in our investment vehicles based on our allocable share of
realized and unrealized gains (or losses) reported by such investment vehicles and for certain of our recent investment
vehicles when a performance hurdle is achieved, which in each case is subject to significant uncertainty and risk. During times
of market volatility, the fair value of the investments we own or manage are more variable, and volatility in the equity
markets may have a significant impact on our reported results. A decline in realized or unrealized gains, a failure to achieve a
performance hurdle, or an increase in realized or unrealized losses, would adversely affect our financial results.
The timing and receipt of carried interest from our investment vehicles are unpredictable and will contribute to the
volatility of our cash flows. With respect to our carry paying funds, subject to the terms of their respective governing
agreements, carried interest is generally eligible to be distributed to the general partner of the fund with a clawback provision
only after meeting certain conditions tied to performance. See “Item 1. Business—Business Segments—Asset Management
— Investment Vehicle Structures, Fee Arrangements and Carried Interest” for a summary of such conditions. Even after all
conditions are met, the general partner of a carry paying fund may decide to defer the distribution of carried interest to it to a
later date. Carried interest payments depend on our investment vehicles’ performance and opportunities for realizing gains,
which may be limited. It typically takes a substantial period of time to: (i) identify attractive investment opportunities, (ii)
raise all the funds needed to make an investment, and (iii) then to realize the cash value of an investment through a sale,
public offering or other exit to generate carried interest proceeds. To the extent an investment is not profitable, no carried
interest will be received from our investment vehicles with respect to that investment and, to the extent such investment
remains unprofitable, we will only be entitled to a management fee on that investment. We cannot predict when, or if, any
realization of investments will occur. See “Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity—Sources of Liquidity” for further information regarding the conditions for carried interest to become
distributable.
The timing and receipt of carried interest also vary with the life cycle of certain of our investment vehicles. For our carry-
paying investment vehicles that have completed their investment periods and are able to realize mature investments,
sometimes referred to as being in a harvesting period, we are more likely to receive larger carried interest distributions than
our carry-paying investment vehicles that are in their fundraising or investment periods.
Fee income, which we recognize when contractually earned, can vary due to fluctuations in AUM, the number of
investment transactions made by our investment vehicles, when such investments are made, the number of portfolio
companies we manage, the fee provisions contained in our investment vehicles and other investment products and
transactions by our capital markets business. In any particular quarter, fee income may vary significantly due to the variances
in size and frequency of transaction fees or fees received by our capital markets business.
Additionally, a decline in the pace, size, or value of investments by our investment vehicles would result in our receiving
less revenue from fees. The transaction, management, and monitoring fees that we earn are driven in part by the pace at
which our investment vehicles make investments and the size of those investments. Any decline in that pace or the size of
investments would reduce our revenue from transaction and management or monitoring fees. Likewise, during an attractive
selling environment, our investment vehicles may capitalize on increased opportunities to exit investments. While this would
generally be expected to increase the timing and receipt of carried interest, any increase in the pace at which our investment
vehicles exit investments, if not offset by new commitments and investments, could reduce future management fees.
Additionally, in certain of our investment vehicles that derive management fees only on the basis of invested capital, the pace
at which we make investments, the length of time we hold such investments, and the timing of disposition will impact our
revenues.
With respect to our insurance business, we have and may experience fluctuations in the new business volumes, and
resulting financial result impacts, of certain products, such as block reinsurance, pension risk transfer and funding
agreements. In addition, aspects of how our insurance business is required to report certain investments and liabilities has
added, and is expected to add, volatility to our financial results from quarter to quarter.
The agreements governing our carry-paying funds have in the past and may in the future give rise to a
contingent obligation that requires us to return or contribute significant cash amounts to our funds
and fund investors.
We have in the past and may in the future be required to return carried interest that we have received from investment
funds. The partnership documents governing our carry-paying funds across our asset classes include what are often called
“clawback” provisions. Under such an obligation, upon the liquidation of a fund or other event as set forth in the terms
governing the fund, the general partner is required to return, typically on an after-tax basis, previously distributed carry to the
extent that, due to the diminished performance of later investments, the aggregate amount of carry distributions received by
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the general partner during the term of the fund exceed the amount to which the general partner was ultimately entitled, after
taking into account the effects of any performance thresholds and hurdles. We would continue to be subject to such
obligation even if carry has been distributed to current or former employees through our carry pool. If such current or former
employees do not satisfy their share of any clawback obligation, we will be responsible for funding the entire obligation and
may need to seek other sources of liquidity to fund such an obligation. To the extent one or more obligations were to occur
for any one or more of our carry-paying funds, we might not have available cash to satisfy such obligation once it is realized,
putting us in breach of the fund’s governing agreements and potentially resulting in a material adverse impact on our ability
to raise additional or successor funds in the future. Even when there is sufficient available cash to satisfy any such obligation,
the realization of any such obligation may materially adversely impact our business and financial results, including by reducing
our realized performance income and realized investment income. See “Management's Discussion and Analysis of Financial
Condition and Results of Operations—Liquidity—Sources of Liquidity” for a discussion of carried interest repayment
obligations, including information about realized carried interest repayment in the fourth quarter 2025 relating to our Asian
Fund II.
The inability to raise capital from third-party investors for our investment vehicles, insurance business
and transactions could materially and adversely affect us.
We raise third party capital for our investment vehicles and insurance business, and we also raise capital for specific
transactions that we may sponsor or that are sponsored by third parties. The failure to continually raise adequate capital
could materially and adversely affect our AUM, revenues, liquidity and overall financial results.
Investment performance is one of the most significant factors in our ability to raise capital. Poor investment performance
for any reason, whether due to market conditions, valuations, pace of realizations, or other factors, including relative to
portfolio benchmarks, fee levels, or our competitors’ performance, may also materially adversely affect our ability to
fundraise. Certain investment vehicles, particularly those that provide investors with redemption rights, may require us to
maintain higher levels of liquidity, which may affect portfolio construction and could impact investment performance.
Our ability to raise capital is also dependent on market and economic conditions and investor perception, including the
general appeal of alternative asset investments or our financial products. Our ability to raise capital depends on numerous
factors, many of which are beyond our control, including economic conditions, financial market volatility, regulatory
developments, investor liquidity and competitive dynamics. Investors in our investment or insurance products may decide to
redeem their capital, or decide to seek financial products other than ours for any number of reasons, such as competitors’
terms or offerings, changes in interest rates that make other financial products more attractive, changes in investor
perception regarding our focus or alignment of interest, reputational concerns, how we manage conflicts of interest, changes
in investors’ views of portfolio construction or asset allocation, concerns about valuations, ability to meet redemption
requests, liquidity, or departures or changes in key personnel.
In connection with raising new investment vehicles or securing additional investments in existing vehicles, we may
negotiate terms for such vehicles that are materially less favorable to us than prior terms or terms of investment vehicles
advised by our competitors. Such terms may include reduced management fees, fee holidays, increased co-investment rights
or other economic or governance concessions, which could materially and adversely affect us in a number of ways, including
by reducing the fee revenues we earn. Competitive pressures and evolving investor expectations may require us to agree to
such unfavorable terms in order to attract or retain capital.
The number of investment vehicles for which we raise capital varies from year to year. Our flagship funds and other
funds have a finite life and a finite amount of commitments from fund investors. Once a fund nears the end of its investment
period, our ability to continue making investments and generating fees and carry depends on our ability to raise additional or
successor funds. Although our funds may continue to earn management fees after the expiration of their investment periods,
such fees are generally at a reduced rate. There is no assurance we would be able to raise successor funds of comparable
size, within similar timeframes, or on comparable terms. If we are unable to do so, or if fundraising is delayed, our revenues
may decrease as predecessor funds mature and associated fees decrease.
The ability to raise capital from institutional investors is critical and may be adversely affected by
factors beyond our control.
Institutional investors are significant investors in our investment funds and the investments syndicated by our capital
markets business. Institutional investors that experience decreasing returns, liquidity pressures, increased volatility, funding
shortfalls or difficulty maintaining target asset allocations may materially decrease or temporarily suspend making new
investments in our investment funds or with alternate asset managers generally. Such concerns could be exhibited, in
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particular, by public pension funds, which have historically been among the largest investors in alternative assets. Pension
funds have had and in the future may have funding problems that will likely be exacerbated by economic downturns.
Concerns with liquidity could cause such public pension funds or other institutional investors to reevaluate the
appropriateness of alternative assets. Reduced distributions from alternative asset investments or declines in other asset
classes may cause investors to exceed target allocations to alternative assets, limiting their ability to make new commitments.
In addition, certain institutional investors, including sovereign wealth funds and public pension funds, continue to
demonstrate an increased preference for alternatives to traditional fund structures, such as separately managed accounts or
specialized investment vehicles and, in some cases, consolidating their capital with fewer alternative asset managers. In order
to try to satisfy the evolving preferences of investors, we have sponsored, and will continue, to sponsor a wide array of
separately managed accounts and investor allocations to these separately managed accounts or specialized investment
vehicles may detract from the allocations potentially available to our funds or other traditional investment vehicles, which
may result in less profitability for us. There can be no assurance that historical or current levels of commitments to our funds
or other traditional investment vehicles from these investors will continue.
Moreover, certain institutional investors are demonstrating a preference to hire their own investment professionals and
to make direct investments in alternative assets without the assistance of large institutional investment advisers like us. Such
institutional investors may become our competitors and could cease to be our clients. Institutional investors may also decide
not to invest with large asset managers like us, for example, because of conflicts of interest arising from the size and
complexity of our business, including the allocation of investment opportunities among different funds and vehicles, including
those offered to individual investors. Given the breadth and complexity of our platform, including the management of
multiple funds, insurance assets and vehicles offered to individual investors, conflicts of interest may arise in the allocation of
investment opportunities, management attention or other resources. Any perception that we do not appropriately manage
such conflicts could adversely affect our relationships with institutional investors and our ability to raise capital from them.
For additional information about conflicts of interest that may impact our ability to raise capital, please see “—Risks Related
to Our Investment Activities—If we fail to effectively manage conflicts of interest that arise from our investment activities, our
reputation, business or financial results could be materially and adversely impacted or we may become subject to regulatory
scrutiny or litigation”. All of these factors could result in a smaller overall pool of available capital in our industry or a smaller
pool of institutional capital for our investment vehicles.
In addition, the asset allocation rules or investment policies to which institutional investors are subject could inhibit or
restrict their ability to make investments in our investment funds. This risk may be heightened at times of poor performance
in other asset classes or even strong performance in the asset classes we manage, as investors may need to rebalance their
portfolios to remain in compliance with these rules and policies. Coupled with any lack of distributions from their existing
investment portfolios, many of these investors may have disproportionately outsized remaining commitments to, and
invested capital in, a number of investment funds, which may significantly limit their ability to make new commitments to the
investment funds we manage, which could materially and adversely affect our financial performance.
The sale of financial products to individual investors exposes us to additional operational complexities,
regulatory requirements and other risks.
We have expanded and may continue to expand the number and types of financial products we offer to individual
investors. Offering financial products, whether investment opportunities in alternative asset strategies or insurance policies
like annuities, to individual investors exposes us to heightened levels of risks. Products offered to individual investors may be
subject to different and, in some cases, more extensive disclosure, marketing, distribution and investor protection
requirements than traditional institutional investment funds. In addition, the distribution of investment products to
individual investors may involve additional intermediaries, platforms or distribution channels and may subject us to evolving
regulatory standards regarding marketing practices, suitability determinations, fee disclosures, valuation methodologies and
redemption features. As a result, these initiatives may increase our exposure to public and regulatory scrutiny, consumer
complaints, private litigation, compliance costs and reputational harm. For additional information about the regulatory risks
relating to individual investors, please see “—Risks Related to Regulatory Matters—Distribution of financial products to
individual investors subjects us to heightened regulatory, litigation, and reputational risks, which may materially adversely
affect our business” and “—Risks Related to our Insurance Activities—The disruption of our third-party distribution network
may have a material adverse effect on us.”
Certain investment vehicles that we manage are publicly traded, which involves heightened risk of litigation, and
additional disclosure and governance obligations. In addition, certain of these and other investment vehicles are registered
under the Investment Company Act as investment companies. These funds and their investment advisers are subject to
extensive regulation, which, among other things, regulate the relationship between a registered investment company and its
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investment adviser and prohibit or severely restrict principal transactions and joint transactions. In addition, we have one or
more affiliates that provide investment advisory services to BDCs, which are also subject to certain restrictions and
prohibitions under the Investment Company Act. If the entity fails to meet applicable regulatory requirements, it may be
regulated as a closed-end investment company under the Investment Company Act and become subject to different
regulatory restrictions, which could limit its operating flexibility and in turn result in decreased profitability for us.
We have also launched U.S. holding company conglomerates, which together with similar non-U.S. investment vehicles
we refer to as K-Series, which are structured and operated in reliance on exclusions from the definition of an investment
company under the Investment Company Act. If any such entity were required to register as an investment company, the
applicable restrictions on capital structure, leverage, transactions with affiliates, governance, and operations would make it
impractical for the entity to operate its business as currently conducted and could materially and adversely affect our financial
results and results of operations. For additional information about certain regulatory risks relating to regulatory exemptions,
please see “—Risks Related to Regulatory Matters— If regulatory exemptions or exclusions on which we rely become
unavailable, we may become subject to additional restrictive and costly regulatory requirements, regulatory action or
liability”.
As we have offered more investment products to individual investors, the operational demands necessary to support
these types of investor products and the related business and operational complexity has also significantly increased.
Insurance products are subject to regulations regarding statements, required disclosures and claims handling and accordingly
require significant operational capabilities. Managing vehicles that offer periodic redemption features or are marketed to
individual investors may require more frequent valuations, additional investor communications, enhanced liquidity
management, more compliance and technology requirements, and more third-party service support. For example, our K-
Series vehicles and certain funds that provide for redemptions to individual investors require that we perform monthly or
daily valuations of net asset value and manage liquidity to satisfy potential redemption requests. For additional information
about valuation risks, please see “—The valuations of illiquid investments are subjective and uncertain, and any realizations of
our illiquid investments may occur at prices which differ from their carrying values” and for more information about liquidity
risks, please see “—The failure to manage, or the inability to access, adequate sources of liquidity could materially and
adversely affect KKR”. If we fail to effectively manage these risks, we could be subject to regulatory action, litigation,
reputational harm, or constraints on our ability to grow these products, any of which could materially and adversely affect our
business.
Even if our investment performance or product terms remain attractive, adverse market conditions or shifts in public
opinion relating to products that we offer could adversely affect our ability to expand or maintain these product offerings.
For example, products offered to individual investors may be more sensitive to negative publicity, whether it is caused by the
level of fees, the existence or improper management conflicts of interests, inability to satisfy redemption requests, service
challenges or others changes in investor sentiment. Negative publicity may also be caused by the activities of third-party
sponsors or insurers that are unaffiliated with us, which nevertheless could cause significant redemptions or surrenders,
result in reduced demand for our products, or cause us to reduce our economics to maintain investor interest in the products
we offer to individual investors.
The portion of our AUM we refer to as perpetual capital is not permanent and is subject to change.
We refer to a significant portion of our AUM as perpetual capital, because this AUM has an indefinite term with no
predetermined requirement to return invested capital to investors upon the realization of investments. This AUM includes
the capital of our evergreen products, which include investment vehicles registered under the Investment Company Act,
certain unregistered investment vehicles like our K-Series offered to individual investors, and listed companies like KREF and
Crescent Energy, as well as the capital of our insurance companies. However, in addition to fluctuations based on the
valuations of the underlying investments of the AUM, this capital is subject to material reduction, including through
withdrawals, redemptions, periodic payments such as dividends or required distributions, and termination of investment
advisory agreements, and these reductions may occur with minimal notice.
Our insurance companies have issued annuities and other life insurance policies that require certain contractual
payments to the policyholder. These policies may permit the policyholder to withdraw their funds or to surrender their policy
for distribution in advance of the policy term. In addition, our insurance companies have entered into reinsurance agreements
with counterparties, which provide for contractually provided payments, including to cover reinsured policyholder
obligations. Unless the inflows from writing new insurance policies and entering into new reinsurance transactions exceeds
outflows to pay contractual obligations, or the valuation of the assets backing our insurance liabilities increases in excess of
any expected appreciation, our permanent capital from our insurance subsidiaries and sponsored insurers would be reduced.
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See also “—The failure to manage, or the inability to access, adequate sources of liquidity could materially and adversely
affect KKR.”
Certain of our registered and unregistered investment vehicles, including our K-Series, permit their investors to redeem
their investments, which would have the effect of reducing our AUM. Substantial redemption requests could be triggered by
a number of events outside of our control, including poor investment performance, changes in market conditions or changes
in their perception of us as a reputable investment manager. A perception of significant redemptions, both with respect to
the investment vehicles we manage as well as investment vehicles that we do not manage but are in similar asset classes, may
also trigger other investors to seek redemptions of their investments as well. See also “—The failure to manage, or the
inability to access, adequate sources of liquidity could materially and adversely affect KKR.”
We have investment management agreements with certain registered and unregistered investment vehicles and listed
companies that we manage as well as with our insurance companies. Perpetual capital from these entities may be removed
completely from our AUM, because our investment management agreement with them may be terminated on little or no
notice for reasons specified in such agreement, including due to poor investment performance or regulatory compliance. See
“—Risks Related to Regulatory Matters.” In the case of any such terminations, the management and incentive fees we earn in
connection with managing such entities would immediately cease, which could result in a material adverse impact on our
revenues.
The actions of our portfolio companies may subject us to potential liabilities and cause us reputational
harm.
We often make controlling investments in companies or hold investments over which we have significant influence over
their management or operations. Although these portfolio companies operate their businesses independently from KKR’s own
businesses and independently from one another, our ownership interests, governance rights or involvement with these
portfolio companies may cause us to be deemed a control person or otherwise subject to theories of successor, aiding-and-
abetting or similar liability under applicable law. Alternative asset managers have in the past been held liable for acts of their
portfolio companies where the manager is alleged to have exercised control or to have authorized, or knowingly failed to
prevent or remediate, improper conduct, including with respect to the U.S. Foreign Corrupt Practices Act (the “FCPA”),
European antitrust laws, and financial crime laws. See “—Risks Related to Regulatory Matters—We are subject to substantial
regulatory risks due to our extensive and global investment activities.”
As a result, we may have liability for actions taken by, or failures to take action by, our portfolio companies, which may
subject us to civil or criminal liabilities. Any such liabilities could require our investment vehicles to pay substantial financial
sums, which may not be fully reimbursed for by the relevant portfolio company or covered by insurance. Any criminal
liabilities or other enforcement actions taken by regulators in response to actions or failures to act by our portfolio companies
could also involve our investment vehicles, our subsidiaries that operate such investment vehicles as its general partners or
manager, and our personnel involved with such portfolio company’s business.
In addition, activities by our portfolio companies and other companies in which we invest may be imputed to us. We
believe our reputation is critical to our business, including for attracting and retaining investors, maintaining relationships
with regulators and being viewed as an attractive investment partner. Any legal or regulatory action involving our portfolio
companies, including any settlement, or any negative publicity or adverse public perception regarding a portfolio company’s
actions, business, management or industry, may result in significant reputational harm to us, increased regulatory scrutiny
and additional regulatory exposure or litigation. In addition, we may elect to pay certain amounts or agree to other
consequences, including operational restrictions, to resolve matters involving any of our portfolio companies or investments
in order to mitigate potential reputational, regulatory, or other damage to our business. These developments could damage
our relationships with existing and prospective investors, employees, regulators and other stakeholders, and otherwise could
result in a material and adverse effect on KKR’s business or financial condition.
Changes in tax laws or an adverse interpretation by tax authorities may adversely impact our effective
tax rate and tax liability.
Our effective tax rate and tax liability is based on the application of current income tax laws, regulations and treaties,
which are complex and may be open to interpretation. Significant management judgment is required in determining our
provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net
deferred tax assets. Although we believe our application of current laws, regulations and treaties to be correct and
sustainable upon examination by tax authorities, tax authorities could challenge our interpretation resulting in additional tax
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liability or adjustment to financial results that could increase our effective tax rate or have other unforeseen adverse tax
consequences.
There could be significant changes in U.S. federal, state, local or non-U.S. tax law that may materially affect us, including
by increasing taxes owed in jurisdictions in which we or our portfolio companies operate. The likelihood and nature of any
such legislation is uncertain. For example, on July 4, 2025, the legislation commonly referred to as the One Big Beautiful Bill
Act (“OBBBA”), was enacted, which included amendments and extensions to certain provisions of the 2017 Tax Cuts and Jobs
Act. The impact of the OBBBA and other potential changes are uncertain and could materially increase the amount of taxes
we and our portfolio companies are required to pay and tax-related regulatory and compliance costs. In addition, further
rules relating to compensation for certain covered employees under Section 162(m) could reduce the amount of related tax
deductions available to us.
There could be significant changes in U.S. and non-U.S. tax law, regulations or interpretations that adversely affect the
taxation of carried interest and our ability to recruit, retain and motivate employees and key personnel. Investments must be
held for more than three years for carried interest to be treated for U.S. federal income tax purposes as long-term capital
gain. The holding period requirement may result in some of our carried interest being taxed as ordinary income to our U.S.
employees and other key personnel, which could materially increase the amount of taxes that they would be required to pay,
and this could adversely impact our ability to recruit and retain top talent. The incentive to hold investments for long-term
capital gain treatment may create a conflict of interest between investment vehicle investors (whose investments would
receive such capital gain treatment after a holding period of only one year) and KKR on the execution, closing or timing of
sales of investments in connection with the receipt of carried interest.
The Organization for Economic Co-operation and Development (an intergovernmental public policy organization, the
“OECD”) and government agencies in jurisdictions in which we and our affiliates invest or do business have maintained a focus
on multi-national companies. The OECD has sought to make changes to numerous long-standing tax principles through its
base erosion and profit shifting (“BEPS”) project, which is focused on a number of issues, including profit shifting among
affiliated entities in different jurisdictions, interest deductibility and eligibility for the benefits of double tax treaties. The
OECD finalized guidelines that recommend certain multinational enterprises to be subject to a minimum 15% tax rate (“Pillar
Two”).
Various countries have implemented or intend to implement the OECD’s recommended model rules. By way of example,
the Council of the European Union formally adopted Pillar Two and required all 27 EU member states to adopt local legislation
during 2023 to implement Pillar Two rules that apply in respect of the fiscal years beginning from December 31, 2023.
However, the current U.S. administration is not expected to adopt Pillar Two and has been working with the OECD to exempt
U.S. parented groups from certain aspects of Pillar Two, such as the Income Inclusion Rule (the “IRR”) and Undertaxed Profits
Rule (the “UTPR”), creating additional uncertainty as to the application of these rules to multinational enterprises with a U.S.
parent entity. Our business and our sponsored vehicles’ and portfolio companies’ businesses could be significantly impacted
if the model rules, or any future variation, have been or will be implemented in any of the countries in which our business, our
portfolio companies’ businesses, or our investment structures are located. Bermuda’s commitment to the OECD principles
has led it to adopt a corporate income tax that may increase tax expense and compliance costs for us. More generally, our
effective tax rates could increase, including by way of a possible denial of deductions or profits being allocated differently.
The OECD’s proposals may also lead to an increase in the complexity, burden and cost of tax compliance for us and our
portfolio companies. Given ongoing design, implementation, administration, and interpretation of such proposals, the timing,
scope, and impact of any relevant domestic legislation or multilateral conventions remain subject to significant uncertainty.
See Note 18 “Income Taxes” in our financial statements for further information regarding various tax matters.
Artificial intelligence may increase competitive, operational, legal and regulatory risks to our
businesses in ways that we cannot predict.
The use of artificial intelligence by us and others, and the overall adoption of artificial intelligence throughout the world,
may exacerbate or create new and unpredictable competitive, operational, legal and regulatory risks to our businesses. Any
changes from the use of artificial intelligence could potentially disrupt, among other things, our business models, investment
strategies, investment performance, operational processes, and our ability to identify and hire employees. Some of our
competitors may be more successful than us in the development and implementation of new technologies to address investor
demands, making investments or improve operations, including services and platforms based on artificial intelligence.
We use artificial intelligence and other quantitative analysis tools and models, developed by us and third-party service
providers. Such technology, analysis and modeling are highly complex and subject to limitations and risks that have the
potential to adversely impact us to the extent that we rely on artificial intelligence. If the data we, or third parties whose
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services we rely on, use in connection with the development or deployment of artificial intelligence is incomplete, inadequate
or biased in some way, the performance of our products, services, and businesses could suffer. Data in technology that uses
artificial intelligence may contain a degree of inaccuracy and error, which could result in flawed algorithms in various models
used in our businesses. Our personnel or the personnel of our service providers could, without our knowledge, improperly
utilize or misappropriate artificial intelligence and machine-learning technology while carrying out their responsibilities,
including relating to the entry of confidential information into a technology platform that is or becomes accessible by third
parties. The misuse or misappropriation of our data, unavoidable deficiencies in the practices associated with data collection,
training artificial intelligence technology on large data sets, and big data analytics and difficulties validating data, could have
an adverse impact on us.
Regulators are also increasing scrutiny and considering, and in some cases enacting, regulation of the use of artificial
intelligence technologies, including regarding the use of big data, diligence of data sets and oversight of data vendors. The
use of artificial intelligence by us or others may require compliance with legal or regulatory frameworks that are not fully
developed or tested, and we may face increased costs, litigation and regulatory actions related to our use of artificial
intelligence. See also “—Risks Related to Regulatory Matters—Privacy, data protection, cybersecurity and artificial intelligence
laws may increase compliance costs and subject us to enforcement risks and reputational risks”.
In addition, artificial intelligence may materially disrupt the industries in which we invest, the businesses of our portfolio
companies and the valuations of our investments. See also “—Risks Related to Our Investment Activities—Various conditions
and events outside of our control that are difficult to quantify or predict may have a significant impact on the valuation of our
investments”.
Cybersecurity failures and data security breaches could have a material adverse impact on our
businesses.
We are subject to various risks and costs associated with the collection, processing, storage and transmission of
proprietary, sensitive and otherwise confidential information, including personal information of our investors, insurance
policyholders, employees, contractors and other counterparties and third parties, to which we have access to and process
through a variety of media, including information technology systems. Breaches in security could potentially jeopardize our,
our employees’, our investment vehicle investors’, our insurance policyholders’ or our counterparties’ confidential and other
information processed and stored in, and transmitted through, our computer systems and networks. Any inability, or
perceived inability, by us to adequately address privacy concerns, or comply with applicable privacy laws, regulations, policies,
industry standards and guidance, related contractual obligations, or other privacy legal obligations, even if unfounded, could
result in significant regulatory and third-party liability, increased costs, disruption of our business and operations, and a loss of
investor confidence and other reputational damage.
We continuously face various security threats on a regular basis, including ongoing cybersecurity threats to, and attacks
on, our information technology infrastructure that are intended to gain access to our confidential information, destroy data or
disable, degrade or sabotage our systems. The risk of a security breach or disruption has increased as the number, intensity,
and sophistication of attempted attacks and intrusions from around the world have increased. Although we take protective
measures and endeavor to modify them as circumstances warrant, our computer systems, software and networks may be
vulnerable to unauthorized access, theft, misuse, computer viruses or other malicious code, and other events that could have
a security impact (including the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering,
and other means to affect service reliability and threaten the confidentiality, integrity, and availability of information). Our
employees have been and expect to continue to be the target of fraudulent calls and emails, and the subject of
impersonations and fraudulent requests for money, which we or the services providers we retain, like administrators, paying
agents and escrow agents, may not be able to detect or protect against. These same cybersecurity breaches, cyberattack and
cyber intrusions could also be employed against our various stakeholders or other third parties, including attempts to
impersonate KKR or its employees, which could cause similar security impacts to our stakeholders, including our portfolio
companies, and other third parties and materially and adversely impact us. The costs related to cyber or other security
threats or disruptions may not be fully insured or indemnified by others, including by our service providers.
Our cybersecurity risk management efforts and our investment in information technology may not be successful in
preventing cyber incidents, which could have a material adverse effect upon our reputation, business, operations, or financial
condition. The techniques used by cyber criminals change frequently, may not be recognized until launched, and can
originate from a wide variety of sources. Furthermore, if we experience a cybersecurity incident and fail to comply with the
relevant notification laws and regulations, it could result in regulatory investigations and penalties, which could lead to
negative publicity and may cause our investors and clients to lose confidence in the effectiveness of our security measures.
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See also “—Our reliance on third parties in the operation of our business exposes us to operational, reputational and
other risks”.
We are subject to focus by certain stakeholders on sustainability matters.
Some investors in our investment vehicles, stockholders, regulators and other stakeholders are focused on sustainability
matters, such as climate change and environmental stewardship, human rights, support for local communities, corporate
governance and transparency, or other environmental- or social-related areas. Certain investors and other stakeholder
groups have also increased their activism and scrutiny of asset managers’ approaches to considering sustainability matters as
part of their investment management decision-making, including by urging alternative asset managers to take (or refrain from
taking) certain actions that could adversely impact the value of an investment and at times have conditioned future capital
commitments on such actions. Further, a number of U.S. states and non-U.S. countries have enacted or proposed policies,
legislation, issued related legal opinions and engaged in related litigation regarding sustainability matters. Increased focus
and activism related to sustainability matters may constrain our capital deployment opportunities. There can be no assurance
that we will be able to accomplish any sustainability-related goals or commitments that we have announced or may announce
in the future, as such statements are, or reflect, estimates, aspirations or expectations only at the time of announcement.
More broadly, there can be no assurance that our responsible investment policies and procedures will not change, potentially
materially, or may not be applicable for a particular investment, because we continuously review our approach to these
issues. Growing interest on the part of investors and regulators in sustainability matters and increased demand for, and
scrutiny of, asset managers’ sustainability-related disclosure, have also increased the risk that asset managers could be
perceived as, or accused of, making inaccurate or misleading statements regarding these matters. The occurrence of any of
the foregoing could have a material and adverse impact on us, including on our reputation.
Although we view our sustainable investing approach as a tool for value creation and value protection, different
stakeholder groups and regulators across the jurisdictions and localities where we operate have divergent views on the merits
of integrating sustainability considerations into the investment process and have, as applicable, increasingly expressed
divergent views and investment expectations with respect to sustainability initiatives and, as applicable, pursued divergent
regulatory initiatives. The increased regulatory and legal complexity and heightened risk of public scrutiny could result in
conflicting sustainability-related regulations and legal frameworks that increase our compliance costs and our risk of non-
compliance or impact our reputation and lead to increased inquiries, investigations, challenges by federal or state authorities,
and reactive stakeholder engagements. Moreover, if our practices do not meet evolving stakeholders’ expectations and
standards, or if we are unable to satisfy all stakeholders, our reputation, ability to attract or retain employees and our
business could be negatively impacted.
Risks Related to Regulatory Matters
We are required to comply with numerous laws and regulations applicable to our business in various countries around
the world. Our compliance with these laws and regulations is critical to our ability to operate our business, and the potential
failure to comply subjects us to many material risks and uncertainties as discussed below. For information about the laws and
regulations applicable to our business, please also see “Business—Regulation”. For additional regulatory risks related to
Global Atlantic, please also see “—Risks Related to Our Insurance Activities—Our insurance business is heavily regulated, and
such regulations may have a material and adverse effect on our business, financial condition and results of operations.”
Our business is subject to complex, extensive and evolving laws, and the failure to comply with
applicable laws may materially and adversely affect us.
We are a global financial institution, and our business is subject to complex, extensive and evolving laws and regulations
in the jurisdictions in which we operate around the world. Our asset management and capital markets businesses are
generally governed by securities laws and regulations applicable to investment advisers, broker-dealers, and other financial
services firms, including extensive regulatory requirements relating to registration, fiduciary obligations, disclosure, reporting,
recordkeeping, supervision and compliance. In addition, our insurance business is subject to complex laws and extensive
regulations applicable to insurance companies as well as regulations applicable to investment advisers, broker-dealers, and
other financial services firms, including requirements relating to licensing, capital adequacy, investments, governance, policy
terms, reporting and compliance. Our compliance with these securities and insurance laws and regulations and the other laws
and regulations applicable to our business (which may evolve and change, from time to time) is critical to our ability to
operate our business and is costly, operationally intensive, and requires significant management attention. Any failure to
comply with these laws or regulations, or any changes in the scope, interpretation, application, or enforcement of such laws
and regulations, could materially and adversely affect our business, results of operations, and financial condition.
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Adverse regulatory actions may result in significant sanctions, liabilities, operational restrictions,
litigation, reputational harm and other material and adverse impacts to our business.
Our compliance with securities and insurance laws and regulations, as well as other laws and regulations applicable to
our business, is subject to frequent examinations, inquiries and investigations by U.S. federal and state, as well as non-U.S.,
governmental agencies and regulatory authorities (including self-regulatory organizations) in the jurisdictions in which we
operate. Governmental agencies and regulatory authorities (including self-regulatory organizations) often have broad
discretion to interpret and apply the laws and regulations applicable to our industry and our business and to determine areas
of focus for their examinations, inquiries, and investigations. Moreover, many of these laws and regulations authorize such
entities to conduct enforcement actions and other proceedings that may result in civil or criminal liability, penalties, and fines;
or other sanctions, including censures, cease-and-desist orders, settlements or revocations, suspensions or expulsions of
applicable memberships, licenses, registrations, authorizations or other regulatory approvals that, in any of these cases, may
apply with respect to us or any one or more of our businesses, employees, investments or portfolio companies. In addition,
convictions, injunctions, sanctions or settlements imposed by a governmental authority could form the basis for automatic or
discretionary limitations on our memberships, licenses, registrations, authorizations or other regulatory approvals, or our
ability or the ability of our affiliates to rely on exemptions, that are administered by a different governmental authority. Any
of these actions or consequences could materially and adversely affect us.
Any resolution of claims brought by a governmental agency or regulatory authority (including self-regulatory
organizations) may, in addition to the imposition of significant monetary penalties or other sanctions, require an admission of
wrongdoing or result in adverse limitations or prohibitions on our ability to conduct our business activities, including potential
statutory disqualifications, third-party oversight of various business processes, or the divestiture of investments. Actions by a
governmental agency or regulatory authority in one area of our business could affect other areas of our business, including
our joint venture partners and portfolio companies, which could, in turn, materially and adversely affect our business, results
of operations and financial condition. Even if an investigation or proceeding does not result in a sanction or the sanction
imposed is not material in monetary terms, the investigation, proceeding, action, imposition of sanctions or general
perception of impropriety could still significantly harm our reputation, adversely impact our relationship with our regulators,
result in increased future regulatory scrutiny, result in the loss of investors and investment opportunities, and place us at a
material disadvantage to our competitors.
The suspension, revocation, or limitation of our regulatory registrations or licenses may materially
adversely affect our business.
As a regulated financial institution, we rely on our regulatory registrations and licenses around the world in order to
conduct our business. The suspension, revocation, or limitation of our regulatory registrations or licenses may materially
adversely affect our business and potentially prohibit our ability to conduct our business at all. For example, we operate
registered investment advisers and broker-dealers in the United States and around the world, and the suspension, revocation
or limitation of our registrations as an investment adviser or as a broker-dealer would limit or could even prohibit us from
conducting our asset management and capital markets businesses in the jurisdictions in which we currently operate.
A U.S. investment adviser’s registration under the Investment Advisers Act may be suspended, revoked, or otherwise
limited as a result of, among other things, failure to meet eligibility requirements for registration with the Securities and
Exchange Commission (“SEC”), violations of applicable federal securities laws or fiduciary duties, violations of criminal laws,
materially inaccurate or incomplete regulatory filings, or as the result of disciplinary or enforcement actions by the SEC or
other federal, state or non-U.S. regulators, including actions based on criminal convictions, guilty pleas, or injunctions
involving the adviser or its associated persons. In particular, investment advisers are subject to heightened regulatory
scrutiny with respect to the identification, disclosure and management of conflicts of interest, including conflicts arising from
principal transactions, cross trades or other transactions in which the adviser or its affiliates have a financial or other interest.
See “—Risks Related to Our Business—We may pursue new business opportunities, strategic initiatives, or investment
opportunities that involve new or unique business, regulatory or other complexities and risks” and “—Risks Related to Our
Investment Activities—If we fail to effectively manage conflicts of interest that arise from our investment activities, our
reputation, business or financial results could be materially and adversely impacted or we may become subject to regulatory
scrutiny or litigation”.
A U.S. broker-dealer’s registration under the Securities Exchange Act of 1934 may be suspended, revoked, or otherwise
limited as a result of, among other things, violations of federal securities laws or regulations, failure to comply with the rules
and regulations of the SEC and the Financial Industry Regulatory Authority (“FINRA”), materially inaccurate or incomplete
regulatory filings, failure to maintain required net capital or supervisory systems, insolvency, criminal convictions or
injunctions involving the broker-dealer or its associated persons, or as the result of disciplinary or enforcement actions by the
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SEC, FINRA or other federal, state or non-U.S. regulators, including actions based on the conduct of affiliates or associated
persons. Similarly, the Investment Company Act may disqualify certain persons and their affiliates from acting in various
capacities for U.S. registered funds, including as investment adviser, as a result of certain convictions and injunctions.
We also rely on similar registrations in order to conduct our asset management business outside of the United States .
For example, in Europe, we are an AIFM registered with the Central Bank of Ireland under the AIFMD, and in the United
Kingdom, we are regulated by the FCA under the FSMA. In addition, in Asia, we are a financial instruments business operator
under the Financial Instruments and Exchange Act of Japan and a licensed asset manager and broker-dealer with the
Securities and Futures Commission in Hong Kong, and we conduct fund management activities under license from the
Monetary Authority of Singapore. For more information, see “Business—Regulation”.
In addition, an insurance company’s license or authorization may be suspended, revoked, or otherwise limited as a result
of, among other things, failure to meet applicable solvency, capital, or reserve requirements; deficiencies in risk management,
internal controls, or governance; violations of applicable insurance laws or regulations; inaccurate or incomplete regulatory
filings or disclosures; unsafe or unsound business practices; failures in market conduct or consumer protection compliance; or
as a result of regulatory examinations, supervisory actions, or enforcement proceedings. Insurance regulators have broad
authority to impose corrective actions, restrictions, enhanced oversight, or other regulatory measures, including in
connection with capital adequacy, investment practices, governance, reporting, or market conduct matters, and adverse
regulatory actions affecting our insurance subsidiaries could limit their ability to write new business, require changes to
investment or operating practices, restrict dividend capacity or intercompany arrangements, or otherwise materially
adversely affect our insurance business and the results of our operations. See, generally, “—Risks Related to Our Insurance
Activities”.
Any suspension, revocation, limitation, conditioning, or failure to obtain or renew licenses, registrations, authorizations,
exemptions, or approvals applicable to any of our businesses, in the United States or in any other country in which we
operate around the world, could restrict or prohibit our ability to conduct our business, require restructuring of business lines,
limit products we offer, impede fundraising, restrict transaction activity, or otherwise materially adversely affect our business.
See also “—Adverse regulatory actions may result in significant sanctions, liabilities, operational restrictions, litigation,
reputational harm and other material and adverse impacts to our business”.
Changes in the regulatory framework applicable to our business, including the loss of exemptions or
the application of enhanced group-level regulation, may materially adversely affect us.
Our business operates within regulatory frameworks globally that distinguish among different types of financial activities,
products, organizational structure, and other factors. These regulatory frameworks, including the scope, availability, and
interpretation of exemptions, exclusions, and tailored regulatory requirements, are subject to change. If the regulatory
framework applicable to our business were to change, we could become subject to additional or more comprehensive
regulation in any one or more jurisdictions in which we operate, which may cause material and adverse impacts to our
business. The regulatory framework applicable to our business may change for a number of reasons, including through
amendments to existing laws or regulations; changes in regulatory interpretation or supervisory expectations; changes in
enforcement priorities or activity; evolving regulatory views regarding, among other things, market structure, investor
protection, or financial stability; changes in how our business activities or organizational structure are viewed by regulators;
disqualifying events involving us, our affiliates, or associated persons; or changes in our business activities or organizational
structure or the growth or expansion of our business, including our expansion into new geographies, offering new investment
or insurance products, or changing the way we raise capital from investors.
In particular, regulatory frameworks applicable to our business may evolve over time. For example, our private credit
strategies and insurance-adjacent lending activities operate largely outside the traditional banking system and are subject to a
complex and developing set of regulatory regimes, including securities, insurance, derivatives, banking, and financial stability
laws. Although these activities are conducted through entities that are not regulated as banks, they have increasingly
attracted regulatory attention due to their scale, growth, use of leverage, liquidity characteristics, interconnectedness with
regulated financial institutions and potential relevance to broader financial markets. Regulatory authorities may adopt new or
revised laws, regulations, guidance, or supervisory approaches applicable to these activities. Such developments could include
heightened reporting or disclosure requirements, limitations on leverage, increased liquidity requirements, restrictions on
investment strategies or asset concentrations, or enhanced governance or risk-management expectations. In addition,
regulatory initiatives relating to non-bank financial intermediation or so-called “shadow banking,” as well as financial-stability-
oriented regulation, could result in the recharacterization of certain of our private credit or insurance-adjacent activities or
the imposition of activity-based or group-level regulatory requirements that have historically applied to banks or other
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systemically important financial institutions, which could materially adversely affect our business, financial condition, and
results of operations.
Moreover, given the scale and scope of our business and financial activities, regulators may evaluate our business and
risk profile on a consolidated or group-wide basis rather than solely by reference to individual regulated entities. In the United
States, the Financial Stability Oversight Council has authority to designate certain non-bank financial companies as
systemically important financial institutions, which could subject a designated entity to enhanced supervision and regulation.
Similarly, in the European Union and the United Kingdom, groups that engage in both insurance and investment activities may
be subject to supplementary group-wide supervision under the Financial Conglomerates Directive and its UK equivalent. If we
were to become subject to such enhanced or group-level regulatory regimes, we could face materially increased regulatory
burdens, governance, reporting, capital, liquidity, or risk-management requirements, restrictions on business activities or
intercompany arrangements, or other limitations that could materially adversely affect our business, financial condition, and
results of operations.
For matters that may specifically affect our insurance business, please see “—Risks Related to Our Insurance Activities—
Our insurance business is heavily regulated, and such regulations may have a material and adverse effect on our business,
financial condition and results of operations.”
If regulatory exemptions or exclusions on which we rely become unavailable, we may become subject
to additional restrictive and costly regulatory requirements, regulatory action or liability.
We regularly rely on exemptions, exclusions and other regulatory accommodations under U.S. and non-U.S. laws and
regulations in conducting our asset management, capital markets and insurance businesses. The unavailability of these
exemptions or exclusions for any reason, including changes in law, changes in regulatory interpretation, disqualifying events
involving us, our affiliates, or associated persons, or changes in our business activities or organizational structure, may subject
us or our investment vehicles to additional restrictive and costly regulatory compliance requirements, regulatory action or
third-party claims, or other otherwise materially and adversely affect our business.
In particular, we rely on exemptions from requirements pursuant to the Securities Act of 1933, the Securities Exchange
Act of 1934, the Investment Company Act, the Commodity Exchange Act of 1936, and the Employee Retirement Income
Security Act of 1974 (“ERISA”) in conducting our business activities, as well as exemptions from various foreign regulatory
requirements. These exemptions are often highly complex, subject to evolving interpretation, and may in certain
circumstances depend on compliance by third parties or factual determinations that may be outside of our control.
For example, in raising new funds or other investment vehicles in the United States, we typically rely on private
placement exemptions from registration under the Securities Act, including Rule 506 of Regulation D. If we, our investment
vehicles or any of the covered persons associated with our investment vehicles were to become subject to a disqualifying
event, which includes a variety of criminal, regulatory and civil matters, one or more of our investment vehicles could lose the
ability to raise capital in a Rule 506 private offering, which could materially impair our ability to raise capital for existing and
new investment vehicles. The occurrence of a disqualifying event would also materially and adversely affect our ability to
raise or syndicate capital for our transactions and for third parties and otherwise materially and adversely affect our ability to
conduct our capital markets business, which depends on our ability to participate in unregistered securities offerings. As we
expand the array of vehicles that we offer to individual investors, we may increasingly rely on the Rule 506(c) safe harbor,
which permits general solicitation and advertising but requires enhanced procedures to verify accredited investor status,
increasing compliance complexity and execution risks. Outside of the United States, we also rely on similar private placement
exemptions and marketing registrations, for example under the AIFMD in Europe, the Financial Services and Markets Act 2000
(as amended and supplemented by statutory instruments) and the Alternative Investment Fund Managers Regulations 2013
(as amended) in the United Kingdom, the Financial Instruments and Exchange Act in Japan, and the Securities and Futures Act
in Singapore.
In addition, certain of our investment vehicles, including our K-Series vehicles, are structured and operated in reliance on
exclusions from the definition of an investment company under the Investment Company Act. If any such entity were
required to register as an investment company, the applicable restrictions on capital structure, leverage, transactions with
affiliates, governance, and operations would make it impractical for the entity to operate its business as currently conducted
and could materially and adversely affect our financial results and results of operations.
In the United States, the CFTC and the SEC regulate transactions in futures and swaps as well as entities that enter into
those transactions. We are also subject to similar regulations when we trade derivatives in non-U.S. jurisdictions. These
regulations may limit our trading activities and our ability to implement effective hedging strategies or increase the costs of
compliance. We generally operate our businesses pursuant to exemptions from registration, but certain transactions in
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futures, swaps and other derivatives remain subject to regulatory requirements regardless of our registration status. We and
other asset management firms rely on an exemption from aggregation for portfolio companies that hold positions in the
relevant contracts. Our insurance subsidiaries must also comply with applicable insurance and other regulations with respect
to hedging. Any changes in application or interpretation of the rules applicable to futures, swaps and other derivatives could
result in significant costs for us and our investment vehicles.
Distribution of financial products to individual investors subjects us to heightened regulatory,
litigation, and reputational risks, which may materially adversely affect our business.
As part of our growth strategy, we have distributed and expect to continue distributing certain of our investment and
insurance products to individual investors. In some cases, our financial products are distributed indirectly through third-party
managed vehicles sponsored by brokerage firms, banks, or third-party feeder providers, and in other cases directly to the
clients of banks, independent investment advisers, and broker-dealers. We also create investment products specifically
designed for direct investment by individual investors in the United States and in non-U.S. jurisdictions. Products offered to
individual investors are subject to heightened regulatory scrutiny, prescriptive conduct standards, and increased litigation risk
compared to products offered primarily to institutional investors.
For example, in the United States, the public offering and sale of securities to individual investors is subject to the anti-
fraud and other investor protection provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and, where
applicable, the Investment Company Act, which may subject issuers and their affiliates and control persons to heightened
regulatory scrutiny and to claims by private plaintiffs alleging that such products were inappropriately marketed, inadequately
disclosed, or otherwise offered or sold in violation of applicable securities laws. We have sponsored and advise, or sub-advise,
investment products whose structuring and investments in illiquid assets are novel and untested. In addition, U.S. broker-
dealers and their associated persons are subject to laws and regulations governing the sale of financial products to individual
investors, including Regulation Best Interest, which requires recommendations to retail customers to be made in the
customer’s best interest. These regulations also apply to third-party broker-dealers and any broker-dealers we operate that
distribute our investment or insurance products directly to individual investors. Compliance with such regulations and related
disclosure requirements, conflict-management, supervision, and recordkeeping requirements may impose additional costs,
operational complexity, and supervisory obligations on us, and may impact our ability to distribute our financial products to
individual investors. See also “—Risks Related to Our Insurance Activities—Our insurance business is heavily regulated, and
such regulations may have a material and adverse effect on our business, financial condition and results of operations.”
In addition, various non-U.S. laws and regulations also govern the sale of financial products to individual investors,
including, for example, Directive 2014/65/EU (MiFID II), Directive 2011/61/EU (AIFMD), and Regulation 2015/760/EU (ELTIF
Regulation) which govern the sale of financial products to individual investors in the European Economic Area (the “EEA”).
These EEA directives and regulations contain requirements for, among other things, marketing, investor suitability
assessments, and conflicts of interest management, and certain of these requirements also apply to distributors, placement
agents and other intermediaries that distribute our products to individual investors. Moreover, although the EEA’s directives
and regulations are intended to create an EEA-wide harmonized framework, individual EEA member states may supplement
them with their own national rules, which adds to complexity and compliance risks.
The distribution of our products to individual investors often occurs through third-party channels that we do not control.
Although we conduct due diligence and establish onboarding and contractual arrangements with such distributors, we may
not be able to effectively monitor or control how our products are marketed, recommended, or sold. As a result, we may be
exposed to regulatory inquiries, enforcement actions, litigation, or reputational harm arising from allegations that our
products were sold to investors for whom they were unsuitable or inadequately disclosed, even where such conduct was
undertaken by third parties. Similar risks arise if our employees involved in distribution or oversight of third-party distributors
fail to adhere to applicable compliance or supervisory requirements. Legislative and regulatory developments may affect our
retail strategy. In the United States, initiatives intended to expand access by participants in 401(k) and other defined
contribution plans to alternative investments may create new opportunities but also raise complex regulatory, fiduciary,
disclosure, valuation, liquidity, and operational issues under securities and other applicable laws. We may incur significant
costs to design and implement products and compliance frameworks to access such channels, and those costs may not be
recoverable if regulatory requirements change, are delayed, or do not take effect. At the same time, competitors may pursue
these opportunities more aggressively, potentially placing us at a competitive disadvantage. Expanding our focus on
individual investors may also subject us to increased scrutiny regarding fees, liquidity, valuation, marketing, and disclosures,
increase the risk of private litigation or regulatory enforcement, and could be perceived by our institutional investors as
creating conflicts of interest or a shift in strategic focus, any of which could materially adversely affect our business, results of
operations, and financial condition. See also “—Adverse regulatory actions may result in significant sanctions, liabilities,
operational restrictions, litigation, reputational harm and other material and adverse impacts to our business.”
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Regulations impacting the insurance industry and insurance companies owned by alternative asset
managers may adversely affect our business.
The NAIC and task forces and working groups appointed by it as well as individual U.S. state insurance regulators continue
to consider various initiatives to change and modernize the solvency framework applicable to regulated insurance companies.
These initiatives include enhancing the ability of state insurance regulators to effectively monitor the solvency and risks faced
by an insurer within a larger group and when engaging in reinsurance transactions with other insurers. Although initially the
NAIC’s actions were driven by growing concerns related to companies owned by alternative asset management firms, the
NAIC and individual state insurance regulators have shifted toward an activity-based regulatory approach, signaling continued
potential for additional regulation. The NAIC and state insurance regulators have adopted and continue to evaluate new
regulations relating to affiliates and investment structures (including revisions to the capital charges for asset-backed
securities, in particular CLOs), investment management agreements, governance standards, market conduct practices and use
of third-party administrators. For example, the NAIC and U.S. state insurance regulators have increasingly focused on the
terms, structure, and negotiation of investment management agreements.
As part of their efforts to address potential risks stemming from an insurance company’s relationship with alternative
asset managers that may impact the insurance company’s risk profile, regulators have increased their scrutiny of certain
structured investments held by insurance companies, the appropriateness of investment ratings and potential conflicts of
interest (including affiliated investments), and potential misalignment of incentives. This growing scrutiny may increase the
risk of regulatory actions against our insurance business and could result in new or amended regulations that limit our ability
as an investment adviser, or make it more burdensome or costly, to enter into or amend existing investment management
agreements with insurance companies and thereby grow our insurance strategy. Additionally, the group-wide supervisor for
our insurance business is the Indiana Department of Insurance. The Indiana Department of Insurance has informed us that it
will be part of the International Association of Insurance Supervisors’ Global Monitoring Exercise, a risk assessment
framework to monitor key risks and trends and to detect the potential build-up of systemic risk in the global insurance sector
that also includes all Internationally Active Insurance Groups (“IAIGs”). IAIGs are expected to be subject to group-wide capital
standards once adopted by the United States. At this time, we cannot accurately predict whether we will be named or
designated as an IAIG or the impact, if any, on us.
See also “—Risks Related to Our Insurance Activities—Our insurance business is heavily regulated, and such regulations
may have a material and adverse effect on our business, financial condition and results of operations.”
We are subject to substantial regulatory risks due to our extensive and global investment activities.
As a global alternative asset manager, we regularly engage in transactions involving equity and debt investments,
mergers, acquisitions, financings, restructurings, exits, and other investment activities across numerous jurisdictions. These
transactions are subject to a wide range of complex laws and regulations, including securities, antitrust, foreign investment,
sanctions, export controls, anti-corruption, and other regulations administered by U.S. and non-U.S. governmental
authorities.
In addition to the laws and regulations arising from our investment activities, we also become subject from time to time
to the laws and regulations applicable to the businesses of our portfolio companies, including the regulations related to the
U.S. Federal Energy Regulatory Commission, the U.S. Federal Communications Commission, and the U.S. Defense
Counterintelligence and Security Agency as well as various laws and regulations of non-U.S. jurisdictions, such as those
promulgated by the U.K. Financial Conduct Authority, the Swedish Financial Supervisory Authority, the German Federal
Financial Supervisory Authority, and the Australian Prudential Regulation Authority. Compliance with these laws and
regulations is highly fact-specific, requires significant time, resources, and coordination across multiple jurisdictions, and is
subject to heightened regulatory scrutiny and enforcement. Compliance with these laws and regulations is highly fact-
specific, requires significant time, resources, and coordination across multiple jurisdictions, and is subject to heightened
regulatory scrutiny and enforcement.
Our ability to comply with many of these requirements depends in part on obtaining timely, complete, and accurate
information from portfolio companies, management teams, counterparties, and third-party advisers, including information
relating to operations, ownership structures, counterparties, customers, and historical conduct. We may not always be able to
independently verify such information, and we rely significantly on our portfolio companies to provide such information to us.
In some cases, inaccurate, incomplete, or delayed information may not be identified until after a transaction has closed,
which could result in regulatory investigations, the reopening of prior approval processes, the imposition of remedial
measures or sanctions, or other adverse consequences for us and our portfolio companies. See also “—The actions of our
portfolio companies may subject us to potential liabilities and cause us reputational harm”.
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Compliance with these transactional regulatory requirements is costly and operationally complex, requiring substantial
investment in personnel, systems, controls, and external advisers. These costs may increase as regulatory regimes become
more expansive, enforcement activity intensifies, or new jurisdictions or asset classes are added to our investment activities.
Failure to comply, or errors in assessing or implementing compliance requirements in connection with our transactions, could
subject us or our portfolio companies to civil or criminal penalties, fines, sanctions, judgments, remedial obligations,
transaction delays or prohibitions, reputational harm, or other adverse consequences. In certain circumstances, we or our
personnel could also be subject to civil or criminal investigations or enforcement actions based on the conduct of portfolio
companies, joint venture partners, counterparties, or other third parties, including under theories of control person,
successor, or aiding-and-abetting liability. The failure to effectively manage these risks, or significant increases in compliance
burdens or enforcement exposure, could materially adversely affect our business, results of operations, financial condition,
and reputation. See also “—Our business is subject to complex, extensive and evolving laws, and the failure to comply with
applicable laws may materially and adversely affect us” and “—Adverse regulatory actions may result in significant sanctions,
liabilities, operational restrictions, litigation, reputational harm and other material and adverse impacts to our business”.
Various investment-related and competition laws may limit our investment opportunities and subject
us to adverse regulatory consequences.
As a global alternative asset manager with a broad investment platform, our ability to identify, pursue, and consummate
attractive investment opportunities may be constrained by various investment-related and competition laws, including
antitrust, merger control, foreign direct investment (“FDI”) and similar laws and regulations that aim to control investment
activity in various jurisdictions around the world. These regimes may restrict the types of transactions we can pursue, the
industries or assets in which we can invest, the structures through which we can invest, or the investors that can participate in
them, particularly given our size, global footprint, and ownership of, or relationships with, a wide range of portfolio
companies and affiliates.
In many cases, the potential applicability of investment-related and competition laws may deter us from pursuing certain
investment opportunities, limit our ability to finance existing functions, or require us to structure transactions in ways that are
less attractive or less competitive, including by limiting ownership levels, governance rights, syndication arrangements, co-
investor participation, or exit alternatives. In addition, counterparties, sellers, financing sources, or co-investors may be
unwilling to engage in transactions subject to extended or uncertain regulatory review, or may prefer bidders with simpler
ownership structures or perceived lower regulatory risk, placing us at a competitive disadvantage.
Our transactions are often subject to investment-related and competition laws that require pre-closing or post-closing
notifications, approvals, or clearances in connection with our investment activities, including under U.S. antitrust laws and
national-security-focused regimes such as the U.S. Foreign Investment Risk Review Modernization Act, pursuant to which the
Committee on Foreign Investment in the United States may review, block, or impose conditions on investments by non-U.S.
persons in U.S. businesses or real assets. Many jurisdictions around the world have similar or comparable antitrust and FDI
regimes. Additionally, certain jurisdictions may impose restrictions or prohibitions on businesses making investments in other
countries or otherwise restrict investment activities. For example, the U.S. Outbound Investment Security Program imposes
notification requirements and prohibitions for certain investments in entities engaged in specified technology sectors outside
of the United States. The prospect of review or restrictions under these regimes may narrow the universe of feasible
transactions, delay decision-making, or require significant resources to evaluate regulatory risk before we can determine
whether to pursue an opportunity. Determining which investment-related and competition laws and regulations apply to any
particular transaction, identifying the applicable filing, notice, approval, or other requirements that may be triggered under
such laws and regulations, and ensuring compliance with all applicable requirements can be complex and resource-intensive.
Any of the foregoing could reduce the number or attractiveness of investment opportunities available to us, increase the
time, cost, and complexity associated with evaluating and executing transactions, limit our ability to deploy capital efficiently,
adversely impact our competitive positions or otherwise materially adversely affect our investment activities. Failure to
comply with these laws and regulations, or allegations of non-compliance, could prevent us from completing transactions, and
could subject us, our employees and our portfolio companies to civil or criminal sanctions, fines, penalties, remediation
obligations, restrictions on investment activities, enhanced monitoring or oversight, requirements to divest or restructure
investments, and significant reputational harm. See also “—Adverse regulatory actions may result in significant sanctions,
liabilities, operational restrictions, litigation, reputational harm and other material and adverse impacts to our business”.
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Financial crime laws may limit our investment and capital raising activities and subject us to adverse
regulatory consequences.
Our business is subject to a wide range of laws and regulations relating to the prevention of financial crime, including
anti-corruption, economic sanctions, and anti-money laundering and countering the financing of terrorism ("AML/CFT") and
similar laws and regulations administered by U.S. and non-U.S. governmental authorities. These include, among others, FCPA,
economic sanctions and trade control laws and regulations administered by the U.S. Department of the Treasury’s Office of
Foreign Assets Control, the U.S. Department of Commerce, and the U.S. Department of State, AML/CFT requirements
administered by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network, as well as similar laws and
regulations administered by non-U.S. authorities, including EU and UK sanctions regimes and the UK Bribery Act. These laws
and regulations are complex, may in some cases impose liability regardless of intent or knowledge, may be applied
extraterritorially, and may impose overlapping or conflicting requirements, creating significant compliance and enforcement
risk.
Compliance with financial crime laws can be highly fact-specific and often requires collection of and depends on
information regarding counterparties, including ownership structures, business practices, and historical conduct, which may
be incomplete, inaccurate, or difficult to obtain, particularly in connection with cross-border transactions or investments in
jurisdictions with less developed regulatory regimes. These risks are heightened by our ownership of, and investment in,
portfolio companies operating across numerous jurisdictions and industries. In certain circumstances, we or our personnel
could be subject to investigations, enforcement actions, or liability arising from the conduct of portfolio companies, joint
venture partners, or other third parties, including under theories of control person, successor, aiding-and-abetting, or
facilitation liability. In particular, under U.S. economic sanctions, the FCPA and similar laws and regulations, we may be held
liable for conduct engaged in by portfolio companies or their employees, agents, or intermediaries, including conduct that
occurred prior to our investment or without our knowledge.
Compliance with financial crime laws is required throughout the lifecycle of our investments, including when we acquire
investments, and exit or sell investments. In these contexts, we must assess whether funds paid or received in connection
with an acquisition, financing, or disposition could be transferred, directly or indirectly, to persons or entities subject to
sanctions or other restrictions. Limitations on our ability to obtain complete or reliable information regarding sellers, buyers,
beneficial owners, intermediaries, or payment flows, or changes in applicable laws and regulations or sanctions regimes may
require changes to transaction structures, reduce proceeds, or expose us to enforcement risk.
Compliance with financial crime laws can also have a material impact on our fundraising, capital-raising, and syndication
activities, including limitations on the admission of investors into our funds and the participation of co-investors in our
transactions. In these contexts, we may be required to assess the identity, ownership, source of funds, and jurisdictional
nexus of investors, lenders, and co-investors, and applicable restrictions may limit participation, delay or prevent capital
formation or syndication, require enhanced diligence or contractual protections, or otherwise adversely affect our ability to
raise capital or complete transactions.
Compliance with financial crime laws can be costly and resource-intensive, requiring significant investment in personnel,
systems, controls, training, and third-party advisers, and may limit the jurisdictions, industries, counterparties, or investment
opportunities we are able to pursue. Failure to comply with these laws and regulations, or allegations of non-compliance,
could subject us and our portfolio companies to civil or criminal sanctions, remediation obligations, restrictions on business
activities, enhanced monitoring or oversight, requirements to divest or restructure investments, and significant reputational
harm. See also “—Adverse regulatory actions may result in significant sanctions, liabilities, operational restrictions, litigation,
reputational harm and other material and adverse impacts to our business”.
Our investment vehicles and insurance subsidiaries could become subject to the fiduciary responsibility
and prohibited transaction provisions of ERISA and Section 4975 of the Code, which would adversely
affect our businesses.
Our investment vehicles are structured and operated in a manner intended to avoid being treated as holding plan assets
for purposes of ERISA and Section 4975 of the Code, and we seek to conduct our investment management activities in a
manner consistent with applicable exemptions and exceptions. However, if any of our investment vehicles or insurance
subsidiaries were determined to hold plan assets for purposes of ERISA, or if an applicable exemption or exception were
unavailable, we could become subject to the fiduciary responsibility and prohibited transaction provisions of ERISA and the
Code, which could materially adversely affect our business.
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We or certain of our investment vehicles could potentially be held liable under ERISA for the pension obligations of one or
more of our portfolio companies if we or the investment vehicle were determined to be a “trade or business” under ERISA
and deemed part of the same controlled group as the portfolio company under such rules, or if we were otherwise to become
jointly and severally responsible for any such pension liabilities. In addition, if a similar rationale were expanded to apply also
for U.S. federal income tax purposes, then certain of our investors could be subject to increased U.S. income tax liability or
filing obligations in certain contexts. Similar laws and theories that could be applied with similar results also exist outside of
the United States.
Although we do not currently rely on the qualified professional asset manager (“QPAM”) exemption under ERISA in any
material respect, certain of our affiliates and we, in the future, may rely on the QPAM exemption in connection with
managing plan assets. The availability of the QPAM exemption may be lost or rendered unavailable as a result of criminal
convictions, regulatory actions, or other disqualifying events involving the relevant investment adviser or certain affiliated
entities or individuals, including conduct unrelated to the management of plan assets. Any such loss or unavailability could
expose us or our investment vehicles to prohibited transaction liability, restrict our ability to manage plan assets, require
restructuring of affected arrangements, or otherwise materially adversely affect our business. Moreover, if the general
accounts or separate accounts of one or more of our insurance subsidiaries were to constitute plan assets for purposes of
ERISA, in the absence of an exemption we could incur liability under the prohibited transaction provisions of ERISA and the
Code as a result of any our investment management activities with respect to, or transactions involving our insurance
subsidiaries, and we could become prohibited from being compensated for managing our insurance subsidiaries’ assets.
See also “—Adverse regulatory actions may result in significant sanctions, liabilities, operational restrictions, litigation,
reputational harm and other material and adverse impacts to our business”.
Sustainability-related laws and disclosure requirements may increase compliance costs and subject us
to enforcement risks and reputational risks.
We and certain of our investment vehicles and portfolio companies are or may become subject to sustainability-related
laws, regulations, and disclosure requirements. Our business could be adversely affected if we, our investment vehicles or our
portfolio companies fail to comply with applicable sustainability requirements, including as a result of increased compliance
costs, regulatory enforcement activity, litigation, or reputational harm. New or amended sustainability rules, regulations,
enforcement priorities, or interpretations of existing laws may result in enhanced disclosure or other compliance obligations
and could adversely affect our investment activities and ability to raise capital.
In the European Union, we and certain of our investment vehicles and portfolio companies are or may become subject to
sustainability-related rules and guidance, including the Sustainable Finance Disclosure Regulation, the Corporate Sustainability
Reporting Directive, and the Corporate Sustainability Due Diligence Directive, each of which, if applicable, could impose
significant disclosure, reporting, or due diligence requirements. In addition, we, our investment vehicles and portfolio
companies may also become subject to sustainability-related regulations in the United States, including the California Climate-
Related Financial Risk Act (SB 261) (which is temporarily enjoined) and the California Climate Corporate Data Accountability
Act (SB 253) that is contemplated to require certain disclosures about climate-related financial risks and greenhouse gas
emissions data. On the other hand, several U.S. governmental authorities have enacted or proposed legislation and policies,
or pursued investigations and litigation, to restrict or prohibit government entities from doing business with businesses
identified as boycotting or discriminating against particular industries or from considering environmental and social factors in
their investment processes.
Compliance with sustainability-related requirements often depends on collecting, measuring, and reporting information
from portfolio companies and other third parties, which may be incomplete, inconsistent, or difficult to obtain. Sustainability-
related reporting is subject to evolving standards and methodologies and may require the use of assumptions or estimates
that could later be challenged. Collecting, measuring, and reporting sustainability information can be costly, difficult, and
time-consuming and may present operational, legal, and reputational risks.
We expect evolving sustainability-related regulation and investor expectations to require us to devote additional
resources to sustainability matters in connection with our investment activities and the management of our portfolio
companies, which will increase our expenses. Any failure to effectively manage these requirements, or any material increase
in compliance burdens, regulatory action, litigation, or reputational harm, could materially adversely affect our business,
results of operations, and financial condition. See also “—Adverse regulatory actions may result in significant sanctions,
liabilities, operational restrictions, litigation, reputational harm and other material and adverse impacts to our business”.
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Privacy, data protection, cybersecurity and artificial intelligence laws may increase compliance costs
and subject us to enforcement risks and reputational risks.
Data privacy, data protection and cybersecurity have become priorities for regulators around the world, and rapidly
evolving and changing laws and regulations, including with respect to artificial intelligence, may increase compliance and legal
costs and expose us to enforcement risk, litigation, and reputational harm. We and our portfolio companies are subject to U.S.
federal and state privacy and data protection laws and regulations. For example, the California Consumer Privacy Act provides
enhanced consumer rights, a private right of action for certain data breaches, and statutory fines, damages and penalties for
violations. Other U.S. states have passed their own consumer privacy laws and other states are considering doing so. At the
U.S. federal level, we are subject to the Gramm-Leach-Bliley Act of 1999, and implementing regulations, including Regulation
S-P, which governs privacy notices and the safeguarding and disposal of customer information and establishes certain incident
response and notification obligations.
Our insurance business processes sensitive personal information of policyholders, which exposes it to heightened privacy
and cybersecurity risk, and our insurance subsidiaries are subject to additional cybersecurity requirements, including the New
York State Department of Financial Services (“NYSDFS”) cybersecurity regulation, which requires covered entities to maintain
cybersecurity programs, conduct risk assessments, and satisfy certain incident reporting and governance requirements. In
November 2023, the NYSDFS finalized amendments to its cybersecurity regulations that significantly expanded the NYSDFS’
regulation of data privacy matters.
We are also subject to non-U.S. privacy and data protection laws, including the European General Data Protection
Regulation, the Personal Information Protection Law of the People’s Republic of China, the India Digital Personal Data
Protection Act 2023, the UK Data Protection Act, and similar laws in other jurisdictions. Many of these regimes have
extraterritorial reach, impose differing or conflicting requirements, and may apply to data processing activities conducted by
us, our portfolio companies, or third-party service providers. In addition, we are often subject to privacy and data security
obligations arising from contractual commitments with counterparties.
There is also increased regulatory attention about the use of artificial intelligence. For example, the European Union has
adopted Regulation (EU) 2024/1689, which establishes a comprehensive, risk-based regulatory framework governing the
development, marketing, deployment and use of artificial intelligence systems within the European Union.
Failure to comply with applicable data privacy, data protection, cybersecurity, or artificial intelligence laws or related
contractual obligations could result in regulatory investigations or enforcement actions, private litigation, fines, penalties,
claims for damages, or adverse publicity. Even where we are not found liable, responding to investigations or claims may be
costly and time-consuming and could result in reputational harm. Regulatory enforcement activity and private litigation
relating to data privacy and cybersecurity matters have increased in recent years, and any significant enforcement action,
litigation, or reputational harm could materially adversely affect our business, results of operations and financial condition.
See also “—Adverse regulatory actions may result in significant sanctions, liabilities, operational restrictions, litigation,
reputational harm and other material and adverse impacts to our business”.
Risks Related to Our Investment Activities
In our asset management business, we sponsor and manage funds and other investment vehicles that make investments
worldwide on behalf of third-party investors and, in connection with those activities, typically deploy our own capital for a
portion of those investments. These investments are subject to many material risks and uncertainties as discussed below. In
addition, we manage the investments of our insurance subsidiaries and other investments on our balance sheet, including
through our Strategic Holdings business. Because we directly bear the full risk of the investments of our insurance
subsidiaries and those on our balance sheet, including those reported in our Strategic Holdings segment, the risks and
uncertainties discussed below may have a greater impact on our results of operations and financial condition.
Future results of our investments may be different than, and may not achieve the levels of, any of our
historical returns.
We have presented in this report certain information relating to our investment returns, such as net and gross internal
rates of return (“IRR”), multiples of invested capital (“MOIC”) and realized and unrealized investment values for investment
vehicles that we have sponsored, managed or operated. Historical returns of our investment vehicles should not be relied
upon as indicative of the future results that you should expect from our investment vehicles and are not indicative of the
future results of our insurance subsidiaries or our balance sheet assets. The future results may differ significantly from their
historical results for a multitude of reasons, including for timing differences between the reporting of unrealized gains and
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realization events, changes in the asset classes in which our current funds invest in compared to historical asset classes,
market and economic conditions, differences in the duration of holding periods of investments and deployment periods for
investment vehicles, differences in asset mixes, industry exposures, and geographies, and the economic terms and costs
associated with our newer investment vehicles.
Various conditions and events outside of our control that are difficult to quantify or predict may have a
significant impact on the valuation of our investments.
Global equity markets, which have been and are expected to continue to be volatile, significantly impact the valuation of
our equity investments in portfolio companies. For our equity investments that are publicly listed and thus have readily
observable market prices, equity markets around the world have a direct impact on valuation, because their values are
determined by their listed prices in the public markets. For our equity investments that are not publicly listed, equity markets
have an indirect impact on valuation as we often consider market multiples in our valuation of illiquid assets. In our private
equity business, a substantial amount of investments are in equities, so a change in equity prices or equity market volatility
could significantly impact the value of our private equity investments. In our insurance business, a change in equity prices
also impacts our equity-linked annuity and life insurance products, including with respect to hedging costs related to those
products.
The credit markets can also impact the valuations of our equity investments in portfolio companies. For example, we
typically use a discounted cash flow analysis as one of the methodologies in our valuation of illiquid assets process. If interest
rates rise, then the assumed cost of capital for the equity investments in our portfolio companies would be expected to
increase under the discounted cash flow analysis, and this effect would negatively impact their valuations if not offset by
other factors. In our infrastructure business, a substantial amount of investments are valued using the discounted cash flow
analysis, so a change in interest rates could significantly impact the value of our infrastructure investments.
The credit markets directly impact the valuations of the credit investments that we (especially our insurance subsidiaries)
and our investment vehicles own. Interest income earned from debt investments with floating interest rates should increase
if the applicable benchmark interest rate were to rise, and the reverse is true if the applicable benchmark interest rate were
to decline. However, during periods of rising interest rates, the obligor of such floating rate debt may become less able to pay
its debt obligations, which could have the effect of impairing the value of its debt obligations. For debt investments with fixed
interest rates, changes in interest rates generally will also cause the value of the fixed rate debt to vary inversely to such
changes, although any losses or gains would in most cases not be realized if the fixed rate debt is held to maturity. Increased
or unexpected payment delinquencies, foreclosures or losses could adversely affect our or our investment vehicles’ ability to
invest in, sell and securitize loans, which would materially and adversely affect our or our investment vehicles’ results of
operations, financial condition, liquidity and business.
Foreign exchange rates can materially impact the valuations of our investments that are denominated in currencies other
than the U.S. dollar. We make investments and receive capital commitments and have liabilities that are denominated in
currencies other than the U.S. dollar. The appreciation or depreciation of the U.S. dollar is expected to contribute to a
decrease or increase, respectively, in the U.S. dollar value of our non-U.S. investments to the extent unhedged. For our
investments denominated in currencies other than the U.S. dollar, the depreciation in such currencies will generally
contribute to the decrease in the valuation of such investments, to the extent unhedged, and adversely affect the U.S. dollar
equivalent revenues of portfolio companies with substantial revenues denominated in such currencies, while the appreciation
in such currencies would be expected to have the opposite effect.
Conditions in commodity markets can also impact the valuations of our investments in a variety of ways, including
through the direct or indirect impact on the cost of the inputs used in their operations, as well as the pricing and profitability
of the products or services that they sell. The price of commodities has historically been subject to substantial volatility,
which among other things, could be driven by economic, monetary, geopolitical or other factors. Further, if the operating
partners for certain of our investments are unable to raise prices to offset increases in the cost of raw materials or other
inputs, including the cost of energy and transportation, or if customers defer purchases of or seek substitutes for these
products, these investments could experience lower operating income which may in turn reduce their valuation. With respect
to our investments in energy-related companies, when commodity prices decline or if a decline is not offset by other factors,
the revenues, operating results, profitability and liquidity of the businesses related to such energy-related companies may be
adversely affected.
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The market values of real estate assets may be adversely affected by a number of factors, including national, regional and
local economic conditions; construction quality, age and design; demographic factors; tenant demand, market occupancy and
rental rate trends; and capitalization rates. Declining real estate values significantly increase the likelihood that we or our
investment vehicles will incur losses on loans in the event of default because the value of our collateral may be insufficient to
cover the costs on the loan.
Financial markets and economic conditions are outside our control and may affect the level and volatility of securities
prices and liquidity and as a result, the value of our investments and our financial results. In addition, if we are unable to or
choose not to manage our exposure to these conditions and/or events and such impact is not otherwise offset, then declines
in the equity, commodity and debt in the markets would likely cause us to write down our investments and the investments
of our funds. For example, during the global financial crisis in 2008 and 2009, valuations of our private equity funds declined
across all geographies, with investments in private equity funds marked down to as low as 67% of original cost and multiples
of invested capital reaching as low as 0.5x, 0.6x, 0.7x and 0.8x for the European Fund II, European Fund III, 2006 Fund and
Asian Fund, respectively, as of March 31, 2009.
The valuations of our investments can be impacted by many other factors unrelated to market or economic conditions,
including:
•global, regional and local events outside of our control, including geopolitical events, natural disasters, and
catastrophes;
•climate-related risks, including the impacts of changes in the physical climate, such as extreme weather or
temperature changes, which may damage physical assets as well as disrupt connectivity and supply chains, in
addition to climate-related transition risks that may arise from exposure to the transition to a low-carbon economy
through policy, regulatory, technology, market changes, differing perspectives of stakeholders regarding climate
impacts, business trends, and changes in consumer behavior related to climate change and technology; and
•developments in and adoption of artificial intelligence technologies, which may render existing products, services, or
business models of the companies in which we invest to become obsolete, less competitive, or require significant
and unanticipated additional investment to remain viable.
For a discussion of certain recent market or economic conditions, see also “Management's Discussion and Analysis of
Financial Condition and Results of Operations—Critical Accounting Policies and Estimates”.
Many of our investments are illiquid, and it may not be possible to realize any profits from them for a
considerable period of time or at all.
We and our investment vehicles hold investments in securities that are not publicly traded. In many cases, we may be
prohibited by contract or by applicable securities laws from selling such securities at many points in time. Our ability to
dispose of investments also is heavily dependent on the capital markets and, in particular, the public equity markets. For
example, the ability to realize any value from an investment may depend upon the ability to complete an initial public offering
of the portfolio company in which such investment is made. Even if the securities are publicly traded, large holdings of
securities can often be disposed of only over a substantial length of time, exposing our investment returns to risks of
downward movement in market prices during the intended disposition period. In addition, market conditions and the
regulatory environment can also delay and, in certain cases, materially impair, our ability to exit and realize value from these
investments. Although the equity markets are not the only means by which we exit investments from our funds, the strength
and liquidity of the relevant equity for the portfolio company, and the initial public offering market specifically, affect the
valuation of, and our ability to successfully exit, our equity positions in the portfolio companies in a timely manner. Difficult
market and economic conditions could increase the cost of credit or cause a degradation in debt financing terms for potential
buyers, either of which may adversely impact our ability to identify, execute and exit investments on attractive terms.
Government policies regarding certain regulations, such as antitrust law, national security or restrictions on foreign direct
investment in certain of our portfolio companies or assets can also limit our and our investment vehicles’ exit opportunities.
In addition, many of our investment vehicles have a finite term, and we may also be forced to dispose of investments sooner
than otherwise desirable. Accordingly, under certain conditions, our investment vehicles may be forced to either sell their
investments at lower prices than they had expected to realize or defer sales that they had planned to make, potentially for a
considerable period of time.
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The valuations of illiquid investments are subjective and uncertain, and any realizations of our illiquid
investments may occur at prices which differ from their carrying values.
There are no readily ascertainable market prices for a substantial majority of illiquid investments held by us and our
investment vehicles. We generally determine the fair value of the investments of our funds in accordance with accounting
principles generally accepted in the United States of America (“U.S. GAAP”). U.S. GAAP requires the application of accounting
guidance and policies that often involve a significant degree of judgment. These accounting estimates require the use of
assumptions, some of which are highly uncertain at the time of estimation and can be incomplete or inaccurate despite our
engagement of third parties to assist with certain aspects of our valuations.
The amount of judgment and discretion inherent in valuing assets renders valuations uncertain and susceptible to
material fluctuations over possibly short periods of time. Our determination of an investment’s fair value may differ
materially from the value that would have been determined if a ready market for the securities had existed and the valuations
the general partners of other funds or other third parties ascribe to the same investment. In addition, the range of potential
valuation methodologies and the potential exercise of our subjective judgment in determining valuation might cause some of
our investors or regulators to question our valuations or methodologies. There can be no assurance that our policies will
address all necessary valuation factors or completely eliminate potential conflicts of interest in such determinations or that
we will be able to achieve some valuations.
The valuations of and realization opportunities for investments made by us and our investment vehicles could also be
subject to high volatility as a result of uncertainty regarding various risks described in these risk factors. Due to the lapse of
time between valuations, subsequent events that may have a significant impact on valuations will not be reflected until the
next valuation date. Changes in values attributed to investments may result in volatility in our AUM and could materially
affect the results of operations that we report from period to period. In addition, estimates, inputs, assumptions, and other
determinations made in connection with how various valuation methodologies are employed may also change from time to
time. Our valuation of an investment at a measurement date may also differ materially from the value that is obtained upon
the investment’s exit. If the investment values that we record from time to time are not ultimately realized, it could have a
material adverse effect on our results of operations, financial condition and cash flow.
Further, certain of our investment vehicles offered to individual investors calculate net asset value (“NAV”) on a daily or
monthly basis for purposes of establishing the price at which those investment vehicles sell and repurchase their shares. The
methods used to calculate NAV are not prescribed by the rules of the SEC or any other regulatory agency. There are no
accounting rules or standards that prescribe which components should be used in calculating NAV, and the NAV of such
vehicles are not audited by our independent registered public accounting firm. Errors may occur in calculating such NAV,
which could impact the price at which the shares of our investment vehicles offered to individual investors are sold and
repurchased.
Also, if realizations of our investments produce values materially different than the carrying values reflected in an
investment vehicle’s previous valuation, investors in such vehicles may lose confidence in us, which could in turn result in
difficulty in raising capital for future funds or other investment vehicles. Some of our investors and regulators may question
our valuations or methodologies. The SEC has focused on issues related to valuation of private investment vehicles, including
frequency, consistent application of the methodology, disclosure, and conflicts of interest, in its enforcement, examination,
and rulemaking activities. For information about our valuation methodologies and processes, please see Note 2 “Summary of
Significant Accounting Policies—Fair Value Measurements” in our financial statements.
We often pursue investment opportunities that involve unique business, regulatory, legal, tax or other
complexities that entail significant risks.
We often pursue complex investment opportunities, which may often involve substantial business, regulatory or legal
complexities. Our tolerance for complexity presents significant risks, as such transactions can be more difficult, expensive and
time consuming to finance and execute, and it can be more difficult to manage or realize value from these types of
investments. Other risks that are often inherent in these kinds of transactions include:
Our transactions may entail a high level of regulatory scrutiny, and our investment may be subject to complex regulatory
requirements and instances of non-compliance at the investment level may subject us to reputational harm or, in certain
cases, liability;
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•Our transactions may involve complex tax structuring that could be challenged or disregarded, which may result in
losing treaty benefits or otherwise adversely impact our investments; complex tax structures are costly to establish,
monitor and maintain, and as we pursue a larger number of transactions across multiple assets classes and in
multiple jurisdictions, such costs will increase and the risk that a tax matter is overlooked or inadequately or
inconsistently addressed may increase;
•Our transactions may involve an investment that is subject to significant liabilities, including contingent liabilities,
which could be unknown to us at the time of acquisition or, if they are known to us, we may not accurately assess or
protect against the risks that they present, which could result in material unforeseen losses;
•We rely on the management of our portfolio companies or other third-party operators to provide for financial
projections and other information about their companies, businesses or assets, which may not be accurate or
realistic and thus could result in performance that falls short of our expectations or even result in such company’s
bankruptcy; we also rely on the management of our portfolio companies or other third-party operators, and their
systems and processes, for ongoing financial and other information in support of the valuations of our investments in
or with them; and
•Our dispositions of investments may result in the incurrence of contingent liabilities by us or an investment vehicle;
for example, if we or an investment vehicle required to make representations about the investment and are required
to indemnify the purchasers of such investment for misrepresentations.
We also make large private equity and real assets investments, which involve certain complexities and risks that are not
encountered in small- and medium-sized investments. For example, when we enter into large transactions we often seek to
syndicate a portion of our capital commitment to third parties. However, if we are unable to syndicate all or part of such
commitment, or if such co-investors fail to fund their commitments, we may be required to fund the remaining commitment
amount from our balance sheet, and poor performance of such large investment may have a material adverse impact on our
financial results. Furthermore, investments by many of our investment funds will include debt instruments and equity
securities of companies that we do not control. Consortium transactions generally entail a reduced level of control by our
firm over the investment because governance rights must be shared with the other consortium investors. Accordingly, we
may not be able to control decisions, including decisions relating to the management and operation of the company and the
timing and nature of any exit, which could result in the risks described herein.
In addition, our growth equity investment vehicles may make investments in companies which are in a conceptual or
early stage of development. These companies are often characterized by new technologies and products, quickly evolving
markets, management teams that are materially dependent on a founder or key executives or may have limited experience
working together, in many cases, negative cash flow, and dependence on intellectual property rights, as well as other
substantial business and operational risks, all of which pose obstacles to the ultimate success of such investments. In
addition, growth equity companies may be more susceptible to macroeconomic effects and industry downturns, and their
valuations may be more volatile depending on the achievement of milestones, such as receiving a governmental license or
approval.
We use a significant amount of leverage in our investment activities, and our portfolio companies and
investments may have significant credit and liquidity requirements, which may be materially and
adversely affected by changes in financial markets.
We and our investment vehicles typically use a significant amount of leverage as part of our investment strategy and
regularly borrow a substantial amount of capital for operations and investments. With respect to our private equity and real
assets businesses, if we are unable to obtain committed debt financing for potential acquisitions or can only obtain debt at an
increased interest rate or on unfavorable terms, we may have difficulty completing otherwise profitable acquisitions or may
generate lower profits, either of which could lead to a decrease in the investment income earned by us. Any failure by
lenders to provide previously committed financing can also expose us to potential claims by sellers of businesses that we may
have contracted to purchase. Our ability to generate returns on these assets would be reduced to the extent that changes in
market conditions, including changes to interest rates, cause the cost of our financing to increase relative to the income that
can be derived from the assets acquired or financed. Significant stress in the credit markets is likely to materially affect our
business. For example, the turmoil in the global financial markets during 2008 and 2009 provoked significant contraction in
the availability of credit and the failure of a number of companies, including leading financial institutions. Our business was
materially and adversely affected by the global financial crisis due to a significant reduction in the availability of credit, less
favorable terms for available credit, and a material reduction in deal activity, which limited our exit and new investment
opportunities.
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We have equity and debt investments in companies that have a significant amount of leverage as well as companies that
are currently experiencing, or in the future may experience, significant financial or business difficulties. Our portfolio
companies often incur debt in connection with our acquisition of it, and our portfolio companies regularly utilize the
corporate debt markets to obtain financing for operations. To the extent that credit markets render such financing difficult to
obtain or more expensive, this may negatively impact our performance (and in particular our insurance business) and the
performance of such portfolio companies. In addition, to the extent that conditions in the credit markets impair the ability of
our portfolio companies to refinance or extend maturities on their outstanding debt, either on favorable terms or at all, the
performance of those portfolio companies may be negatively impacted, which could impair the value of our investment in
those portfolio companies and lead to a decrease in the investment income earned by us. In some cases, the inability of our
portfolio companies to refinance or extend maturities may result in the inability of those companies to repay debt at maturity
or pay interests when due, and may cause the companies to sell assets, undergo a recapitalization or seek bankruptcy
protection, any of which would likely materially impair the value of our investment and lead to a decrease in the investment
income earned by us. Investments in leveraged companies or companies experiencing financial or business difficulties
generally entail greater risk, including relating to contractual restrictions on the operations of its businesses and significantly
higher debt service costs, and such investments are also inherently more sensitive to declines in their company’s revenues,
increases in their company’s expenses, interest rate changes, and other adverse economic, market and industry
developments. As a result, the risk of loss associated with a leveraged company is generally greater than for comparable
companies with comparatively less debt.
In addition, our and our investment vehicles’ exposure to CLO markets may exacerbate risks associated with leverage and
borrowing, as these CLOs generally involve a higher degree of risk than investment grade-rated debt. We have significant
exposure to these markets through our CLO vehicles. In most cases, our CLO holdings are deeply subordinated, representing
the CLO vehicle’s substantial leverage, which increases both the opportunity for higher returns as well as the magnitude of
losses when compared to holders or investors that rank more senior to us in right of payment. During any time that a CLO
issuer exceeds applicable contractual limits on certain obligations it can hold, the ability of the CLO’s manager to sell assets
and reinvest available principal proceeds into substitute assets is restricted. In such circumstances, CLOs may fail certain
over-collateralization tests, which would cause diversions of cash flows away from us as holders of the more junior notes of
our CLOs, which may impact our cash flows. The ability of the CLOs to make interest payments to the holders of the senior
notes of those structures is highly dependent upon the performance of the CLO collateral. If the collateral in those structures
were to experience a significant decrease in cash flow due to an increased default level, payment of all principal and interest
outstanding may be accelerated. If these vehicles are unable to maintain their operating results and access to capital
resources, they could face substantial liquidity problems. These CLO strategies and the value of the assets of such CLO
vehicles are also sensitive to changes in interest rates because these strategies rely on borrowed money and because the
value of the underlying portfolio loans can fall when interest rates rise. As a result of their use of large amounts of leverage,
CLOs are at greater risk of suffering material losses.
The due diligence process that we undertake in connection with our investments may not reveal all
facts that may be relevant in connection with an investment.
Before making our investments, we seek to conduct due diligence that we believe to be reasonable and appropriate
based on the facts and circumstances applicable to each investment. When conducting due diligence, we typically evaluate a
number of important business, financial, accounting, sustainability, technological, tax, regulatory and legal issues and
macroeconomic trends in determining whether or not to proceed with an investment. When conducting due diligence and
making an assessment regarding an investment, we rely on resources available to us, including information provided by the
target of the investment and, in some circumstances, third-party investigations. The due diligence process is often subjective,
and only limited information may be available. For some strategies or investment opportunities, our due diligence may be
limited to only publicly available information. Accordingly, we cannot be certain that the due diligence investigation that we
will carry out with respect to any investment opportunity will reveal or highlight all relevant considerations that may be
necessary or helpful in evaluating such investment opportunity, including the existence of contingent liabilities.
In addition, instances of bribery, fraud, accounting irregularities and other improper, illegal or corrupt practices can be
difficult to detect, and fraud and other deceptive practices can be widespread in certain jurisdictions. Several of our
investment vehicles invest in emerging market countries that may not have established laws and regulations that are as
stringent as those in more developed nations, or where existing laws and regulations may not be consistently enforced. Due
diligence on investment opportunities in these jurisdictions is frequently more complicated because consistent and uniform
commercial practices in such locations may not have developed. Bribery, fraud, accounting irregularities and corrupt
practices can be especially difficult to detect in such locations.
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Investments in real assets may expose us and our investment vehicles to greater risks, liabilities and
operational complexities than investments in operating companies.
Our investments in real assets, such as real estate, infrastructure and energy, may subject us and our investment vehicles
to risks that are unique to the ownership, development and operation of physical assets. These risks include, among others:
•exposure to environmental laws and regulations that may impose strict or joint and several liability without regard to
fault, including liabilities arising from conditions existing prior to acquisition or arising after disposition, and liabilities
resulting from changes in applicable laws or standards;
•risks of personal injury, property damage, business interruption or catastrophic loss arising from natural disasters,
severe weather events, climate change (including both physical and transition risks), equipment failure, construction
defects, or other force majeure events, which may result in uninsured or underinsured losses, contractual claims,
reputational harm or other material liabilities;
•reliance on third-party operators, property managers, developers, contractors, sub-contractors, and other service
providers, whose failure to perform, misconduct (including fraud, bribery or other violations of law), or non-
compliance with applicable agreements or laws may materially adversely affect the value or operation of an asset
and expose us to liability or reputational damage;
•extensive and evolving federal, state, local and foreign laws and regulations governing land use, zoning, permitting,
labor, health and safety, rate setting, licensing, concessions, public procurement and other matters, including the risk
of delays, cost overruns, loss of permits or licenses, limitations on pricing, fines, sanctions, injunctions or criminal
penalties;
•ongoing arrangements with federal, state, local or foreign governments or regulatory authorities, including
partnerships and joint ventures, which may subject us to additional contractual, regulatory, political or performance-
related obligations and expose us to risks arising from changes in government priorities, financial condition or force
majeure;
•development, construction and redevelopment risks, including entitlement and permitting uncertainties, cost
inflation, supply chain disruptions, labor shortages, delays in completion, defects, the inability to obtain or maintain
financing on acceptable terms (including exposure under “bad boy” guarantees or similar arrangements); and
•asset-specific risks, including heightened political and public scrutiny of institutional ownership of certain asset
classes (such as single family homes or residential housing), exposure to reimbursement regimes and care-related
liabilities in healthcare facilities, and the dependence of infrastructure assets on long-term governmental licenses,
concessions, contracts or rate regulation, which may be modified, terminated, not renewed or subject to increased
regulatory oversight.
We make investments outside of the United States, which may expose us to additional risks, or
materially exacerbate risks, that are not typically associated with investing in the United States.
We invest a significant portion of our AUM in the equity, debt, loans or other securities of issuers and in other assets that
are based outside of the United States. Investing in companies or assets that are based or have significant operations in
countries outside of the United States and, in particular, in emerging markets such as China and India, Eastern Europe, South
and Southeast Asia, Latin America and Africa, involves risks and considerations that are not typically associated with
investments in companies or assets established in the United States. These risks may include, in addition to more volatile or
adverse market and economic conditions than the U.S., the following:
•the imposition of non-U.S. taxes with respect to certain assets and/or changes in tax law;
•limitations on borrowings to be used to fund acquisitions or dividends;
•limitations on the deductibility of interest and other financing costs and expense for income tax purposes in certain
jurisdictions;
•limitations on permissible counterparties in our transactions or consolidation rules that effectively restrict the types
of businesses in which we may invest;
•political risks generally, including political and social instability, nationalization, expropriation of assets or political
hostility to investments by foreign or private equity investors;
•reliance on a more limited number of commodity inputs, service providers or distribution mechanisms;
•fluctuations in foreign exchange rates;
•less government supervision of exchanges, brokers and issuers;
•less developed bankruptcy and other laws;
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•difficulty in enforcing contractual obligations;
•lack of uniform or robust accounting, auditing, financial reporting standards, practices and disclosure requirements,
and less government supervision and regulation;
•less stringent requirements relating to fiduciary duties; and
•risks described under “Risks Related to Regulatory Matters—Financial crime laws may limit our investment and
capital raising activities and subject us to adverse regulatory consequences.”
If we fail to effectively manage conflicts of interest that arise from our investment activities, our
reputation, business or financial results could be materially and adversely impacted or we may become
subject to regulatory scrutiny or litigation.
As we have expanded and as we continue to grow and expand our businesses, we often confront potential conflicts of
interest relating to our investment activities. For example:
•Potential conflicts may arise with respect to allocation of investment opportunities among us, our investment
vehicles and our affiliates, including to the extent that the applicable fund documents do not mandate a specific
investment allocation. For example, we may allocate an investment opportunity that is appropriate for two or more
investment vehicles in a manner that excludes one or more vehicles or results in a disproportionate allocation based
on factors or criteria that we determine. Moreover, the challenge of allocating investment opportunities to certain
vehicles and managing any conflicts of interest may be exacerbated as we expand our business to include more lines
of business, including as we increasingly undertake business initiatives to increase the number and types of
investment products and vehicles we offer to individual investors;
•Conflicts of interest may arise between one or more investment vehicles, on one hand, and our firm or our balance
sheet assets (including through our Strategic Holdings business), on the other, with respect to the purchase or sale of
investments or the allocation of such opportunities, the structuring or exercise of rights with respect to investments,
and the advice we provide to our investment vehicles (including our insurance subsidiaries);
•We or our investment vehicles may invest in a portfolio company that is a competitor, service provider, supplier,
customer, or other kind of counterparty with respect to a portfolio company in which we or another investment
vehicle hold an investment;
•We are required to act in the best interests of our funds, and so we may take actions that favor the interests of our
funds over our own, which could result in less investment or other income for us; e.g., we may structure an
investment in a manner that may be attractive to investment vehicle investors from a tax perspective even though
we would be required to pay corporate taxes;
•We are required to allocate investment opportunities among investment vehicles that may have overlapping
investment objectives, which may result in investments being allocated to investment vehicles that are less
profitable for us;
•A dispute may arise between us and the portfolio companies of the funds we manage, and the investors in the funds
we manage may be dissatisfied with our handling of such dispute;
•A decision to pursue an investment opportunity for a particular investment vehicle (or our own account) may result
in our having to restrict the ability of other investment vehicles (or our own account), e.g., the acquisition of
maternal non-public information about a company may preclude other investment opportunities that could be
available with respect to the securities of such company, or the acquisition of a company could give rise to antitrust
or other regulatory restrictions that prevent, prohibit or restrict similar investment opportunities for other
investment vehicles or portfolio companies;
•Our employees have made personal investments in a variety of our investment vehicles typically on a no-fee, no-
carry basis, which may result in conflicts of interest with the investors of our investment vehicles with respect
investment decisions for these investment vehicles;
•Our entitlement to receive carried interest from many of our investment vehicles may create an incentive for us to
make riskier and more speculative investments on behalf of an investment vehicle than would be the case in the
absence of such an arrangement; in addition, investments must be held for more than three years under U.S. tax
laws for carried interest to be treated for U.S. federal income tax purposes as long-term capital gain, which may
create a conflict of interest between the limited partner investors (whose investments would receive such long-term
capital gain treatment after a holding period of only one year) and us as the general partner on the execution, closing
or timing of sales of investments;
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•From time to time, one of our funds or other investment vehicles (including CLOs) may seek to effect a purchase or
sale of an investment with one or more of our other funds or other investment vehicles in a so-called cross
transaction under U.S. securities laws, or we as a principal may seek to effect a purchase or sale of our investment
with one or more of our funds or other investment vehicles in a so-called principal transaction under U.S. securities
laws;
•We own or control service providers that provide services to our investment vehicles or their investments, which
could give rise to a number of claims of conflicts of interest, including that such service provider is being
unnecessarily engaged or is being engaged at rates or terms that are no on an arms-length arrangement or that
payments by such investment vehicles or investment unfairly benefit us;
•Our investment vehicles invest in a broad range of asset classes throughout the corporate capital structure. In certain
cases, we or our investment vehicles may invest in different parts of the same company’s capital structure, and the
interests of KKR and our investment vehicles may not always be aligned, which could create actual or potential
conflicts of interest or the appearance of such conflicts. We may also cause different funds that we manage to
purchase different classes of securities in the same portfolio company. For example, one of our CLO funds could
acquire a debt security issued by the same company in which one of our private equity funds owns common equity
securities. A direct conflict of interest could arise between the debt holders and the equity holders if such a company
were to become financially distressed; and
•We may also invest, or cause different investment vehicles to invest, in a single portfolio company, for example,
where the investment vehicle that made an initial investment no longer has capital available to invest. We may also
establish other investment vehicles, which we refer to as “continuation vehicles”, for the purpose of purchasing one
or more investments from us or one or more of our other investment vehicles. In such circumstances, we are acting
on behalf of, and making the investment decision for each of the entities involved in the relevant transaction.
Allocating investment opportunities frequently involves significant and subjective judgments. The risk that investors in
our investment vehicles or regulators could challenge allocation decisions as inconsistent with our obligations under
applicable law, governing fund agreements, or our own policies cannot be eliminated. Moreover, the perception of
noncompliance with such requirements or policies could harm our reputation with investors in our investment vehicles. An
investment adviser’s conflicts of interest continue to be a significant area of focus for investors, regulators, and the media.
Because of our size and the variety of businesses and investment strategies that we pursue, we may face a higher degree of
scrutiny compared with investment advisers that are smaller or focus on fewer asset classes. Investors and potential investors
in our different types of investment vehicles, including those designed either primarily for institutional investors or individual
investors, may scrutinize any perceived conflict of interest between allocation decisions for institutional investment vehicles
on the one hand and individual investment vehicles on the other hand and may decide not to invest with us if they do not
agree with how we address potential conflicts of interest and allocation decisions. Any steps taken by a regulator to preclude
or limit certain conflicts of interest could make it more difficult for our investment vehicles to pursue transactions that may
otherwise be attractive to their investors.
While we will try to mitigate these conflicts of interests, we may be unsuccessful in such mitigation efforts, or we may be
obliged to take an action or refrain from taking an action that would be disadvantageous to us as a firm. Certain policies and
procedures implemented to mitigate potential conflicts of interest and address certain regulatory requirements may reduce
the synergies across our various businesses as we have multiple business lines and regulated affiliates subject to different
regulations pertaining to conflicts of interest. As a consequence of such policies and procedures, we may be precluded from
providing such information or other ideas to our other businesses even where it might be of benefit to them. Our failure to
mitigate successfully a conflict of interest could result in a violation of our obligations under applicable governing documents
or applicable law, giving raise to potential challenges or litigation by our fund investors or regulators. In addition, our
regulators may decide to preclude or limit certain conflicts of interest could make it more difficult for our investment vehicles
to pursue transactions that may otherwise be attractive to their investors. To the extent we are unable to effectively manage
these conflicts of interest, our reputation, business and financial results may be adversely affected, including as a result of any
regulatory scrutiny or litigation in connection with any conflicts of interest. For more information about these regulatory risks
and litigation risks, please see “—Risks Related to Regulatory Matters” and “—Risks Related to Our Business—We may suffer
material harm as a result of legal claims, litigations, investigations, and negative publicity”.
If our third-party investors fail to fund their capital calls when requested by us, it may materially and
adversely affect us.
Investors in our funds and certain other investment vehicles make capital commitments that our funds and other
investment vehicles are entitled to call from those investors at any time during prescribed periods. These investors fulfilling
their commitments is necessary in order for such investment vehicles to consummate investments and otherwise pay their
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obligations when due. Although investors that do not fund a capital call would generally be subject to several possible
penalties, the impact of the penalty may not be sufficient to deter investors from defaulting on their commitments, and
investors may in the future negotiate for lesser or reduced penalties at the outset of the investment vehicle, thereby
inhibiting our ability to enforce the funding of a capital call. In addition, an investor may be prohibited from funding capital
commitments for any number of regulatory reasons, including for example, those described in “—Risks Related to Regulatory
Matters—Financial crime laws may limit our investment and capital raising activities and subject us to adverse regulatory
consequences”. The failure to fund capital commitments may have a material adverse effect on our funds or other
investment vehicles’ ability to complete an investment, which in turn could have a material adverse effect on the funds or
other investment vehicles, including becoming potentially subject to contractual or other liabilities for the failure to fund or
lose the investment. In addition, we may choose to, or become obligated to pay, such shortfalls in the capital needed to fund
an investment, which could materially adversely affect our liquidity, or we may sustain reputational harm, which could
negatively impact ability to compete for investment opportunities. In addition, negative impacts to our reputation could
impact our ability to raise successor or other investment funds, which could negatively impact our AUM and ability to grow
our business.
Risks Related to our Insurance Activities
Through Global Atlantic, we operate an insurance business, which is subject to material risks and uncertainties that are
different from, and incremental to, the risks relating to our asset management business or our management of our insurance
subsidiaries’ investments. All the risks discussed below relating to Global Atlantic could materially and adversely impact KKR.
We operate in a highly competitive industry.
Our insurance business operates in highly competitive markets, and in recent years there has been a substantial increase
in competition in the life and annuities business as non-traditional firms, including those owned by or with strategic
partnerships with alternative asset managers, have entered the insurance sector. Traditional insurers and reinsurers have also
been significantly expanding their areas of expertise and product lines, which could have a significant effect on competition in
the insurance industry. These new and traditional competitors may be able to price new business aggressively, with a higher
investment risk tolerance, as part of a strategy to gain market share, or increase assets under management.
Within individual markets, our insurance business faces a variety of large and small industry participants. Large,
established insurers often operate with the benefit of well-known brands, entrenched distribution relationships, or
proprietary distribution. All of these companies compete for individual markets sales. Our flow reinsurance business may also
be impacted by competition among insurers in individual markets. The competitiveness of our insurance product offerings will
depend on the actions of its competitors and our ability to actively manage our insurance product offerings. In institutional
markets, there have been many block reinsurance transactions as many insurers continue to reevaluate their commitment to
business lines and seek reinsurance solutions as a way to de-emphasize or divest non-core businesses, reduce risk, seek
capital relief, or improve profitability. The block reinsurance and pension risk transfer markets are also experiencing
competition due to new entrants, including entrants which have strategic partnerships with alternative asset managers and
entrants based outside of the United States. Increased competition across all of our product offerings may make it more
difficult for us to identify and execute transactions with terms that are commercially acceptable based on our risk tolerance
and target return objectives. Increased competition may also increase regulatory scrutiny of individual or institutional
insurance markets activity.
Additionally, some of our competitors may be subject to less regulation or less regulatory scrutiny and accordingly may
have more flexibility to undertake and execute certain businesses or investments than we do or bear less expense to comply
with such regulations than we do.
We may not be able to identify or manage significant growth opportunities for our insurance business.
While we continue to seek to grow Global Atlantic’s business, particularly overseas, we may not be able to identify
attractive insurance markets, reinsurance opportunities or investments with returns that are as favorable as Global Atlantic’s
historical returns or grow new business volumes at historical levels, or we may face challenges in effectively managing this
growth. To maintain or increase Global Atlantic’s investment returns, it may be necessary to expand the scope of Global
Atlantic’s investing activities to asset classes in which Global Atlantic historically has not invested, which may increase the risk
of Global Atlantic’s investment portfolio. Growth opportunities may also be in new or adjacent product offerings and in new
jurisdictions where Global Atlantic historically has had less or no experience. Pursuing opportunities in these new areas may
subject Global Atlantic to new and complex insurance regulations and business considerations. If Global Atlantic is unable, or
fails, to find or manage profitable growth opportunities, it will be more difficult for it to continue to grow and could materially
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affect us. In addition, if preferences for Global Atlantic’s individual or institutional products change or Global Atlantic is
unable to offer competitive pricing and attractive terms, our revenues and results of operations may be materially and
adversely impacted. Moreover, as an insurance company, Global Atlantic’s ability to grow is dependent on the sufficiency of
its capital base to support that growth. Global Atlantic may need to seek additional capital to manage its growth, and it may
not be able to maintain its current strong capital position as it grows. As Global Atlantic grows, it must invest additional
assets, which poses increased investment risk. Growth may also increase the risk of service problems, and Global Atlantic
may need to expend additional resources to provide consistent service. Any service problems may create potential liability,
including reputational harm or increased scrutiny by regulators.
For more information about management of KKR’s balance sheet and access to sources of liquidity, please see “Risks
Related to Our Business—The failure to effectively manage our balance sheet could materially and adversely affect our
financial condition and results of operations” and “Risks Related to Our Business—The failure to manage, or the inability to
access, adequate sources of liquidity could materially and adversely affect KKR”.
The ability to source successful reinsurance opportunities is not guaranteed.
Global Atlantic’s institutional client business includes block reinsurance transactions, flow reinsurance, pension risk
transfer reinsurance and the issuance of funding agreements. There can be no assurance that these transactions will achieve
the results expected at the time the transactions are executed.
The size and volume of block reinsurance transactions often have and may vary widely quarter-to-quarter and annually.
Similarly, while our insurance business’s flow and PRT transactions, as well as new business volumes relating to these
products, have historically fluctuated less than block transactions, the size and volume of such transactions may also vary
widely period-to-period. Other factors that can cause Global Atlantic’s actual experience to vary from our estimates include
macroeconomic, asset performance, business growth, demographic, policyholder behavior, regulatory and political
conditions. Additionally, to the extent Global Atlantic is unable to consummate suitable reinsurance transaction opportunities
on acceptable terms, its future growth may be negatively impacted. Competition, in particular with respect to transaction
pricing, makes it more difficult to identify transactions with commercially acceptable terms.
Even if Global Atlantic does find suitable opportunities, it may not be able to consummate these transactions because of
the applicable regulatory requirements and approvals, or other considerations, including various insurance regulators
scrutinizing asset-intensive funded reinsurance. For example, the NAIC recently adopted a requirement for life insurers that
engage in certain reserve-financing or asset-intensive reinsurance treaties to perform robust asset adequacy testing on ceded
blocks.
Moreover, there can be no assurance that Global Atlantic will have sufficient capital available, or that such capital will be
available in the necessary entities, to continue growing this part of its business. Global Atlantic sponsors co-invest vehicles
that raise third-party capital to participate alongside Global Atlantic through reinsurance in certain insurance business which
Global Atlantic writes during the co-invest vehicles’ investment periods. Because these co-invest vehicles are commitment-
based structures with third-party investors, Global Atlantic is subject to the risk that certain co-invest vehicles fail or refuse to
fund their portion of a particular transaction, in which case Global Atlantic would have contractual remedies against the
defaulting co-invest vehicles, but not directly against their shareholders or lenders. Global Atlantic is also subject to the risk
that its co-invest vehicles fail to meet their obligations under their reinsurance arrangements with Global Atlantic. Global
Atlantic may seek business or investment opportunities that may not align with the investment mandates of these co-
investment vehicles, requiring Global Atlantic to find alternate sources of capital or not pursue any such opportunities, which
may impact Global Atlantic’s financial results. If Global Atlantic enters into a reinsurance transaction, there can be no
assurance that the transaction will achieve the results expected at the time the transaction is executed. Any transaction’s
terms are likely to be determined by qualitative and quantitative factors, including our estimates. These transactions expose
us to the risk that actual results materially differ from those estimates. Factors that can cause Global Atlantic’s actual
experience to vary from its estimates include macroeconomic, asset performance, business growth, demographic,
policyholder behavior, regulatory and political conditions.
As a result of any of the foregoing risks, Global Atlantic may realize materially less than the anticipated financial benefits
from reinsurance transactions, or Global Atlantic’s reinsurance transactions may be unprofitable or result in losses.
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Volatile market and economic conditions, including sustained increases or decreases in interest rates
and other interest rate fluctuations, may adversely affect our insurance business.
Global Atlantic’s business model depends on the performance of its investments to meet its policyholder liabilities. Global
Atlantic’s policyholder liabilities are sensitive to changing market and economic conditions. Periods of significant and
sustained downturns in securities markets, increased equity volatility, reduced interest rates, or deviations in expected
policyholder behavior could cause a number of different materially adverse impacts to us, including an increase in the
valuation of our liabilities, the cost of providing policy benefits and required capital, and a reduction in the account balances
of certain products, with a resulting reduction in fees earned on and profitability of such products. In times of difficult market
and economic conditions, Global Atlantic’s policyholders may choose to defer paying insurance premiums, stop paying
insurance premiums altogether or surrender their policies, or there could be an elevated rate of defaults within certain of
Global Atlantic’s investments. In addition, actual or perceived difficult conditions in the capital markets may discourage
individuals from making investment decisions and purchasing Global Atlantic’s products. The estimated cost of providing
guaranteed minimum withdrawal and death benefits of certain insurance products requires Global Atlantic to make various
assumptions about the overall performance of equity markets over the life of the product. Therefore, significant declines in
equity markets could cause Global Atlantic to incur significant operating losses and capital increases to the extent our risk
management techniques employed to manage these uncertainties are not adequate.
Interest rate risk is a particularly significant market risk for our insurance business. Fluctuations in market interest rates
can expose Global Atlantic to the risk of reduced income in respect of its investment portfolio, increases in the cost of
acquiring or maintaining its insurance liabilities, increases in the cost of hedging, or other fluctuations in Global Atlantic’s
financial, capital and operating profile. This risk arises from Global Atlantic’s holdings in interest rate-sensitive assets and
liabilities, which include annuity products and long-duration life insurance policies, derivative contracts with payments linked
to the level of interest rates or with market values which fluctuate based on the level of interest rates, as well as the fixed
income assets Global Atlantic owns in its investment portfolio. Global Atlantic seeks to cash-flow match its invested assets to
its policy liabilities and greater market volatility and uncertainty makes matching more difficult. If Global Atlantic fails to
adequately cash flow match liabilities sold with higher benefits and interest rates fall while Global Atlantic holds that liability,
Global Atlantic may not generate its expected earnings on those liabilities and may face the risk of having to reinvest in lower-
yielding assets, thereby reducing its investment income.
Both rising and declining interest rates can negatively affect our insurance business. This risk is present across most of
Global Atlantic’s insurance products, which can typically be surrendered for the cash value, less any applicable surrender
charge, at any time. Higher interest rates may result in increased surrenders on interest-sensitive products, such as annuity
contracts and certain life insurance policies, as policyholders seek higher investment returns elsewhere. This increase in
surrender outflows may create cash flow mismatches between cash received from Global Atlantic’s investments versus cash
needed to make policyholder liability payments as policyholders may surrender in higher numbers than expected. This
mismatch could result in losses if assets must be liquidated at a loss to meet the increased policyholder obligations, which
could result in potentially significant realized losses and a corresponding reduction in net income. Global Atlantic has and
may from time to time rotate its investment portfolio, including in connection with a new reinsurance transaction or in
connection with its insurance portfolio management, to achieve its desired asset mix. See “—Risks Related to Our Business—
We may pursue new business opportunities, strategic initiatives, or investment opportunities that involve new or unique
business, regulatory or other complexities and risks” for further information pertaining to this strategic initiative of Global
Atlantic. Sales of investments in a higher rate environment than when the investment was made is expected to result in an
investment loss, and such loss may be significant. Sales of investments at a loss in those scenarios has decreased, and would
be expected to decrease, our net income in that period, and such decreases can be significant. Additionally, during a higher
interest rate environment the cost of insurance on new business is generally expected to be elevated, including higher
hedging costs, as benefits to policyholders on new business will generally be higher.
In addition, Global Atlantic expects that substantially all of its unrealized losses will not be realized as it typically intends
to hold investments until recovery of the losses, which may be at maturity, as part of its asset liability cash-flow matching
strategy. However, Global Atlantic may be required to recognize an impairment to goodwill and may realize losses as a result
of credit defaults or impairments on investments. An increase in surrenders or withdrawals also may cause Global Atlantic to
accelerate the amortization of certain costs and depreciation of certain assets. During periods of falling or lower interest
rates, Global Atlantic may also face cash flow mismatches between interest earned on its investment portfolio and policy
liabilities that may be crediting higher rates. When rates decline more policyholders might hold onto their products with
higher pre-existing crediting rates for longer than expected because those products seem more attractive, and Global
Atlantic’s ability to lower crediting rates is subject to several constraints. Prolonged periods of low interest rates could
challenge product development and attractiveness and may also result in Global Atlantic earning lower margins on new
business volumes than it has historically earned. Lower interest rates may reduce the demand for Global Atlantic’s insurance
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products, leading to lower sales, and may make the reinsurance solutions Global Atlantic is able to offer more expensive to
potential clients. In a period of declining or lower interest rates, Global Atlantic’s investment earnings may decline because
existing investments may prepay or refinance and new investments will likely bear lower interest rates, and Global Atlantic
may not be able to fully offset the decline in investment earnings with lower liability costs on the products these investments
support. In addition, the yield on Global Atlantic’s floating rate assets will decline as interest rates decline, reducing Global
Atlantic’s investment income.
During these periods, existing life insurance and annuity products also may be relatively more attractive to consumers
due to minimum guarantees, resulting in a higher percentage of contracts remaining in force than originally estimated,
causing greater claims costs and asset/liability cash flow mismatches. Conversely, management actions to reduce rates on in-
force contracts in response to declining interest rates may result in greater surrenders than originally estimated, which may
adversely affect Global Atlantic’s earnings related to those products.
Additionally, to the extent that changes in market conditions, including changes to interest rates and net spreads, cause
the cost of our financing to increase relative to the income that can be derived from the assets acquired or financed, our
ability to generate returns on these assets would be reduced and, therefore, we may limit the volume of new originations.
While we hedge certain market risks, hedges will not mitigate all risk, and we do not hedge all risks. Moreover, market
conditions can result in significant variations in margin or collateral posting requirements for our hedges. Increases in
collateral requirements could be material and have an adverse effect on our financial condition, results of operations, liquidity
or cash flows.
The disruption of our third-party distribution network may have a material adverse effect on us.
Global Atlantic uses third-party intermediaries to distribute its retirement and preneed business products to individuals.
Global Atlantic’s distribution partners are not captive and may sell retirement and life insurance products of Global Atlantic’s
competitors. If Global Atlantic’s competitors have more attractive insurance products than Global Atlantic, these
representatives may concentrate their efforts in selling Global Atlantic’s competitors’ products. If Global Atlantic’s products
are not retained on or added to the platforms of its distribution partners, sales of Global Atlantic’s products may be materially
reduced.
Key distribution partners, such as banks and broker-dealers, may change their business models in ways that affect how
Global Atlantic’s products are sold, or terminate their distribution contracts with Global Atlantic, or new distribution channels
could emerge and adversely impact the effectiveness of Global Atlantic’s distribution efforts.
Distribution partners may also stop offering one or more of Global Atlantic’s products for a variety of other reasons.
Some of Global Atlantic’s distribution partners and potential distribution partners use proprietary or third-party scoring
systems in determining which products to sell. If Global Atlantic’s scores fall to levels unacceptable to its distribution
partners, they may no longer distribute Global Atlantic’s products to their customers. If any one of such distribution partners
were to terminate its relationship with Global Atlantic or reduce the amount of sales which it produces, our insurance
business would likely be adversely affected.
In our insurance sales, even though conducted through a distribution partner, Global Atlantic is responsible under
insurance regulations for the sales practices used by the distribution partner. In addition, even when the distribution partner
conducts the review of whether a product is suitable for the individual, if such review is required, Global Atlantic is
responsible under insurance regulations for the suitability review. Any improper practices by such distribution partners will
subject Global Atlantic to reputational harm, regulatory scrutiny, and potential regulatory actions and penalties.
If the assumptions and estimates used for our insurance business differ significantly from our actual
results, we may experience significant losses.
GAAP requires the application of accounting guidance and policies that often involve a significant degree of judgment
when accounting for insurance products. These accounting estimates require the use of assumptions, some of which are
highly uncertain at the time of estimation. These estimates and are based on judgment, current facts and circumstances and,
when applicable, internally developed models. Therefore, actual results could differ from these estimates, possibly in the
near term, and could have a material adverse effect on our financial statements. These include assumptions and estimates
related to, among other things, policyholder behavior, including surrenders, lapses, longevity, mortality and morbidity, and
economic factors, including interest rates and equity markets. Inaccuracies could result in, among other things, an increase in
policyholder benefit reserves which would result in a charge to earnings or other material adjustments to our financial
statements. Additionally, the potential for unforeseen developments, including changes in laws, regulations or accounting
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standards, may result in losses and loss expenses materially different from the reserves initially established, which could also
materially and adversely impact Global Atlantic’s business, financial condition, results of operations and prospects.
In addition, Global Atlantic employs models to price products, calculate reserves and value assets, as well as to evaluate
risk and determine internal capital requirements, among other uses. These models rely on estimates and projections that are
inherently uncertain, may use incomplete, outdated or incorrect data or assumptions and may not operate properly. As we
continue to expand and evolve our insurance business, the number and complexity of models Global Atlantic employs has
grown, increasing exposure to error in the design, implementation or use of models, including the associated data input,
controls and assumptions, and the controls in place to mitigate their risk may not be effective in all cases. While we
periodically review the adequacy of Global Atlantic’s reserves and the assumptions underlying those reserves at least
annually, we cannot precisely determine the amounts that Global Atlantic will pay for, or the timing of payment of, actual
benefits, claims and expenses or whether the assets supporting policy liabilities, together with future premiums, will grow to
the level assumed prior to the payment of benefits or claims. As a result, future experience could deviate significantly from
our assumptions. If actual experience differs significantly from assumptions or estimates, certain balances included in Global
Atlantic’s balance sheet may not be adequate. If we conclude that Global Atlantic’s reserves, together with future premiums,
are insufficient to cover future policy benefits and claims, Global Atlantic would be required to increase its reserves and incur
income statement charges for the period in which it makes the determination, which could have a material adverse effect on
us. Changes in regulations relating to reserves may cause fluctuations to the amount of statutory reserves held and could
adversely impact our insurance business. The NAIC has adopted a new actuarial guideline relating to reinsurance reserves
that could result in a determination that increased reserves are advisable. There can be no guarantee as to the impact of
changes to reserves on Global Atlantic.
Furthermore, significant estimates and assumptions are required to establish and amortize the significant costs our
insurance business incurs in connection with acquiring new and renewal insurance business. Global Atlantic periodically
revises the key assumptions used in the calculation of the amortization of these costs; however, there is a significant level of
discretion exercised in making these determinations. To the extent policy or contract terminations exceed projected levels or
if key assumptions are revised, then the amortization of deferred revenues and expenses will be accelerated in the period of
the change and will result in a charge to income, which could have a material adverse effect on Global Atlantic’s profitability.
Furthermore, the determination of the amount of impairments and allowances for credit losses is based upon our
periodic evaluation and assessment of known and inherent risks associated with the respective asset class and the specific
investment being reviewed. Changes in allowances for credit losses can result in either a charge or credit to earnings. The
assessment of whether impairments have occurred is based on a case-by-case evaluation of the underlying reasons for the
decline in fair value. There can be no assurance that we have accurately assessed the level of impairments taken in our
financial statements and their potential impact on Global Atlantic’s regulatory capital. Furthermore, additional impairments
and allowance provisions may be taken in the future, which could have a material adverse effect on us.
If the ratings of our insurance subsidiaries are downgraded, it may materially and adversely affect our
ability to sell our products, conduct our business, raise equity or issue debt.
Financial strength ratings are published by various nationally recognized statistical rating organizations (“NRSROs”) and
similar entities not formally recognized as NRSROs. Rating organizations periodically review the financial performance, capital
adequacy and condition of insurers, including Global Atlantic’s insurance and reinsurance subsidiaries. Rating agencies also
consider general economic conditions and other circumstances outside the rated company’s control in assigning a rating. The
various rating agencies periodically review and may modify their standards, established guidelines and capital models from
time to time.
Global Atlantic’s clients and counterparties use Global Atlantic’s insurance financial strength ratings as one source to
assess its financial strength and quality. Downgrades in Global Atlantic’s credit ratings or changes to its rating outlook, or
downgrades or changes in outlook to the financial strength ratings of Global Atlantic’s insurance subsidiaries, could have a
material adverse effect on our insurance business in many ways, including by:
•limiting access to distributors;
•limiting or preventing Global Atlantic’s ability to write new insurance policies and generate new business volumes;
•decreasing profitability;
•increasing policy lapse activity;
•limiting access to capital markets and potentially increasing the cost of debt, which could adversely affect liquidity;
•increasing regulatory scrutiny;
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•adversely affecting the pricing terms Global Atlantic can obtain; and
•triggering contractual clauses that permit the counterparty to terminate or require posting of additional collateral.
In addition, failure by Global Atlantic to maintain minimum RBC ratio requirements in certain contracts could permit the
counterparty to terminate the contract, recapture business or require posting of additional collateral.
In order to maintain its current ratings, Global Atlantic could be required to reduce its risk profile by, for example,
reinsuring and/or retroceding some of its business, materially altering its business and sales plans or by raising additional
capital. Any such action could have a material adverse effect on us. There is no guarantee that Global Atlantic will be able to
maintain its ratings in the future or that such ratings will not be withdrawn, and any actions taken by ratings agencies to
downgrade any of our insurance subsidiaries could result in a material adverse effect on us.
Our insurance business faces risks associated with business we cede to other reinsurers as well as
business ceded to us.
As part of Global Atlantic’s overall risk management strategy, it cedes business to other insurance companies through
reinsurance. Global Atlantic’s inability to collect from its reinsurers (including reinsurance clients in transactions where Global
Atlantic reinsures business net of ceded reinsurance) on its reinsurance claims could have a material adverse effect on us.
Although reinsurers are liable to Global Atlantic to the extent of the reinsurance coverage it acquires, Global Atlantic remains
primarily liable as the direct insurer on all risks that it writes. Global Atlantic’s reinsurance agreements do not eliminate its
obligation to pay claims. As a result, Global Atlantic is subject to the risk that it may not recover amounts due from reinsurers.
A reinsurer’s insolvency, or its inability or unwillingness to make payments due to Global Atlantic under the terms of the
relevant reinsurance agreements, could have a material adverse effect on us.
Global Atlantic also bears the risk that the companies that reinsure its mortality risk on a yearly renewable term increase
the premiums they charge to levels Global Atlantic deems unacceptable. If that occurs, Global Atlantic will either need to pay
such increased premiums, or alternatively, Global Atlantic will need to limit or potentially terminate reinsurance, which will
increase the risks that Global Atlantic retains. Conversely, certain of our insurance subsidiaries assume liabilities from other
insurance companies. Changes in the ratings, creditworthiness or market perception of such ceding companies or in the
administration of policies reinsured to Global Atlantic could cause policyholders of contracts reinsured to Global Atlantic to
surrender or lapse their policies in unexpected amounts. In addition, to the extent such ceding companies do not perform
their obligations under the relevant reinsurance agreements, Global Atlantic may not achieve the results intended and could
suffer unexpected losses. Certain reinsurance transactions require additional operational support, administration, regulatory
filings and compliance with jurisdiction-specific laws and regulations, subjecting Global Atlantic to additional scrutiny and
risks. These risks could materially and adversely affect us.
Additionally, certain of Global Atlantic’s reinsurance agreements contain triggers that, if breached, may result in the
ceding company having the right to recapture the reinsured business (i.e., by reassuming under certain circumstances all or a
portion of the risk previously ceded to Global Atlantic) or terminate the reinsurance agreement with respect to new business.
Conversely, for reinsurance transactions in which the ceding company cedes all or a portion of the risk to Global Atlantic,
Global Atlantic’s reinsurance agreements typically include a recapture right that is triggered if, for example, Global Atlantic
fails to maintain certain minimum levels of capitalization or certain minimum levels of reserves to support the business
reinsured. These reinsurance agreements may include provisions that provide for termination of the agreement and
recapture of the business upon the occurrence of insolvency, rehabilitation, reduction in regulatory capital below specified
levels, non-payment of amounts due, material breach of contract provisions or failure to provide the ceding company with the
ability to take reserve credit. Global Atlantic may recapture liabilities it intended to reinsure off its balance sheet and may
require additional capital to back these liabilities. The economic, financial and liquidity impact from the loss of the recaptured
business, in addition to Global Atlantic’s economic hardships at the time of recapture, may have a material adverse effect on
us.
In addition, if Global Atlantic assumes liability for policyholder servicing in reinsurance transactions and the reinsured
polices are not properly serviced, Global Atlantic may experience regulatory intervention, litigation or other adverse impacts.
For example, in the past, Global Atlantic experienced policyholder and agent class action litigation matters and a number of
regulatory matters stemming from service disruptions caused by a third-party administrator for life insurance policies.
Additionally, Global Atlantic holds a significant portion of its reinsurance assets in trust, which may restrict Global
Atlantic’s ability to invest those assets or to use such assets to support our liquidity needs for other purposes and also may
permit the ceding company to withdraw those assets from the trust in certain circumstances.
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Changes in tax laws or an adverse interpretation by tax authorities may adversely impact our
insurance business.
Unless the context otherwise requires, the term “Bermuda insurance subsidiaries” refers to Global Atlantic Assurance
Limited. “GAFL” refers to Global Atlantic Financial Limited, which, before January 2, 2024, was a Bermuda exempted
company. On April 1, 2016, Global Atlantic completed a reorganization of GAFL (the “GAFL Reorganization”). Because of the
GAFL Reorganization, Section 7874 limits the ability of Global Atlantic's U.S. holding company and its U.S. affiliates to utilize
certain U.S. tax attributes to offset, during the ten-year period following the GAFL Reorganization, their U.S. taxable income,
or related income tax liability, resulting from certain transfers of stock or other properties and certain income received or
accrued by reason of a license of any property by Global Atlantic's U.S. holding company and its U.S. affiliates. Effective
January 2, 2024, GAFL continued its corporate existence as a Delaware company, changing its name to Global Atlantic Limited
(Delaware). The IRS may successfully challenge GAFL’s status as a non-U.S. corporation for U.S. federal income tax purposes
before January 2, 2024. Under U.S. federal income tax law, a corporation is generally considered a tax resident of the
jurisdiction of its organization or incorporation. Because GAFL was a Bermuda-incorporated exempted entity before January
2, 2024, it would generally be classified as a non-U.S. corporation and non-U.S. tax resident for periods before 2024. Section
7874 of the Code (“Section 7874”) provides an exception to this rule under which a non-U.S. incorporated entity may, in
certain circumstances, be treated as a U.S. corporation for U.S. federal income tax purposes. Section 7874 is complex with
limited guidance regarding its application. There can be no assurance that the IRS will agree that GAFL should not be treated
as a U.S. corporation for periods before 2024. If for such periods GAFL were to be treated as a U.S. corporation for USFIT
purposes, GAFL would be subject to substantial additional historic USFIT liability, which could adversely affect us. While Global
Atlantic has taken steps to mitigate this risk, there can be no assurance that these steps will be successful.
If Global Atlantic was, or our non-U.S. insurance subsidiaries are or were, engaged in trade or business within the U.S.
(“ETB”) and subject to U.S. federal income tax, we could be materially and adversely affected. Certain Global Atlantic
subsidiaries are non-U.S. companies treated as corporations for USFIT purposes. Prior to 2024, the Bermuda insurance
subsidiaries and GAFL have conducted, and the insurance subsidiaries intend to conduct, substantially all operations outside
the U.S. and to limit their U.S. contacts with the intention that the Bermuda insurance subsidiaries not be treated as ETB.
Considerable uncertainty exists as to when a non-U.S. corporation is ETB. There can be no assurance that the IRS will not
contend that the Bermuda insurance subsidiaries are or were ETB.
There is U.S. federal income tax risk associated with reinsurance transactions, intercompany transactions and
distributions between U.S. companies and their non-U.S. affiliates, including from the Base Erosion and Anti-Abuse Tax (the
“BEAT”) on certain U.S. companies that make deductible payments to related non-U.S. companies. While we have taken steps
to mitigate the BEAT, there can be no assurance that these steps will be successful. Additionally, the Code permits the IRS to
reallocate, recharacterize, or adjust certain tax items related to a reinsurance agreement between related parties to reflect
the proper “amount, source or character” for each item. Further, the tax treatment of certain aspects of reinsurance ceded to
a non-U.S. reinsurer on a funds withheld coinsurance basis is uncertain. If the IRS were successfully to challenge Global
Atlantic's intercompany reinsurance arrangements between its subsidiaries or Global Atlantic's tax treatment of funds
withheld coinsurance with non-U.S. reinsurers (including our Bermuda insurance subsidiaries), we could be materially and
adversely affected. There are cross-border transactions in place among Global Atlantic's affiliates and non-U.S. third parties,
some of which Global Atlantic treats as loans or swaps for tax purposes. Global Atlantic expects to expand the scope of its
cross-border intercompany transactions in the future. If the IRS successfully challenges any of the foregoing items in this
paragraph or the tax treatment of these transactions, or if a change in law alters the expected tax treatment of such
transactions, we could be materially and adversely affected.
U.S. tax law changes could affect the products our insurance subsidiaries sell. Many such products benefit from tax-
favored statuses under current U.S. federal and state income tax regimes. For example, our insurance subsidiaries sell and
reinsure annuity contracts that allow the policyholders to defer the recognition of taxable income earned within the contract.
Additionally, current U.S. federal tax law permits excluding death benefits paid under life insurance contracts from taxation.
U.S. tax law changes altering the tax benefits or treatment of certain products could materially reduce demand for our
products and unpredictably affect policyholder behavior with respect to existing annuity products. Additionally, changes in
corporate or individual tax rates or the estate tax exclusion could impact the competitiveness of Global Atlantic’s product
pricing or demand, which could adversely affect us.
Bermuda enacted legislation in 2023 implementing a corporate tax aimed at certain multinational enterprises effective
for tax years beginning in 2025. Implementation may be delayed for certain groups for up to five years. The Bermuda
corporate income tax is a flat minimum tax on 15% of reported financial profits and provides for various offsets and credits.
There is uncertainty regarding the implementation of the Bermuda corporate income tax and its application to insurance
companies.
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See Note 18 “Income Taxes” in our financial statements for further information regarding tax matters and “—Risks
Related to Our Business—Changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items by
tax authorities could adversely impact our effective tax rate and tax liability” for discussions of the OECD’s BEPS project.
Our insurance business is heavily regulated, and such regulations may have a material and adverse
effect on our business, financial condition and results of operations.
Our insurance and reinsurance subsidiaries are highly regulated by, among others, insurance regulators in the United
States and Bermuda, and changes in regulations affecting our insurance business may reduce Global Atlantic’s profitability
and limit its growth. The laws and regulations of the jurisdictions in which our insurance and reinsurance subsidiaries are
domiciled or may be deemed commercially domiciled may require these companies to, among other things, maintain
minimum levels of statutory capital, surplus and liquidity, meet solvency standards, submit to periodic examinations of their
financial condition, restrict payments of dividends and distributions of capital, restrict our ability, in certain cases, to write
insurance and reinsurance policies, make certain types of investments and distribute funds, and restrict the type and
concentration of investments that can be made. For example, due to regulatory restrictions on the payment of dividends, our
U.S. insurance subsidiaries may not declare a dividend in 2025 to the corporate parent companies of our insurance business
without prior domiciliary state regulatory approval. Offering new products or offering products in additional jurisdictions will
also subject Global Atlantic to additional regulation and compliance requirements.
With respect to investments, our insurance and reinsurance subsidiaries must comply with applicable regulations and
statutes regarding the type and concentration of investments it may make. Investment-related regulations include limits,
regulatory approvals of affiliate investments, permissible asset classes, capital required and limitations with respect to what
assets or portion of assets may back reserves. These restrictions may limit Global Atlantic’s ability to invest in and our ability
to earn fees on those investments. In addition, our insurance and reinsurance subsidiaries are subject to laws and regulations
governing affiliate transactions. The investment management agreements between our investment manager and our
insurance subsidiaries were approved by the applicable U.S. and Bermuda insurance regulators, and any changes to such
agreements, including with respect to fees, must receive applicable regulatory approval. These regulations may materially and
adversely impact our insurance business’ returns and capital requirements.
In addition, our U.S. insurers are required to be members of state guaranty associations. Guaranty associations subject
insurers to assessments to pay policyholders in the event of another insurer’s insolvency. We cannot predict the amount,
nature or timing of any future guaranty assessments. Any such assessment may be material and have an adverse effect on our
financial condition, results of operations, liquidity or cash flows, and any liability we have previously established for these
assessments may be inadequate. See also “—Risks Related to Regulatory Matters” above. Our Bermuda insurance
subsidiaries and sponsored co-investment vehicles that provide third-party capital to support our insurance business are
licensed to conduct insurance business by the BMA. The BMA regulates and supervises each Bermuda insurer on a stand-
alone basis in Bermuda. The Bermuda Insurance Act and the policies of and other codes issued by the BMA require each of
Bermuda insurer to, among other requirements, maintain a minimum level of capital and surplus, satisfy solvency standards,
comply with conduct guidelines, comply with restrictions on dividends, obtain prior approval or provide notification to the
BMA of changes in controlling interests by a shareholder across prescribed thresholds, make financial statement filings,
prepare a financial condition and risk management report, maintain a head office in Bermuda from which each of our
Bermuda insurance subsidiaries’ insurance business will be directed and managed, and allow for the performance of certain
periodic examinations of its financial condition. These statutes and regulations may restrict Global Atlantic’s ability to write
insurance and reinsurance policies, distribute funds, and pursue its investment strategy.
If our relationships, or our reputation with, various regulatory authorities were to deteriorate, we could be materially and
adversely affected, including by making it more difficult, or impossible, for Global Atlantic to obtain necessary consents and
approvals.
Our insurance business may become subject to additional regulations, which may have material and adverse impact on
our business, financial condition and results of operations.
In addition to the regulations of the jurisdictions where our insurance subsidiaries are domiciled or may be deemed
commercially domiciled, Global Atlantic insurers also must obtain licenses to write insurance in other states and jurisdictions.
Our insurers follow operational guidelines designed to prevent conducting insurance business that requires a license in a
jurisdiction where the insurer is not licensed. Our non-U.S. insurance subsidiaries have and may obtain certified reinsurer and
reciprocal jurisdiction reinsurer status in various U.S. states. Most state regulatory authorities are granted broad discretion in
connection with their decisions to grant, renew or revoke licenses and approvals that are subject to state statutes. If Global
Atlantic is unable to renew the requisite licenses and obtain the necessary approvals or otherwise does not comply with
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applicable regulatory requirements, the insurance regulatory authorities could stop, or temporarily suspend, Global Atlantic
from conducting some or all of its operations as well as impose fines. We may also need to seek new licensing, which could
subject our insurers to additional or new regulations. In addition, if one of our non-U.S. insurers does not receive an annual
renewal of its reciprocal jurisdiction reinsurer status, it will be required to post additional collateral, which will have a
negative effect on us and our financial condition.
Furthermore, as Global Atlantic seeks to expand its business outside of the U.S., it may become increasingly exposed to
other applicable regulatory regimes in other jurisdictions, which may be extensive, complex and varied. As a result, any
future overseas expansion of Global Atlantic’s business would subject us to additional regulatory risk, potential litigation, and
increased compliance costs, and creates potential for additional liabilities and penalties.
Insurance regulations are subject to change, and such changes may have a material and adverse impact on our
business, financial condition and results of operations.
Regulators continuously consider changes to insurance regulations. Since insurance regulations apply to many aspects of
an insurer’s business, changes in insurance regulation may have a range of impacts on us. In recent years, state insurance
regulators have undertaken a review of the state-based insurance regulatory framework in the United States to bolster their
ability to address concerns stemming from the increasing usage of offshore reinsurance transactions and expanding
allocations to affiliated assets and alternative assets. In addition, some state legislatures have considered or enacted laws
that alter, and in many cases increase, state authority to regulate insurance holding companies and insurance and reinsurance
companies. Regulatory changes have the ability to impact other areas of Global Atlantic’s business as well, including access to
liquidity or ability to write certain products. For example, there has been regulatory scrutiny of insurance companies’ use of
Federal Home Loan Banks for liquidity, as well as of increased issuances of funding agreement backed notes and pension risk
transfer group annuity contracts. We are unable to predict whether, when or in what form and what impact such regulatory
changes will have on our insurance business.
Regulators also continue to propose or adopt sometimes conflicting or overlapping fiduciary rules, best interest standards
and other similar laws and regulations applicable to the sale of retirement and life insurance products, which would generally
require advisers providing investment recommendations to act in the client’s best interest or put the client’s interest ahead of
their own interest. These new and proposed regulations may fundamentally adversely impact the way in which our insurance
products are marketed and offered by its distribution partners. Regulators in enforcement actions and private litigants in
litigation could also find it easier to attempt to extend fiduciary status to, or to claim fiduciary or contractual breach by,
advisors who would not be deemed fiduciaries under current regulations. Such laws and regulations may have a material
adverse impact on our insurance business, including by increasing compliance costs and burdens and restricting our ability to
conduct and grow our insurance business.
Capital regulations applicable to our insurance subsidiaries impose meaningful limitations on our insurance business,
and any changes to them may have a material and adverse impact on our business, financial condition and results of
operations.
Capital regulations applicable to our insurance subsidiaries impose meaningful limitations on our insurance business and
are subject to change. Insurance companies are subject to minimum capital and surplus requirements that vary by the
jurisdiction where the insurance company is domiciled and are generally subject to change over time. The capital regimes in
the United States and Bermuda are different, and regulatory actions to address such differences may result in Global Atlantic
needing to hold more capital. Any failure to meet applicable requirements or minimum statutory capital requirements could
subject Global Atlantic to examination or corrective action by regulators, including limitations on Global Atlantic’s writing
additional business or engaging in finance activities, supervision, receivership or liquidation. The NAIC has recently adopted
and is currently considering a variety of reforms to its RBC framework, which could increase the capital requirements for our
US insurance subsidiaries. RBC is impacted by factors beyond Global Atlantic’s control, such as the federal tax rates and
changes the NAIC from time to time makes to factors used in calculating RBC. A change in the RBC calculation or an increase
in minimum capital requirements may require Global Atlantic to increase its statutory capital levels, which Global Atlantic may
be unable to meet. In addition, the NAIC has adopted changes related to filing exempt status for certain securities or loans,
which generally allows the use of an NRSRO rating for purposes of capital assessment as opposed to requiring review by the
Securities Valuation Office of the NAIC and continues to consider other changes. This change may result in, among other
things, the capital charge treatment of any such investment being less favorable, increasing required capital, and uncertainty
with respect to NAIC ratings of such investments. We cannot predict the likelihood of changes to the capital requirements to
which Global Atlantic is subject, whether such changes will have an impact on RBC ratios, or whether Global Atlantic will need
to raise and hold additional capital in response to such changes and any such changes may have a material adverse effect on
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us. Moreover, the determination of RBC is based on the NAIC designation of the assets in which Global Atlantic invests. NAIC
designation for certain investments depends on the applicable NRSRO rating. If there are changes in an NRSRO’s
methodology, that impacts the rating of a certain type of asset or changes or clarifications to interpretations of such
methodology or related statutory accounting guidance, Global Atlantic’s ability to invest in such assets may be impacted and
Global Atlantic’s investment results may be adversely impacted, or Global Atlantic may need to increase its required capital.
The NAIC has approved Statutory Accounting Principles (“SAP”) for U.S. insurance companies that have been
implemented by the domiciliary states of our U.S. insurance subsidiaries. The NAIC from time to time considers amendments
to the SAP and is currently considering various amendments that impact investment transactions and actuarial reserve
requirements for reinsurance.
In addition, the NAIC Accounting Practices and Procedures Manual provides that U.S. state insurance departments may
permit insurance companies domiciled therein to depart from the SAP by granting them permitted accounting practices.
Global Atlantic makes use of permitted practices and may seek approval to use additional permitted practices in the future.
There is a risk that Global Atlantic may not be able to continue to use a previously granted permitted practice. In addition, we
cannot predict whether or when the insurance departments of the states of domicile of its competitors may permit Global
Atlantic’s competitors to utilize advantageous accounting practices that depart from the SAP, the use of which is not
permitted by the insurance departments of the states of domicile of Global Atlantic’s U.S. insurance subsidiaries. Any change
in the SAP or permitted practices could have a material adverse impact on Global Atlantic.
The BMA continues to review the Bermuda Solvency Capital Requirements (“BSCR”) on an ongoing basis, including to
maintain its equivalency with Solvency II insurance capital requirements. In 2023 and 2024, the BMA issued a series of
consultation papers exploring updates to its Economic Balance Sheet (“EBS”) framework (“EBS Framework”), which is used as
the basis to determine an insurer’s enhanced capital requirement, including updated requirements for reserves, capital,
investments and governance. The BMA has implemented and is in the process of implementing these requirements and could
propose further updates to certain aspects of the EBS Framework. If any such updates materially increase the ECR, it could
materially increase the amount of capital Global Atlantic is required to hold to meet its BSCR and BMA requirements.
Changes to SAP, the EBS Framework or capital models may be complex, require significant resources to implement and
have an impact on our controls, which may be significant. Failure to implement or take appropriate or effective management
actions in response to such changes may have a material adverse impact on us. We can give no assurances that the impacts
of current, proposed or future changes to SAP, EBS Framework, capital models or any components or interpretation thereof,
the grant of permitted accounting practices to Global Atlantic’s competitors or future changes to legal, accounting, capital or
financial regimes will not have a negative impact or material adverse effect on us.
Our Bermuda insurance business is subject to additional regulatory and reputational considerations, which if we do not
properly manage may have a material and adverse impact on our business, financial condition and results of
operations.
The Bermuda insurance and reinsurance regulatory framework is subject to scrutiny from many jurisdictions. As a result
of such scrutiny, the BMA has implemented and imposed additional requirements on the licensed insurance companies it
regulates to achieve equivalence under Solvency II, the solvency regime applicable to the EU insurance sector. The BMA’s
additional requirements resulting from Solvency II equivalence include enhanced solvency and governance requirements
imposed on commercial insurers and reinsurers, including a group solvency framework that could further enhance the
required capital and solvency requirements if the BMA is deemed to be the group regulator. If Solvency II were amended in
any way, Bermuda may be required to amend its regulatory regime to maintain its equivalence under Solvency II, which could
lead to changes in the regulatory regime administered by the BMA.
We cannot provide any assurances that insurance supervisors in the United States or elsewhere will not review Global
Atlantic’s activities and assert that our Bermuda insurance subsidiaries are subject to a U.S. jurisdiction’s requirements. In
addition, our Bermuda insurance subsidiaries’ ability to write reinsurance may be subject, in certain cases, to arrangements
satisfactory to applicable supervisory bodies, as well as other indirect regulatory requirements. Regulatory scrutiny or
proposed legislation and regulations may have the effect of imposing additional requirements upon, or restricting reinsurance
from, U.S. insurers to non-U.S. insurers, particularly between affiliated insurance companies. Reinsurance between our U.S.
and Bermuda insurance subsidiaries is subject to approval by the applicable U.S. domiciliary state insurance department, and
there can be no guarantee such approval will be obtained. Our insurance business could be significantly and negatively
impacted if Global Atlantic had to recapture any reinsured business. If Global Atlantic attempts to license its Bermuda
insurance entities or its sponsored co-investment vehicles that provide third-party capital to support Global Atlantic’s
business in another jurisdiction, Global Atlantic may not be successful in such attempts and the modification of the conduct of
its business or the noncompliance with insurance statutes and regulations could significantly and negatively affect our
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insurance business. See also “—Risks Related to Regulatory Matters—Changes in the regulatory framework applicable to our
business, including the loss of exemptions or the application of enhanced group-level regulation, may materially adversely
affect us”.
If our insurance business fails to mitigate the reserve strain associated with statutory accounting rules,
it may result in a material adverse impact on our insurance subsidiaries’ capital positions or require
increasing prices or reducing sales of certain insurance products.
The application of certain statutory accounting rules for term life insurance policies with long-term premium guarantees
and universal life policies with secondary guarantees requires Global Atlantic to maintain reserves at a level that exceeds what
our insurance subsidiaries’ actuarial assumptions for the applicable business would otherwise require. Global Atlantic has
special purpose financial captive insurance company subsidiaries (“captives”) that facilitate the financing of the redundant
reserve requirements associated with these statutory accounting rules. These arrangements are subject to review by U.S.
state insurance regulators and rating agencies.
It is unclear what additional actions and regulatory changes will result from the continued scrutiny of captive reinsurers
and reform efforts by the NAIC and other regulatory bodies. The NAIC is evaluating changes to accounting rules regarding
surplus notes with linked assets, a structure used in certain captive reserve financing transactions. Further changes in such
statutory accounting rules will likely make it difficult for Global Atlantic to establish new captive financing arrangements on a
basis consistent with its current captives. As a result, the implementation of new captive structures in the future may be less
capital-efficient, may lead to lower product returns or increased product pricing, or may result in reduced sales of certain
products.
Certain of the reserve financing facilities Global Atlantic has put in place will mature prior to the run-off of the liabilities
they support. As a result, Global Atlantic may be unable to implement actions to mitigate the strain of having redundant
reserves or to maintain collateral support for its captives or existing third-party reinsurance arrangements to which one of our
captive reinsurance subsidiaries is a party. If Global Atlantic is unable to continue to implement those actions or maintain
existing collateral support, it may be required to increase statutory reserves, incur higher operating costs or tax costs, and the
competitiveness, capital and financial position and results of operations of our insurance business may be materially and
adversely affected.
Risks Related to Our Organizational Structure
Until the Sunset Date, the Series I preferred stockholder’s significant voting power limits the ability of
holders of our common stock to influence our business, and conflicts of interest may arise among the
Series I preferred stockholder and the holders of our common stock.
The Series I preferred stockholder has significant voting power until the Sunset Date, which limits the ability of holders of
our common stock to influence our business. Our Co-Executive Chairmen, when acting together, jointly control the Series I
preferred stockholder and thereby the vote of the Series I preferred stock held by it.
Until the Sunset Date, the Series I preferred stockholder has the ability to appoint and remove members of our board of
directors and has the right to approve certain corporate actions as specified in our certificate of incorporation. If the holders
of our common stock are dissatisfied with the performance of our board of directors, they have no ability to remove any of
our directors, with or without cause, until after the Sunset Date. Through the Series I preferred stockholder’s ability to elect
our board of directors and its approval rights over certain corporate transactions, the Series I preferred stockholder may be
deemed to control our business and affairs. Prior to the Sunset Date, the vote of the Series I preferred stockholder will
determine the outcome of all matters subject to a vote by our stockholders, except with respect to certain matters
enumerated in our certificate of incorporation as requiring a vote of our common stockholders or as required under NYSE
rules.
Our certificate of incorporation and bylaws also include limitations on the calling of meetings of the stockholders and
procedures for submitting proposals for business to be considered at meetings of the stockholders. In addition, any person
that beneficially acquires 20% or more of any class of stock then outstanding without the consent of our board of directors
(other than the Series I preferred stockholder) is unable to vote such stock on any matter submitted to such stockholders.
In addition, although the affirmative vote of a majority of our directors is required for any action to be taken by our board
of directors, certain actions that are specified in our certificate of incorporation will also require the approval of the Series I
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preferred stockholder. Accordingly, our board of directors may be prevented from causing us to take certain actions if the
Series I preferred stockholder does not provide its approval to any such action, even if the board of directors believes such
action may be in the best interest of us and our stockholders.
By the Sunset Date, we agreed in the Reorganization Agreement to (i) eliminate our Series I preferred stock and (ii)
establish voting rights for our common stock on a one vote per share basis for all matters subject to a common stockholders’
vote under Delaware corporate law, including with respect to the election of directors. For more information about the
transactions contemplated by the Reorganization Agreement, see Note 1 “Organization—Reorganization Agreement” in our
financial statements. For a more detailed description of our common stock and Series I Preferred Stock, see “Description of
Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934,” which is filed as an exhibit to this report.
As a “controlled company,” we qualify for some exemptions from the corporate governance and other
requirements of the NYSE and are not required to comply with certain provisions of U.S. securities
laws.
Prior to the Sunset Date, we are a “controlled company” within the meaning of the corporate governance standards of
the NYSE. As a “controlled company” we have currently elected not to comply with certain corporate governance
requirements of the NYSE, including the requirements: (i) that the listed company have a nominating and corporate
governance committee that is composed entirely of independent directors, (ii) that the listed company have a compensation
committee that is composed entirely of independent directors and (iii) that the compensation committee be required to
consider certain independence factors when engaging compensation consultants, legal counsel and other committee advisers.
Accordingly, holders of our common stock do not currently have the same protections afforded to stockholders of companies
that are subject to all of the corporate governance requirements of the NYSE.
Following the Sunset Date, including after any applicable transition period for compliance with NYSE rules, we will no
longer be exempted from the foregoing corporate governance requirements of the NYSE.
Our certificate of incorporation states that the Series I preferred stockholder is under no obligation to
consider the separate interests of the other stockholders and contains provisions limiting the liability of
the Series I preferred stockholder.
Our certificate of incorporation contains provisions stating that the Series I preferred stockholder is under no obligation
to consider the separate interests of the other stockholders in its decisions and shall not be liable to the other stockholders
for damages or equitable relief for any losses, liabilities or benefits not derived by such stockholders in connection with such
decisions, unless there has been a final and non-appealable judgment by a court of competent jurisdiction determining that
the Series I preferred stockholder or its officers and directors acted in bad faith or engaged in fraud or willful misconduct.
These provisions restrict the remedies available to stockholders with respect to actions of the Series I preferred stockholder.
In addition, we have agreed to indemnify the Series I preferred stockholder and its affiliates and any member, partner,
tax matters partner (as defined in Code as in effect prior to 2018), partnership representative (as defined in the Code), officer,
director, employee, agent, fiduciary or trustee of any of KKR or its subsidiaries (which includes KKR Group Partnership), the
Series I preferred stockholder or any of our or the Series I preferred stockholder’s affiliates and certain other indemnitees, to
the fullest extent permitted by law, against any and all losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts incurred by any such
indemnitee, including in connection with criminal proceedings. We have agreed to provide this indemnification unless there
has been a final and non-appealable judgment by a court of competent jurisdiction determining that such indemnitee acted in
bad faith or engaged in fraud or willful misconduct.
The provision of our certificate of incorporation requiring exclusive venue in the state and federal
courts located in the State of Delaware or federal district courts of the United States for certain types
of lawsuits may have the effect of discouraging lawsuits against us and our directors, officers and
stockholders.
Our certificate of incorporation requires that (i) any derivative action, suit or proceeding brought on behalf of KKR, (ii) any
action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer,
employee or stockholder of KKR to KKR or KKR’s stockholders, (iii) any action, suit or proceeding asserting a claim arising
pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws or as to
which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware or (iv)
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any action, suit or proceeding asserting a claim governed by the internal affairs doctrine may only be brought in the Court of
Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court
located in the State of Delaware. In addition, the federal district courts of the United States are the exclusive forum for the
resolution of any action, suit or proceeding asserting a cause of action arising under the Securities Act and the Exchange Act.
Our ability to pay periodic dividends to the holders of our common stock as intended is not
guaranteed.
We intend to pay cash dividends on a quarterly basis. KKR & Co. Inc. is a holding company and has no material assets
other than the KKR Group Partnership Units that we hold indirectly through wholly-owned subsidiaries and has no
independent means of generating income. The declaration and payment of dividends to our stockholders will be at the sole
discretion of our board of directors, and our dividend policy may be changed at any time. The declaration and payment of
dividends is subject to legal, contractual and regulatory restrictions on the payment of dividends by us or our subsidiaries, and
such other factors as the board of directors considers relevant. Our ability to pay dividends is also subject to the availability of
lawful funds therefor as determined in accordance with the Delaware General Corporation Law. Furthermore, by paying cash
dividends rather than investing that cash in our businesses, we risk slowing the pace of our growth, or not having a sufficient
amount of cash to fund our operations, new investments or unanticipated capital expenditures, should the need arise.
If we were deemed to be an “investment company” subject to regulation under the Investment
Company Act, applicable restrictions could make it impractical for us to continue our business as
contemplated and could have a material adverse effect on our business.
We are engaged primarily in the business of providing investment management services and an insurance business, and
not in the business of investing, reinvesting or trading in securities. Accordingly, we do not believe that we are an “orthodox”
investment company as defined in the Investment Company Act.
In addition, although KKR & Co. Inc. has no material assets other than its indirect ownership of wholly-owned subsidiaries
that in turn own interests in KKR Group Partnership, we do not believe our equity interests in our subsidiaries are investment
securities, and we believe that the capital interests of the general partners of our investment vehicles in their respective
investment vehicles are neither securities nor investment securities. Moreover, we expect that in excess of 65% of Global
Atlantic’s gross income will be derived from our insurance business.
However, a person will generally be deemed to be an investment company for purposes of the Investment Company Act
if (1) it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing,
reinvesting or trading in securities, or (2) absent an applicable exemption, it owns or proposes to acquire investment
securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items)
on an unconsolidated basis. If we, or any of our operating subsidiaries, were to be deemed to an investment company under
the Investment Company Act, then we could experience a material adverse effect. Among other things, the Investment
Company Act and the rules and regulations thereunder limit or prohibit transactions with affiliates, impose limitations on the
issuance of debt and equity securities, generally prohibit the issuance of options and impose certain governance
requirements. If anything were to happen that would cause us to be deemed to be an investment company under the
Investment Company Act, requirements imposed by the Investment Company Act, including limitations on our capital
structure, ability to transact business with affiliates and ability to compensate key employees, would make it impractical for
us to continue our business as currently conducted, impair the agreements and arrangements between and among us, and
materially and adversely affect us. In addition, we may be required to limit the amount of investments that we make as a
principal, potentially divest of our investments or otherwise conduct our business in a manner that does not subject us to the
registration and other requirements of the Investment Company Act.
Our certificate of incorporation provides that if we are subjected to registration under the provisions of the Investment
Company Act, we may exercise our right to call and purchase all of the then outstanding shares of common stock held by
persons other than the Series I preferred stockholder or its affiliates or assign this right to the Series I preferred stockholder or
any of its affiliates.
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Actions taken to implement the reorganization transactions that must occur by the Sunset Date as part
of the integrated transactions committed to in the Reorganization Agreement may adversely impact
us.
Pursuant to the Reorganization Agreement, we committed to undertake a series of integrated transactions, some of
which were completed in May 2022, and some of which must be completed by the Sunset Date, which will occur not later
than December 31, 2026, whereby our Series I preferred stock will be eliminated. Actions taken to implement the remaining
structural and governance changes required by the Reorganization Agreement by the Sunset Date could be disruptive to our
management, our business or operations, result in significant costs and expenses, fail to receive regulatory approvals, and
may not be successful in achieving their objectives and fail to result in the intended or expected benefits, any of which could
materially and adversely impact us. For a description of the rights of our Series I preferred stock see “—Until the Sunset Date,
the Series I preferred stockholder’s significant voting power limits the ability of holders of our common stock to influence our
business, and conflicts of interest may arise among the Series I preferred stockholder and the holders of our common stock”
and for more information about the Reorganization Agreement, see “Note 1 “Organization—Reorganization Agreement” in
our financial statements.
Anti-takeover provisions in our organizational documents may delay or prevent a change of control.
In addition to the provisions related to our Series I preferred stock and Series I preferred stockholder described in this
report, certain provisions in our certificate of incorporation and bylaws may discourage, delay or prevent a merger or
acquisition that a stockholder may consider favorable by, for example:
•permitting our board of directors to issue one or more series of preferred stock;
•requiring advance notice for stockholder proposals and nominations if at any time stockholders other than the Series
I preferred stockholder are permitted to submit proposals and nominations;
•restricting the ability of any stockholder other than the Series I preferred stockholder that acquires 20% or more of
any class of stock then outstanding to vote such stock without the consent of our board of directors; and
•placing limitations on convening stockholder meetings.
These provisions may also discourage acquisition proposals or delay or prevent a change in control.
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ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Cybersecurity Governance
security team”) whose responsibilities include securing data from unauthorized use or access. The cybersecurity strategy and
program at KKR includes, among other things, annual employee training about cybersecurity risks and new employee
onboarding about KKR’s security policies.
global information security program. KKR’s CISO also has prior experience in various information security roles, including
security architecture, application security, engineering and operations. He holds a Bachelor of Science in computer science
from the New York University Polytechnic School of Engineering, is a Certified Information Systems Security Professional
senior employees from across our firm. The committee focuses on significant operating and business risks, which includes
among others, regulatory, cybersecurity, operational, geopolitical, and reputational risks, and is responsible for ensuring risks
are identified, assessed, managed and mitigated effectively in the cybersecurity risk management environment for KKR, which
includes identifying and monitoring KKR’s technology risks, including those related to information security, business
Committee reports to KKR’s Risk and Operations Committee, which is comprised of senior employees from across our asset
management and insurance businesses and operating functions. KKR's Risk and Operations Committee includes our Chief
present to the Audit Committee and the Risk Committee of our Board of Directors on various topics relating to KKR's
technology risks, including KKR’s cybersecurity program, the current cybersecurity threat landscape, and risk management.
Cybersecurity Risk Management and Strategy
provided by institutes such as the National Institute of Standards and Technology. This plan is a key component of the
KKR’s Chief Compliance Officer co-chair a cybersecurity incident response team (“KKR CIRT”), which aims to manage and
mitigate the risk and impact of cybersecurity breach events at KKR, including those arising from third-party service providers,
including those providers that have access to KKR’s customer and employee data. Cybersecurity considerations affect the
selection and oversight of our third-party service providers. We perform cybersecurity-related diligence on third parties that
have access to our systems, data or facilities.
In addition to the KKR CISO and our Chief Compliance Officer, the KKR CIRT includes members of the firm’s legal,
technology, compliance, risk, public affairs, human capital and finance groups. KKR has established a notification decision
framework to determine when the KKR CIRT will provide notifications regarding certain cybersecurity incidents, with different
severity thresholds triggering notifications to different recipient groups, including the Risk and Operations Committee, senior
members of management, and our Board of Directors or its committees.
The KKR information security team undertakes a variety of measures to monitor and manage the cybersecurity risks of
KKR. Our technology platforms and applications are designed to enable us to monitor user and network behavior at KKR,
identify threats using certain analytics, and mitigate attacks across various layers of the enterprise. The KKR information
security team conducts regular internal and external audits with third-party cybersecurity experts to identify and evaluate
potential weaknesses in our cybersecurity systems. In addition, the KKR information security team conducts periodic phishing
simulations, as well as periodic employee training on KKR’s security policies and controls and provides other security training
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well as our employees, service providers and other third parties, have experienced information security and cybersecurity
attacks in the past and will likely continue to be the target of increasingly sophisticated cyber actors. For a discussion of how
risks from cybersecurity threats may affect us, see "Part 1 Item 1A. Risk Factors—"Risks Related to Our Business—
Cybersecurity failures and data security breaches could have a material adverse impact on our businesses.”
ITEM 2. PROPERTIES
Our principal executive office is located at 30 Hudson Yards, New York, New York. We also lease space for our other
offices in North America, Europe, the Middle East, and Asia-Pacific. We consider these facilities to be suitable and adequate
for the management and operations of our business.
ITEM 3. LEGAL PROCEEDINGS.
For a discussion of KKR's legal proceedings, see the section entitled "Legal Proceedings" appearing in Note 24
"Commitments and Contingencies" in our financial statements included elsewhere in this report, which is incorporated herein
by reference.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.
Shares of our common stock are listed on the NYSE under the symbol "KKR."
The number of holders of record of our common stock as of February 24, 2026 was 39. This does not include the number
of stockholders that hold shares in "street-name" through banks or broker-dealers.
Dividend Policy
Under our current dividend policy for common stock that we announced on February 5, 2026, we expect to pay our
common stockholders an annualized dividend of $0.78 per share of common stock, equal to a quarterly dividend of $0.195
per share of common stock, beginning with the dividend expected to be declared with respect to the first quarter of 2026. On
February 5, 2026, we declared a regular dividend of $0.185 per share of common stock under our prior dividend policy for the
three months ended December 31, 2025, payable on March 3, 2026 to common stockholders of record as of the close of
business on February 17, 2026.
Because we make our investment in our business through a holding company structure and the applicable holding
companies do not own any material cash-generating assets other than their direct and indirect holdings in KKR Group
Partnership Units, dividends are expected to be funded in the following manner:
•KKR Group Partnership will make distributions to holders of KKR Group Partnership Units, which consists of our
wholly-owned corporate subsidiaries (one of which, KKR Group Holdings Corp., acts as the general partner of KKR
Group Partnership), KKR Holdings II and KKR Holdings III, in proportion to their percentage interests in KKR Group
Partnership;
•Second, our wholly-owned corporate subsidiaries will distribute to us the amount of any distributions that they
receive from KKR Group Partnership, after deducting any applicable taxes; and
•Third, we will distribute to holders of our common stock and Series D Mandatory Convertible Preferred Stock the
amount of dividends declared by our Board of Directors from the distributions that we receive from our wholly-
owned corporate subsidiaries.
The limited partnership agreement of KKR Group Partnership provides for cash distributions, which are referred to as
"tax distributions," to the partners of the partnership if we determine that the taxable income of the partnership will give rise
to taxable income for its partners, including holders of restricted holdings units who are limited partners of KKR Holdings II
and KKR Holdings III. KKR Group Partnership may make tax distributions in the future, from time to time, to provide
distributions to pay for any U.S. or non-U.S. tax liabilities of the partners of KKR Holdings II and KKR Holdings III.
The declaration and payment of any dividends to holders of our common stock, holders of our Series D Convertible
Preferred Stockholders, or holders of any preferred stock which may be issued in the future are subject to the discretion of
our Board of Directors, which may change our dividend policy at any time or from time to time, and the terms of our
certificate of incorporation. There can be no assurance that dividends will be made as intended or at all or that any particular
dividend policy will be maintained. Furthermore, the declaration and payment of distributions and dividends is subject to
legal, contractual and regulatory restrictions on the payment of dividends and distributions by us or our subsidiaries, including
restrictions contained in our debt agreements, the terms of our preferred stock and such other factors as the Board of
Directors considers relevant including, among others: our available cash and current and anticipated cash needs, including
funding of investment commitments and debt service and future debt repayment obligations; general economic and business
conditions; our strategic plans and prospects; our results of operations and financial condition; and our capital requirements.
See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity—Sources of
Liquidity." In addition, under Section 170 of the Delaware General Corporation Law (“DGCL”), our Board of Directors may only
declare and pay dividends either out of our surplus (as defined in DGCL) or in case there is no such surplus, out of our net
profits.
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Share Repurchases in the Fourth Quarter of 2025
Under our current share repurchase program, KKR is authorized to repurchase its common stock from time to time in
open market transactions, in privately negotiated transactions or otherwise. The timing, manner, price, and amount of any
common stock repurchases will be determined by KKR in its discretion and will depend on a variety of factors, including legal
requirements, price, and economic and market conditions. KKR expects that the program, which has no expiration date, will
continue to be in effect until the maximum approved dollar amount has been used. The program does not require KKR to
repurchase any specific number of shares of common stock, and the program may be suspended, extended, modified, or
discontinued at any time. In addition to the repurchases of common stock described above, the repurchase program is used
for the retirement (by cash settlement or the payment of tax withholding amounts upon net settlement) of equity awards
issued pursuant to our Equity Incentive Plan representing the right to receive shares of common stock.
As of January 30, 2026, there is approximately $439 million remaining under KKR's share repurchase program.
The table below sets forth the information with respect to repurchases made by or on behalf of KKR & Co. Inc. or any
"affiliated purchaser" (as defined in Rule 10b-18(a)(3) under the Exchange Act) of our common stock for the periods
presented. During the fourth quarter of 2025, no shares of common stock were repurchased, and 141,119 equity awards
were retired.
Issuer Purchases of Common Stock | |||||||
(amounts in thousands, except share and per share amounts) | |||||||
Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) | ||||
Month #1 (October 1, 2025 to October 31, 2025) | — | $— | — | $439,640 | |||
Month #2 (November 1, 2025 to November 30, 2025) | — | $— | — | $439,236 | |||
Month #3 (December 1, 2025 to December 31, 2025) | — | $— | — | $439,186 | |||
Total through December 31, 2025 | — | — | $439,186 | ||||
(1)As previously announced in April 2024, the share repurchase program was amended such that when the remaining available amount under the share
repurchase program becomes $50 million or less (the “Share Repurchase Program Increase Threshold”), the total available amount under the share
repurchase program would automatically add an additional $500 million to the then remaining available amount of $50 million or less. The Share
Repurchase Program Increase Threshold was reached during the second quarter of 2025, and the share repurchase program total available amount
increased by $500 million. Any additional increases to this remaining available amount would require a separate approval by the Board of Directors of KKR
& Co. Inc.
ITEM 6. [Reserved]
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the consolidated financial statements of KKR &
Co. Inc., together with its consolidated subsidiaries, and the related notes included elsewhere in this report. In addition, this
discussion and analysis contains forward-looking statements and involves numerous risks and uncertainties, including those
described under "Cautionary Note Regarding Forward-looking Statements" and "Risk Factors." Actual results may differ
materially from those contained in any forward-looking statements.
Business Environment
Our asset management, insurance, and strategic holdings segments are affected by the various market and economic
conditions of the various countries and regions in which we operate. Market and economic conditions are expected to
continue to have a substantial impact on our financial condition, results of operations, and our business in various ways that
we are unable to control, including our ability to make new investments, the valuations of the investments we manage, the
amount of investment proceeds we realize when we exit our investments, the timing for such realization activity, our ability to
fundraise or to sell our various investment and insurance products and services, and the level of our capital markets activities,
as discussed in the "Risk Factors" section of this report.
In 2025, the United States continued to experience economic growth while also continuing to experience inflation in
excess of the U.S. Federal Reserve Board’s 2.0% target rate. The U.S. Federal Reserve Board lowered the target range for the
federal funds rate three times in 2025, including two reductions in the fourth quarter, that brought the target range to
3.50-3.75%. The U.S. Federal Reserve Board in connection with its fourth quarter rate reductions noted that the reduction was
in response to the slowdown in the labor market; however, they maintained a cautious stance as inflation remained
somewhat elevated and above its long-run target.
Real gross domestic product (“GDP”) growth in the Eurozone in 2025 was moderately positive. The European Central
Bank lowered the deposit rate four times in the first half of 2025 to 2.00% as part of a broader easing cycle in response to
downward revisions to inflation expectations. The European Central Bank subsequently held the deposit rate unchanged for
the remainder of 2025 as Eurozone core inflation slowed compared to 2024 and remained close to the European Central
Bank’s 2% medium-term target.
In Asia, Japan’s economy reaccelerated in 2025, supported by resilient exports and consumer spending. The Bank of
Japan continued its gradual monetary policy normalization during 2025, including an increase in its policy rate from 0.25% to
0.75%. In China, the economy grew in 2025 but continued to face significant headwinds, including weak domestic demand,
ongoing contraction in the property sector, and uncertainty relating to ongoing trade tensions with the United States as
discussed further below.
Several key economic indicators in the United States and in other countries and regions in which we operate include:
•GDP. In the United States, real GDP expanded by 2.2% for the year ended December 31, 2025, compared to an
expansion of 2.8% for the year ended December 31, 2024. Eurozone real GDP is estimated to have expanded by 1.4%
for the year ended December 31, 2025, up from 0.9% expansion for the year ended December 31, 2024. In Japan,
real GDP expanded by 1.1% for the year ended December 31, 2025, up from a 0.2% contraction for the year ended
December 31, 2024. Real GDP in China expanded 5.0% for the year ended December 31, 2025, unchanged from 5.0%
growth reported for the year ended December 31, 2024
•Interest Rates. The target federal funds rate set by the U.S. Federal Reserve Board was 3.625% as of December 31,
2025, down from 4.375% as of December 31, 2024. The benchmark short-term interest rate set by the European
Central Bank was 2.0% as of December 31, 2025, down from 3.00% as of December 31, 2024. The benchmark short-
term interest rate set by the Bank of Japan was 0.75% as of December 31, 2025, up from 0.25% as of December 31,
2024. The benchmark interest rate set by The People’s Bank of China was 3.0% as of December 31, 2025, down from
3.10% as of December 31, 2024.
•Inflation. The U.S. core consumer price index rose 2.6% on a year-over-year basis as of December 31, 2025, down
from 3.2% on a year-over-year basis as of December 31, 2024. Eurozone core inflation was 2.3% as of December 31,
2025, down from 2.7% as of December 31, 2024. In Japan, core inflation rose 1.5% on a year-over-year basis as of
December 31, 2025, down from 1.6% on a year-over-year basis as of December 31, 2024. Core inflation in China was
1.2% on a year-over-year basis as of December 31, 2025, up from 0.4% as of December 31, 2024.
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•Unemployment. The U.S. unemployment rate was 4.4% as of December 31, 2025, up from 4.1% as of December 31,
2024. Eurozone unemployment was 6.3% as of December 31, 2025, unchanged from 6.3% as of December 31, 2024.
The unemployment rate in Japan was 2.6% as of December 31, 2025, up from 2.5% as of December 31, 2024. The
unemployment rate in China was 5.2% as of December 31, 2025, substantially unchanged from 5.1% as of December
31, 2024.
In 2025, the United States equity markets appreciated on a year-over-year basis, with varying volatility throughout the
year, and the U.S. 10-year benchmark treasury yield also fluctuated throughout the year to end at a rate lower at year-end
than at the prior year-end of 2024. Short term interest rates fell as the Federal Reserve lowered benchmark interest rates.
European, Japanese and Chinese equity markets all appreciated on a year-over-year basis.
Several key financial market indicators in the United States and in other countries and regions in which we operate
include:
•Equity Markets. For the year ended December 31, 2025, the S&P 500 was up 17.9%, the MSCI Europe Index was up
36.3%, the MSCI Asia Pacific Index was up 28.7% and the MSCI World Index was up 21.6% in U.S. dollar terms, on a
total return basis including dividends. Equity market volatility as evidenced by the Chicago Board Options Exchange
Market Volatility Index (VIX), a measure of volatility, ended at 15.0 as of December 31, 2025, decreasing from 17.4 as
of December 31, 2024.
•Credit Markets. During the year ended December 31, 2025, U.S. investment grade corporate bond spreads (BofA
Merrill Lynch US Corporate Index) tightened by 3 basis points. The non-investment grade credit indices were up
during the year ended December 31, 2025, with the S&P/LSTA Leveraged Loan Index up 5.9% and the BofAML HY
Master II Index up 8.5%. During the year ended December 31, 2025, the 10-year government bond yields fell 40 basis
points in the United States, rose 49 basis points in Germany, rose 97 basis points in Japan, fell 9 basis points in the
UK, and rose 18 basis points in China.
•Commodity Markets. During the year ended December 31, 2025, the 3-year forward price of WTI crude oil decreased
approximately 7.6%, and the 3-year forward price of natural gas decreased from approximately $4.62 per MMBtu as
of December 31, 2024 to $4.51 per MMBtu as of December 31, 2025. The Japan spot LNG import price decreased to
approximately $11.03 per MMBtu as of December 31, 2025, from approximately $13.82 per MMBtu as of December
31, 2024.
•Foreign Exchange Rates. For the year ended December 31, 2025, the euro rose 13.4%, the British pound rose 7.7%,
the Japanese yen rose 0.3%, and the Chinese renminbi rose 4.5%, respectively, relative to the U.S. dollar.
Beginning in March 2025 and continuing through the date of the filing of this report, the United States and countries
around the world have experienced elevated levels of market volatility and uncertainty driven by, among other things,
geopolitical and global trade concerns, including, the imposition of tariffs and threats of tariffs by the United States on certain
of its trading partners since April 2025. This volatility and uncertainty adds to the various risks and uncertainties in the
business environment in which we operate and may have various impacts, including on the valuations of certain of our and
our investment vehicles' investments, the pace and volume of our capital market transactions, deployments, and realizations,
and our fundraising activities.
Other Trends, Uncertainties and Risks Related to Our Business
Please refer to the "Risk Factors" section of this report for important additional detail regarding risks, uncertainties, and
other conditions that could have a material favorable or unfavorable impact on our businesses, including the impact of market
and economic conditions on valuations of investments and the impact of competition we face. These risks, uncertainties, and
other conditions should be read in conjunction with this Business Environment section and the entire Risk Factor section of
this report. In particular, see "Risk Factors—Risks Related to Our Business—Global, regional and local events outside of our
control, including geopolitical events and natural disasters, could materially and adversely impact KKR”, “Risk Factors—Risks
Related to Our Investment Activities—Various conditions and events outside of our control that are difficult to quantify or
predict may have a significant impact on the valuation of our investments”, and "Risk Factors—Risks Related to Our Business
—We operate in a highly competitive industry."
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Basis of Accounting and Key Financial Measures under GAAP
We manage our business using certain financial measures and key operating metrics since we believe these metrics
measure the productivity of our operating activities. We prepare our consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America (“GAAP”). See Note 2 “ Summary of Significant
Accounting Policies” in our financial statements and “—Critical Accounting Policies and Estimates” contained in this section
below. Our key Segment and non-GAAP financial measures and operating metrics are discussed below.
Key Segment and Non-GAAP Performance Measures
The following key segment and non-GAAP performance measures are used by management in making operational and
resource deployment decisions as well as assessing the performance of KKR's business. They include certain financial
measures that are calculated and presented using methodologies other than in accordance with GAAP. These performance
measures as described below are presented prior to giving effect to the allocation of income (loss) between KKR & Co. Inc.
and holders of exchangeable securities and as such represent the entire KKR business in total. In addition, these performance
measures are presented without giving effect to the consolidation of certain investment funds and collateralized financing
entities ("CFEs") that KKR manages.
We believe that providing these segment and non-GAAP performance measures on a supplemental basis to our GAAP
results is helpful to stockholders in assessing the overall performance of KKR's business. These non-GAAP measures should
not be considered as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of these non-
GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP,
where applicable, are included under "—Segment Balance Sheet Measures—Reconciliations to GAAP Measures."
Adjusted Net Income
Adjusted Net Income ("ANI") is a performance measure of KKR’s earnings, which is derived from KKR’s reported segment
results. ANI is used to assess the performance of KKR’s business operations and measures the earnings potentially available
for distribution to its equity holders or reinvestment into its business. ANI is equal to Total Segment Earnings less Interest
Expense, Net and Other and Income Taxes on Adjusted Earnings. Interest Expense, Net and Other includes (i) interest expense
on debt obligations not attributable to any particular segment and (ii) cumulative dividend expense on the Series D
Mandatory Convertible Preferred Stock, net of interest income earned on cash and short-term investments. Income Taxes on
Adjusted Earnings represents the amount of income taxes that would be paid assuming that all adjusted earnings were
allocated to KKR & Co. Inc. and taxed at the same effective rate, which assumes that all securities exchangeable into shares of
common stock of KKR & Co. Inc. were exchanged. The economic assumptions and methodologies that impact Income taxes on
Adjusted Earnings are similar to those used in calculating the current income tax provision under U.S. GAAP. Equity based
compensation expense is excluded from ANI, because (i) KKR believes that the cost of equity awards granted to employees
does not contribute to the earnings potentially available for distributions to its equity holders or reinvestment into its
business and (ii) excluding this expense makes KKR’s reporting metric more comparable to the corresponding metric
presented by other publicly traded companies in KKR’s industry, which KKR believes enhances an investor’s ability to compare
KKR’s performance to these other companies. Income Taxes on Adjusted Earnings includes the benefit of tax deductions
arising from equity-based compensation, which reduces Income Taxes on Adjusted Earnings during the period. If tax
deductions from equity-based compensation were to be excluded from Income Taxes on Adjusted Earnings, KKR’s ANI would
be lower and KKR’s effective tax rate would appear to be higher, even though a lower amount of income taxes would have
actually been paid or payable during the period. KKR separately discloses the amount of tax deduction from equity-based
compensation for the period reported and the effect of its inclusion in ANI for the period. KKR makes these adjustments when
calculating ANI in order to more accurately reflect the net realized earnings that are expected to be or become available for
distribution to KKR’s equity holders or reinvestment into KKR’s business. However, ANI does not represent and is not used to
calculate actual dividends under KKR’s dividend policy, which is a fixed amount per period, and ANI should not be viewed as a
measure of KKR’s liquidity.
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Total Segment Earnings
Total Segment Earnings is a performance measure that KKR believes is useful to stockholders as it provides a
supplemental measure of our operating performance without taking into account items that KKR does not believe arise from
or relate directly to KKR's operations. Total Segment Earnings excludes: (i) equity-based compensation charges, (ii)
amortization of acquired intangibles, and (iii) transaction-related and non-operating items, if any. Transaction-related and
non-operating items primarily arise from corporate actions, which consist of: (i) impairments, (ii) transaction costs from
acquisitions, including any acquisition-related stock consideration, (iii) depreciation on real estate that KKR owns and
occupies, (iv) contingent liabilities, net of any recoveries, (v) certain integration, restructuring, and other non-operating
expenses, and (vi) other gains or charges that affect period-to-period comparability and are not reflective of KKR's ongoing
operational performance. Inter-segment transactions are not eliminated from segment results when management considers
those transactions in assessing the results of the respective segments. These transactions include (i) management fees earned
by our Asset Management segment as the investment adviser for Global Atlantic insurance companies, (ii) management and
performance fees earned by our Asset Management segment for acquiring and managing the companies included in our
Strategic Holdings segment, and (iii) interest income and expense based on lending arrangements where our Asset
Management segment borrows from our Insurance segment. All these inter-segment transactions are recorded by each
segment based on the applicable governing agreements. Additionally, due to the integrated nature of our segment operations
and as part of our strategic capital allocation decisions, inter-segment asset transfers have and may continue to occur. In
these cases in segment reporting, the assets are transferred at their fair value, and no realization is recognized at the time of
transfer. Earnings are recognized upon realization events and transactions with third parties. Total Segment Earnings
represents the total segment earnings of KKR’s Asset Management, Insurance and Strategic Holdings segments.
Asset Management Segment Earnings
Asset management segment earnings is the segment profitability measure used to make operating decisions and to
assess the performance of the Asset Management segment. This measure is presented before income taxes and is comprised
of: (i) Fee Related Earnings, (ii) Realized Performance Income, (iii) Realized Performance Income Compensation, (iv) Realized
Investment Income, and (v) Realized Investment Income Compensation. Asset Management Segment Earnings excludes the
impact of: (i) unrealized gains (losses) on investments, (ii) unrealized carried interest, and (iii) unrealized carried interest
compensation. Management fees earned by KKR as the adviser, manager or sponsor for its investment funds, vehicles and
accounts, including its Global Atlantic insurance companies and Strategic Holdings segment, are included in Asset
Management Segment Earnings.
Insurance Operating Earnings
Insurance Operating Earnings is the segment profitability measure used to make operating decisions and to assess the
performance of the Insurance segment. This measure is presented before income taxes and is comprised of: (i) Net
Investment Income, (ii) Net Cost of Insurance, and (iii) General, Administrative, and Other Expenses. Insurance Operating
Earnings excludes the impact of: (i) investment gains (losses) which include realized gains (losses) related to asset/liability
matching investment strategies and unrealized investment gains (losses) and (ii) non-operating changes in policy liabilities and
derivatives which includes (a) changes in the fair value of market risk benefits and other policy liabilities measured at fair
value and related benefit payments, (b) fees attributed to guaranteed benefits, (c) derivatives used to manage the risks
associated with policy liabilities, and (d) losses at contract issuance on payout annuities. Insurance Operating Earnings
includes (i) realized gains and losses not related to asset/liability matching investment strategies and (ii) the investment
management costs that are earned by our Asset Management segment as the investment adviser of the Global Atlantic
insurance companies.
Strategic Holdings Segment Earnings
Strategic Holdings Segment Earnings is the segment profitability measure used to make operating decisions and to assess
the performance of the Strategic Holdings segment. This measure is presented before income taxes and is comprised of:
Dividends, Net and Net Realized Investment Income. Strategic Holdings Segment Earnings excludes the impact of unrealized
gains (losses) on investments. Strategic Holdings Segment Earnings includes management fees and performance fee expenses
that are earned by the Asset Management segment.
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Fee Related Earnings
Fee related earnings is a performance measure used to assess the Asset Management segment’s generation of earnings
from revenues that are measured and received on a more recurring basis as compared to KKR’s investing earnings. KKR
believes this measure is useful to stockholders as it provides additional insight into the profitability of our fee generating asset
management and capital markets businesses. FRE equals (i) Management Fees, including fees paid by the Insurance and
Strategic Holdings segments to the Asset Management segment and fees paid by Ivy vehicles and other reinsurance vehicles,
(ii) Transaction and Monitoring Fees, Net and (iii) Fee Related Performance Revenues, less (x) Fee Related Compensation, and
(y) Other Operating Expenses.
Fee Related Performance Revenues refers to the realized portion of performance fees from certain AUM that has an
indefinite term and for which there is no immediate requirement to return invested capital to investors upon the realization
of investments. Fee related performance revenues consists of performance fees (i) expected to be received from our
investment funds, vehicles and accounts on a recurring basis, and (ii) that are not dependent on a realization event involving
investments held by the investment fund, vehicle or account.
Fee Related Compensation refers to the compensation expense, excluding equity-based compensation, paid from (i)
Management Fees, (ii) Transaction and Monitoring Fees, Net, and (iii) Fee Related Performance Revenues.
Other Operating Expenses represents the sum of (i) occupancy and related charges and (ii) other operating expenses.
Strategic Holdings Operating Earnings
Strategic Holdings Operating Earnings is a performance measure used to assess the firm’s earnings from companies and
businesses reported through its Strategic Holdings segment. Strategic Holdings Operating Earnings currently consists of
earnings derived from dividends that the firm receives from businesses acquired through the firm’s participation in our core
private equity strategy. Strategic Holdings Operating Earnings currently equals dividends less management fees that are
earned by our Asset Management segment. This measure is used by management to assess the Strategic Holdings segment’s
generation of earnings from revenues that are measured and received on a more recurring basis than, and are not dependent
on, realizations from investment activities.
Total Operating Earnings
Total Operating Earnings is a performance measure that represents the sum of (i) FRE, (ii) Insurance Operating Earnings,
and (iii) Strategic Holdings Operating Earnings. KKR believes this measure is useful to stockholders as it provides additional
insight into the profitability of the most recurring forms of earnings from each of KKR’s segments as compared to investing
earnings.
Total Investing Earnings
Total Investing Earnings is a performance measure that represents the sum of (i) Net Realized Performance Income and
(ii) Net Realized Investment Income. KKR believes this measure is useful to stockholders as it provides additional insight into
the earnings of KKR’s segments from the realization of investments.
Total Asset Management Segment Revenues
Total Asset Management Segment Revenues is a performance measure that represents the realized revenues of the Asset
Management segment (which excludes unrealized carried interest and unrealized gains (losses) on investments) and is the
sum of (i) Management Fees, (ii) Transaction and Monitoring Fees, Net, (iii) Fee Related Performance Revenues, (iv) Realized
Performance Income, and (v) Realized Investment Income. Asset Management Segment Revenues excludes Realized
Investment Income earned based on the performance of businesses presented in the Strategic Holdings segment. KKR
believes that this performance measure is useful to stockholders as it provides additional insight into all forms of realized
revenues generated by our Asset Management segment.
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Key Operating and Capital Metrics
Assets Under Management
Assets under management represent the assets managed (including core private equity), advised or sponsored by KKR
from which KKR is entitled to receive management fees or performance income (currently or upon a future event), general
partner capital, and assets managed, advised or sponsored by our strategic BDC partnership and the hedge fund and other
managers in which KKR holds an ownership interest. We believe this measure is useful to stockholders as it provides
additional insight into the capital raising activities of KKR and its hedge fund and other managers and the overall activity in
their investment funds and other managed or sponsored capital. KKR calculates the amount of AUM as of any date as the sum
of: (i) the fair value of the investments of KKR's investment funds and certain co-investment vehicles; (ii) uncalled capital
commitments from these funds, including uncalled capital commitments from which KKR is currently not earning
management fees or performance income; (iii) the asset value of the Global Atlantic insurance companies; (iv) the par value of
outstanding CLOs; (v) KKR's pro rata portion of the AUM of hedge fund and other managers in which KKR holds an ownership
interest; (vi) all of the AUM of KKR's strategic BDC partnership; (vii) the acquisition cost of invested assets of certain non-US
real estate investment trusts and (viii) the value of other assets managed or sponsored by KKR. The pro rata portion of the
AUM of hedge fund and other managers is calculated based on KKR’s percentage ownership interest in such entities
multiplied by such entity’s respective AUM. KKR's definition of AUM (i) is not based on any definition of AUM that may be set
forth in the governing documents of the investment funds, vehicles, accounts or other entities whose capital is included in this
definition, (ii) includes assets for which KKR does not act as an investment adviser, and (iii) is not calculated pursuant to any
regulatory definitions.
Capital Invested
Capital invested is the aggregate amount of capital invested by (i) KKR’s investment funds (including core private equity)
and Global Atlantic insurance companies, (ii) KKR's Principal Activities business line as a co-investment, if any, alongside KKR’s
investment funds, and (iii) KKR's Principal Activities business line in connection with a syndication transaction conducted by
KKR's Capital Markets business line, if any. Capital invested is used as a measure of investment activity at KKR during a given
period. We believe this measure is useful to stockholders as it provides a measure of capital deployment across KKR’s business
lines. Capital invested includes investments made using investment financing arrangements like credit facilities, as applicable.
Capital invested excludes (i) investments in certain leveraged credit strategies, (ii) capital invested by KKR’s Principal Activities
business line that is not a co-investment alongside KKR’s investment funds, and (iii) capital invested by KKR’s Principal
Activities business line that is not invested in connection with a syndication transaction by KKR’s Capital Markets business line.
Capital syndicated by KKR's Capital Markets business line to third parties other than KKR’s investment funds or Principal
Activities business line is not included in capital invested.
Fee Paying AUM
Fee paying AUM represents only the AUM from which KKR is entitled to receive management fees. We believe this
measure is useful to stockholders as it provides additional insight into the capital base upon which KKR earns management
fees. FPAUM is the sum of all of the individual fee bases that are used to calculate management fees and differs from AUM in
the following respects: (i) assets and commitments from which KKR is not entitled to receive a management fee are excluded
(e.g., assets and commitments with respect to which it is entitled to receive only performance income or is otherwise not
currently entitled to receive a management fee) and (ii) certain assets, primarily in its private equity funds, are reflected based
on capital commitments and invested capital as opposed to fair value because fees are not impacted by changes in the fair
value of underlying investments.
Uncalled Commitments
Uncalled commitments is the aggregate amount of unfunded capital commitments that KKR’s investment funds and
carry-paying co-investment vehicles (including core private equity) have received from fund investors to contribute capital to
fund future investments, and the amount of uncalled commitments is not reduced by capital invested using borrowings under
an investment fund’s subscription facility until capital is called from our fund investors. We believe this measure is useful to
stockholders as it provides additional insight into the amount of capital that is available to KKR’s investment funds and carry
paying co-investment vehicles to make future investments. Uncalled commitments are not reduced for investments
completed using fund-level investment financing arrangements or investments we have committed to make but remain
unfunded at the reporting date.
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Analysis of Consolidated Results of Operations (GAAP Basis)
The following is a discussion of our consolidated results of operations on a GAAP basis for the years ended December 31,
2025 and 2024. You should read this discussion in conjunction with the financial statements and related notes included
elsewhere in this report. For a more detailed discussion of the factors that affected our segment results in these periods, see
"—Analysis of Segment Operating Results." See "Risk Factors" and "—Business Environment" in this report for more
information about risks, uncertainties, and other market and economic conditions that may impact our business, financial
performance, operating results, and valuations. For the discussion comparing our consolidated results of operations on a
GAAP basis for the years ended December 31, 2024 and 2023, see "Part II, Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2024,
filed with the SEC on February 28, 2025.
Years Ended | |||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | ||
Revenues | |||||
Asset Management and Strategic Holdings | |||||
Fees and Other | $4,064,273 | $3,653,962 | $410,311 | ||
Capital Allocation-Based Income (Loss) | 3,771,235 | 3,558,284 | 212,951 | ||
7,835,508 | 7,212,246 | 623,262 | |||
Insurance | |||||
Net Premiums | 3,397,186 | 7,898,834 | (4,501,648) | ||
Policy Fees | 1,350,814 | 1,377,686 | (26,872) | ||
Net Investment Income | 7,665,106 | 6,574,608 | 1,090,498 | ||
Net Investment-Related Gains (Losses) | (1,041,070) | (1,423,086) | 382,016 | ||
Other Income | 256,763 | 238,410 | 18,353 | ||
11,628,799 | 14,666,452 | (3,037,653) | |||
Total Revenues | 19,464,307 | 21,878,698 | (2,414,391) | ||
Expenses | |||||
Asset Management and Strategic Holdings | |||||
Compensation and Benefits | 4,710,394 | 4,330,967 | 379,427 | ||
Occupancy and Related Charges | 135,941 | 117,111 | 18,830 | ||
General, Administrative and Other | 1,479,796 | 1,311,676 | 168,120 | ||
6,326,131 | 5,759,754 | 566,377 | |||
Insurance | |||||
Net Policy Benefits and Claims (including market risk benefit (gain) loss of $312,446 and $(147,790), respectively; remeasurement (gain) loss on policy liabilities: $(82,691) and $(74,645), respectively.) | 10,731,153 | 13,293,282 | (2,562,129) | ||
Amortization of Policy Acquisition Costs | 309,319 | 174,163 | 135,156 | ||
Interest Expense | 294,969 | 271,769 | 23,200 | ||
Insurance Expenses | 594,724 | 741,796 | (147,072) | ||
General, Administrative and Other | 756,019 | 745,096 | 10,923 | ||
12,686,184 | 15,226,106 | (2,539,922) | |||
Total Expenses | 19,012,315 | 20,985,860 | (1,973,545) | ||
Investment Income (Loss) - Asset Management and Strategic Holdings | |||||
Net Gains (Losses) from Investment Activities | 4,801,453 | 3,442,853 | 1,358,600 | ||
Dividend Income | 1,440,790 | 1,100,361 | 340,429 | ||
Interest Income | 3,181,871 | 3,458,526 | (276,655) | ||
Interest Expense | (2,776,946) | (3,034,145) | 257,199 | ||
Total Investment Income (Loss) | 6,647,168 | 4,967,595 | 1,679,573 | ||
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Years Ended | |||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | ||
Income (Loss) Before Taxes | 7,099,160 | 5,860,433 | 1,238,727 | ||
Income Tax Expense (Benefit) | 953,748 | 954,396 | (648) | ||
Net Income (Loss) | 6,145,412 | 4,906,037 | 1,239,375 | ||
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests | 155,103 | 73,149 | 81,954 | ||
Net Income (Loss) Attributable to Noncontrolling Interests | 3,619,846 | 1,756,643 | 1,863,203 | ||
Net Income (Loss) Attributable to KKR & Co. Inc. | 2,370,463 | 3,076,245 | (705,782) | ||
Series D Mandatory Convertible Preferred Stock Dividends | 118,596 | — | 118,596 | ||
Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders | $2,251,867 | $3,076,245 | $(824,378) | ||
Consolidated Results of Operations (GAAP Basis) – Asset Management and Strategic
Holdings
Revenues
For the years ended December 31, 2025 and 2024, revenues consisted of the following:
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Management Fees | $2,496,783 | $1,994,089 | $502,694 | |||
Fee Credits | (712,433) | (696,091) | (16,342) | |||
Transaction Fees | 1,762,336 | 1,857,317 | (94,981) | |||
Monitoring Fees | 210,886 | 187,538 | 23,348 | |||
Incentive Fees | 27,742 | 47,430 | (19,688) | |||
Expense Reimbursements | 165,397 | 152,726 | 12,671 | |||
Consulting Fees | 113,562 | 110,953 | 2,609 | |||
Total Fees and Other | 4,064,273 | 3,653,962 | 410,311 | |||
Carried Interest | 3,492,171 | 3,243,495 | 248,676 | |||
General Partner Capital Interest | 279,064 | 314,789 | (35,725) | |||
Total Capital Allocation-Based Income (Loss) | 3,771,235 | 3,558,284 | 212,951 | |||
Total Revenues | $7,835,508 | $7,212,246 | $623,262 | |||
Fees and Other
Total Fees and Other for the year ended December 31, 2025, increased compared to the year ended December 31, 2024,
primarily as a result of an increase in management fees, which were partially offset by a decrease in Capital Markets
transaction fees.
For a more detailed discussion of the factors that affected our transaction fees during the period, see "—Analysis of Asset
Management Segment Operating Results."
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The increase in management fees was primarily attributable to (i) management fees commencing at North America Fund
XIV in the second quarter of 2025, (ii) management fees commencing at Global Infrastructure Investors V in the third quarter
of 2024 and management fees earned on new capital raised that were retroactive to the start of the fund’s investment period
and (iii) management fees earned on new capital raised over the past twelve months by our private equity and infrastructure
K-Series vehicles. The increase was partially offset by (i) a lower level of management fees earned from Ascendant (our U.S.
middle market traditional private equity fund) due to management fees earned on new capital raised in 2024 that were
retroactive to the start of the fund’s investment period and no such retroactive fees were earned in the current year, (ii) a
decrease in management fees earned from North America Fund XIII as a result of entering its post-investment period in the
second quarter of 2025 and now paying fees based on invested capital rather than committed capital, and (iii) no
management fees earned from Asian Fund II in the current period due to the termination of management fees in the fourth
quarter of 2024.
Management fees due from consolidated investment funds and other investment vehicles are eliminated upon
consolidation under GAAP. However, because these amounts are funded by, and earned from, noncontrolling interests, upon
consolidation under GAAP, KKR's allocated share of the net income from the consolidated investment funds and other
investment vehicles is increased by the amount of fees that are eliminated. Accordingly, net income (loss) attributable to KKR
would be unchanged if such investment funds and other investment vehicles were not consolidated. For a more detailed
discussion on the factors that affect our management fees during the period, see "—Analysis of Asset Management Segment
Operating Results."
Fee credits increased compared to the prior period as a result of (i) a higher level of transaction fees in our Private Equity
business line and (ii) a higher level of monitoring fees in our Private Equity and Real Assets business lines. Fee credits owed to
consolidated investment funds and other investment vehicles are eliminated upon consolidation under GAAP. However,
because these amounts are owed to noncontrolling interests, upon consolidation under GAAP, KKR's allocated share of the
net income from the consolidated investment funds and other investment vehicles is decreased by the amount of fee credits
that are eliminated. Accordingly, net income (loss) attributable to KKR would be unchanged if such investment funds and
other investment vehicles were not consolidated. Transaction and monitoring fees earned from KKR portfolio companies are
not eliminated upon consolidation because those fees are earned from companies which are not consolidated. Furthermore,
transaction fees earned in our capital markets business are not shared with fund investors. Accordingly, certain transaction
fees are reflected in our revenues without a corresponding fee credit.
Capital Allocation-Based Income (Loss)
Capital Allocation-Based Income (Loss) for the year ended December 31, 2025, was positive primarily due to the net
appreciation of the underlying investments in many of our unconsolidated carry-earning investment vehicles, most notably
North America Fund XIII, Asian Fund IV, and our private equity and infrastructure K-Series vehicles. Capital Allocation-Based
Income (Loss) for the year ended December 31, 2024, was positive primarily due to the net appreciation of the underlying
investments in many of our unconsolidated carry-earning investment funds, most notably North America Fund XIII, Global
Infrastructure Investors IV, and our private equity and infrastructure K-Series vehicles.
KKR calculates the carried interest that would be due to KKR for each investment fund, pursuant to the fund agreements,
as if the fair value of the underlying investments were realized as of the reporting date, irrespective of whether such amounts
have been realized. Since the fair value of the underlying investments varies between reporting periods, it is necessary to
make adjustments to the amounts recorded as carried interest to reflect either (i) positive performance, resulting in an
increase in the carried interest allocated to the general partner or (ii) negative performance that would cause the amount due
to KKR to be less than the amount previously recognized, resulting in a negative adjustment to carried interest allocated to
the general partner. In each case, it is necessary to calculate the carried interest on cumulative results compared to the
carried interest recorded to date and to make the required positive or negative adjustments.
Investment Income (Loss)
Net Gains (Losses) from Investment Activities for the year ended December 31, 2025
The net gains from investment activities for the year ended December 31, 2025, were comprised of net realized gains of
$202.9 million and net unrealized gains of $4,598.6 million. See Note 4 "Net Gains (Losses) from Investment Activities – Asset
Management and Strategic Holdings" in our financial statements for detail of realized and unrealized gains and losses from
Investment Activities by asset class.
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Investment gains and losses relating to our general partner capital interest in our unconsolidated funds are not reflected
in our discussion and analysis of Net Gains (Losses) from Investment Activities. Our economics associated with these
investment gains and losses are reflected in Capital Allocation-Based Income (Loss) as described above.
For the year ended December 31, 2025, net gains (losses) from investment activities were driven primarily by mark-to-
market gains relating to our investment in Exact Holding B.V. (technology sector), USI, Inc. (financial services sector), and IVI-
RMA Global, S.L. (health care sector) held through our consolidated core private equity vehicles. These mark-to-market gains
were partially offset by (i) mark-to-market losses primarily relating to our investment in PetVet Care Centers, LLC (healthcare
sector) held through our consolidated core private equity vehicles, and OneStream, Inc. (NASDAQ: OS), (ii) mark-to-market
losses on certain foreign exchange forward contracts and (iii) mark-to-market losses on certain investments held in
consolidated CLOs.
Net investment gains (losses) for each asset class are influenced by the valuation methodology applied to each asset, as
well as factors specific to each investment. For the year ended December 31, 2025, net investment gains (losses) were
primarily generated in the following asset classes:
•Private Equity (including core private equity), which were primarily impacted by overall positive operating
performance of certain portfolio companies. Changes in market multiples varied across regions and sectors used in
the market comparables methodology for the valuation of Level III investments; and
•Real Assets, which primarily benefited from the overall positive operating performance of certain infrastructure
assets. Changes in market multiples varied across regions and sectors used in the market comparables methodology
for the valuation of Level III investments.
See "Risk Factors" and "—Business Environment" in this report for more information about the factors that may impact
our business, financial performance, operating results, and valuation.
Net Gains (Losses) from Investment Activities for the year ended December 31, 2024
The net gains from investment activities for the year ended December 31, 2024, were comprised of net realized gains of
$246.8 million and net unrealized gains of $3,196.0 million. See Note 4 "Net Gains (Losses) from Investment Activities – Asset
Management and Strategic Holdings" in our financial statements for detail of realized and unrealized gains and losses from
Investment Activities by asset class.
Investment gains and losses relating to our general partner capital interest in our unconsolidated funds are not reflected
in our discussion and analysis of Net Gains (Losses) from Investment Activities. Our economics associated with these
investment gains and losses are reflected in Capital Allocation-Based Income (Loss) as described above.
For the year ended December 31, 2024, net gains (losses) from investment activities were driven primarily by mark-to-
market gains primarily relating to our investment in USI, Inc., 1-800 Contacts Inc. (healthcare sector), April SA (financial
services sector), and Exact Holding B.V. (technology sector) held through our consolidated core private equity vehicles. These
mark-to-market gains were partially offset by mark-to-market losses primarily relating to our investment in BridgeBio Pharma,
Inc. (NASDAQ: BBIO), PetVet Care Centers, LLC (healthcare sector), and Accell Group N.V. (consumer products sector).
The factors that affect each investment strategy vary depending on the nature of the asset class and the valuation
methodology employed. For the year ended December 31, 2024, net investment gains (losses) were primarily generated in
the following asset classes:
•Private Equity (including core private equity), which were primarily impacted by (i) overall positive operating
performance of its portfolio companies and (ii) the positive returns of global equity markets and the related increase
of market multiples used in the market comparables methodology for the valuation of Level III investments; and
•Real Assets, which primarily benefited from the positive operating performance of certain infrastructure assets and,
to a lesser extent, by the positive returns of global equity markets and the related increase of market multiples used
in the market comparables methodology for the valuation of Level III investments.
See "Risk Factors" and "—Business Environment" in this report for more information about the factors that may impact
our business, financial performance, operating results, and valuation.
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Dividend Income
During the year ended December 31, 2025, dividend income was primarily from (i) our investments in 1-800 Contacts Inc.,
Exact Holdings B.V. and April SA, all held through our consolidated core vehicles and (ii) various investments in certain of our
consolidated opportunistic real estate equity funds. During the year ended December 31, 2024, dividend income was
primarily from (i) our investments in 1-800 Contacts Inc. and Exact Holdings B.V. held through our consolidated core private
equity vehicles, (ii) certain of our consolidated opportunistic real estate equity funds, and (iii) our investment in MásOrange
(telecommunications sector), held through our consolidated European Fund V.
Significant dividends from portfolio companies and consolidated funds are generally not recurring quarterly dividends,
and while they may occur in the future, their size and frequency are variable. For a discussion of other factors that affected
KKR's dividend income, see "—Analysis of Asset Management Segment Operating Results."
Interest Income
The decrease in interest income during the year ended December 31, 2025, compared to the year ended December 31,
2024, was primarily due to the impact of lower market interest rates during the current period on floating rate credit
investments held in consolidated CLOs and certain of our consolidated private credit funds. The decrease was partially offset
by the impact of closing CLOs that are consolidated subsequent to December 31, 2024. For a discussion of other factors that
affected KKR's interest income, see "—Analysis of Asset Management Segment Operating Results."
Interest Expense
The decrease in interest expense during the year ended December 31, 2025, compared to the year ended December 31,
2024, was primarily due to the impact of lower market interest rates during the current period on floating rate debt
obligations held in consolidated CLOs and at certain consolidated funds and other investment vehicles. The decrease was
partially offset by (i) the impact of closing CLOs that were consolidated subsequent to December 31, 2024, and (ii) an increase
in the amount of borrowings outstanding. For a discussion of other factors that affected KKR's interest expense, see "—Key
Segment and Non-GAAP Performance Measures."
Expenses
Compensation and Benefits
The increase in compensation and benefits during the year ended December 31, 2025, compared to the year ended
December 31, 2024, was primarily due to a higher level of accrued carried interest compensation driven by a higher level of
carried interest income earned in the current period.
Occupancy and Related Charges
The increase in occupancy and related charges during the year ended December 31, 2025, compared to the year ended
December 31, 2024, was primarily due to the commencement of new office leases in the current period.
General, Administrative and Other
The increase in general, administrative and other expenses during the year ended December 31, 2025, compared to the
year ended December 31, 2024, was primarily due to a higher level of expenses reimbursable from our investment funds and
a higher level of corporate general administrative costs, partially offset by a prior year legal accrual that did not recur in the
current period.
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Consolidated Results of Operations (GAAP Basis) – Insurance
Revenues
For the years ended December 31, 2025 and 2024, revenues consisted of the following:
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Net Premiums | $3,397,186 | $7,898,834 | $(4,501,648) | |||
Policy Fees | 1,350,814 | 1,377,686 | (26,872) | |||
Net Investment Income | 7,665,106 | 6,574,608 | 1,090,498 | |||
Net Investment-Related Gains (Losses) | (1,041,070) | (1,423,086) | 382,016 | |||
Other Income | 256,763 | 238,410 | 18,353 | |||
Total Insurance Revenues | $11,628,799 | $14,666,452 | $(3,037,653) | |||
Net Premiums
Net premiums decreased for the year ended December 31, 2025, as compared to the year ended December 31, 2024,
primarily due to a decrease in initial premiums assumed from fewer reinsurance transactions with life contingencies or
morbidity risk during the year ended December 31, 2025, as compared to the year ended December 31, 2024. Offsetting
these decreases in part were increases from new premiums earned on direct pension risk transfer and preneed insurance
products with life contingencies or morbidity risk. Initial premiums from new business are generally offset by a comparable
change in policy reserves reported within net policy benefits and claims (as discussed below under “Expenses—Net policy
benefits and claims”).
Net Investment Income
Net investment income increased for the year ended December 31, 2025, as compared to the year ended December 31,
2024, primarily due to (i) increased average assets under management due to growth in assets in the institutional and
individual market channels as a result of the cumulative impact of new business volumes in the current and preceding
quarters, and (ii) higher average portfolio yields.
Net Investment-Related Gains (Losses)
The components of net investment-related gains (losses) were as follows:
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Equity Index Options | $926,268 | $567,543 | $358,725 | |||
Interest Rate Contracts | 86,222 | (569,315) | 655,537 | |||
Funds Withheld Payable Embedded Derivatives | (521,690) | 350,241 | (871,931) | |||
Foreign Exchange and Other Derivative Contracts | (190,055) | 121,716 | (311,771) | |||
Equity Futures Contracts | (51,443) | (87,484) | 36,041 | |||
Funds Withheld Receivable Embedded Derivatives | (47,029) | 37,226 | (84,255) | |||
Net Gains (Losses) on Derivative Instruments | 202,273 | 419,927 | (217,654) | |||
Net Other Investment Gains (Losses) | (1,243,343) | (1,843,013) | 599,670 | |||
Net Investment-Related Gains (Losses) | $(1,041,070) | $(1,423,086) | $382,016 | |||
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Net Gains (Losses) on Derivative Instruments
The decrease in the fair value of embedded derivatives on funds withheld at interest payable for the year ended
December 31, 2025 was primarily driven by the changes in the fair value of the underlying investments in the funds withheld
at interest payable portfolio, which is primarily comprised of fixed maturity securities (designated as trading for accounting
purposes), mortgage and other loan receivables, and real asset investments. The underlying investments in the funds
withheld at interest payable portfolio increased in value during the year ended December 31, 2025 resulting in a loss on the
related embedded derivative, primarily due to a decrease in market interest rates during the year. In contrast, during the year
ended December 31, 2024, market interest rates increased, resulting in a decline in the fair value of the underlying
investments and a corresponding gain on the related embedded derivative.
The increase in the fair value of equity index options was primarily driven by the performance of the underlying indices.
Global Atlantic purchases equity index options to hedge the market risk of embedded derivatives in indexed universal life and
fixed-indexed annuity products (the change in which is accounted for in net policy benefits and claims). The majority of Global
Atlantic's equity index options are based on the S&P 500 Index, which increased during both the years ended December 31,
2025 and 2024, and an increase in the notional amount of equity market contracts outstanding.
The increase in the fair value of interest rate contracts was primarily driven by a decrease in market interest rates during
the year ended December 31, 2025, as compared to an increase in market interest rates during the year ended December 31,
2024, resulting in a gain on interest rate contracts for the year ended December 31, 2025, as compared to a loss on interest
rate contracts for the year ended December 31, 2024.
The decrease in the fair value of foreign exchange and other derivative contracts was primarily driven by a decrease due
to depreciation of the U.S. dollar against the euro and British pound during the year ended December 31, 2025.
Net Other Investment-Related Gains (Losses)
The components of net other investment-related gains (losses) were as follows:
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Realized Gains (Losses) on Investments Not Supporting Asset- Liability Matching Strategies | $46,402 | $22,468 | $23,934 | |||
Realized Gains (Losses) on Available-for-Sale Fixed Maturity Securities | (1,788,912) | (567,985) | (1,220,927) | |||
Credit Loss Allowances | (277,087) | (390,498) | 113,411 | |||
Unrealized Gains (Losses) on Fixed Maturity Securities Classified as Trading | 486,831 | (735,209) | 1,222,040 | |||
Unrealized Gains (Losses) on Other Investments Accounted Under a Fair-Value Option and Equity Investments | 92,162 | 9,560 | 82,602 | |||
Unrealized Gains (Losses) on Real Assets | 71,982 | (167,873) | 239,855 | |||
Realized Gains (Losses) on Real Assets | 14,386 | 11,418 | 2,968 | |||
Realized Gains (Losses) on Funds Withheld at Interest Payable Portfolio | 117,327 | 126,422 | (9,095) | |||
Realized Gains (Losses) on Funds Withheld at Interest Receivable Portfolio | (89,113) | (62,493) | (26,620) | |||
Foreign Exchange Gains (Losses) on Non-USD Denominated Investments | 221,125 | (68,632) | 289,757 | |||
Other | (138,446) | (20,191) | (118,255) | |||
Net Other Investment-Related Gains (Losses) | $(1,243,343) | $(1,843,013) | $599,670 | |||
The decrease in net other investment-related losses for the year ended December 31, 2025, as compared to the year
ended December 31, 2024, was primarily due to (i) an increase in unrealized gains on fixed maturity securities classified as
trading, and (ii) an increase in foreign exchange gains on non-U.S. dollar denominated investments due to the greater foreign
exchange volatility as a result of the depreciation of the U.S. dollar against the euro and British pound during the year ended
December 31, 2025.
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Offsetting these decreases in net other investment-related losses in part was an increase in realized losses on available-
for-sale fixed maturity securities due to portfolio repositioning trades during the year ended December 31, 2025.
Expenses
Net Policy Benefits and Claims
Net policy benefits and claims decreased for the year ended December 31, 2025, as compared to the year ended
December 31, 2024, primarily due to (i) lower initial reserves assumed related to new reinsurance transactions with life
contingencies or morbidity risk in the year ended December 31, 2025, as compared to the year ended December 31, 2024, (ii)
favorable impacts related to the assumption review described below, and (iii) the change in the value of embedded
derivatives in Global Atlantic’s fixed indexed annuity products as a result of an increase in equity market gains for the year
ended December 31, 2025, as compared to the year ended December 31, 2024 (as discussed above under "—Consolidated
Results of Operations (GAAP Basis)—Revenues—Net investment-related gains (losses)". Global Atlantic purchases equity
index options in order to hedge this risk, the fair value changes of which are accounted for in gains (losses) on derivative
instruments, and generally offsets the change in embedded derivative fair value reported in net policy benefits and claims).
These decreases were partially offset by (i) higher average funding costs due to higher crediting rates and the ordinary-
course run-off of older business originated in a low interest rate environment, (ii) new reserves established related to new
business originated with life or morbidity risks associated with preneed insurance and direct pension risk transfer products,
and (iii) an increase in market risk benefits losses due to a decrease in market interest rates for the year ended December 31,
2025, as compared to an increase in market interest rates for the year ended December 31, 2024.
The assumptions on which reserves, deferred revenue and expenses are based are intended to represent an estimate of
the benefits that are expected to be payable to, and fees or premiums that are expected to be collectible from, policyholders
in future periods. Global Atlantic reviews the adequacy of its reserves, deferred revenue and expenses, and the assumptions
underlying those items at least annually, usually in the third quarter, referred to as an “assumption review.” As Global Atlantic
analyzes its assumptions, to the extent Global Atlantic chooses to update one or more of those assumptions, there may be an
“unlocking” impact. Generally, favorable unlocking means the change in assumptions required a reduction in reserves, or in
deferred revenue liabilities, and unfavorable unlocking means the change in assumptions required an increase in reserves or
in deferred revenue liabilities, or a reduction in deferred expenses.
For the year ended December 31, 2025, there was a net favorable assumption review impact of $82.7 million on net
policy benefits and claims, which was primarily due to (i) higher expected yield assumptions for certain interest-sensitive life
products, (ii) favorable expected surrender and persistency assumption changes for certain income annuity, variable annuity,
and life insurance products, and (iii) a decrease in expected morbidity assumptions on long-term care riders for certain fixed
annuity products, offset in part by (i) higher mortality rate assumptions for certain life insurance products, (ii) a change in the
activation assumption related to certain benefit riders on fixed-indexed annuities, and (iii) higher surrender rate assumptions
for certain assumed annuity products.
For the year ended December 31, 2024, there was a net favorable assumption review impact of $74.6 million on net
policy benefits and claim, which was primarily due to (i) higher assumed mortality rates for guaranteed income riders on
fixed-indexed annuities, and (ii) higher assumed interest rate margins on certain interest-sensitive life products due to an
increase in assumed reinvestment rates and flat crediting rates. These favorable impacts were partially offset by (i) lower
assumed surrender rates on interest-sensitive life products without secondary guarantees, (ii) an increase in the option
budget assumptions for certain fixed-indexed annuities and interest sensitive life products, and (iii) higher surrender rate
assumption for certain assumed flow annuity business.
Amortization of Policy Acquisition Costs
Amortization of policy acquisition costs increased for the year ended December 31, 2025, as compared to the year ended
December 31, 2024, primarily due to (i) the remeasurement of the policy liabilities associated with certain cost-of-reinsurance
asset intangibles during the year ended December 31, 2024, resulting in an increase in the cost-of-reinsurance asset and a
decrease in amortization in the comparative twelve month period, and (ii) an increase in deferred acquisition costs
amortization for the year ended December 31, 2025 associated with the cumulative impact of new business volumes
generated from individual retirement annuities and preneed insurance.
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Interest Expense
Interest expense increased for the year ended December 31, 2025, as compared to the year ended December 31, 2024,
primarily due to an increase in total debt outstanding.
Insurance Expenses
Insurance expenses decreased for the year ended December 31, 2025, as compared to the year ended December 31,
2024, primarily due to a decrease in commission expenses as a result of the lower new business volumes in the institutional
markets channel.
General, Administrative and Other
General, administrative and other increased for the year ended December 31, 2025, as compared to the year ended
December 31, 2024, primarily due to increased employee compensation expenses, offset in part by a lower level of consulting
and employee augmentation costs.
Other Consolidated Results of Operations (GAAP Basis)
Income Tax Expense (Benefit)
Income tax expense decreased slightly for the year ended December 31, 2025, as compared to the year ended December
31, 2024, primarily driven by a lower level of income before tax attributable to KKR common stockholders partially offset by
an increase in state and foreign income taxes. As reported in Note 18 “Income Taxes” KKR’s effective tax rate is 13%. If you
are to exclude the reported net income (loss) before taxes not attributable to KKR common stockholders, KKR’s effective tax
rate would be 24%. For a discussion of factors that impacted KKR's tax provision, see Note 18 "Income Taxes" in our financial
statements included elsewhere in this report.
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests
Net income (loss) attributable to redeemable noncontrolling interests relates primarily to net income (loss) attributable
to third-party limited partner interests in consolidated investment funds and other investment vehicles when the
noncontrolling interests have redemption features that are not solely within the control of KKR. Net income (loss) attributable
to redeemable noncontrolling interests increased for the year ended December 31, 2025, as compared to the year ended
December 31, 2024, primarily due to a higher level of net gains from investment activities at these consolidated investment
funds and other investment vehicles.
Net Income (Loss) Attributable to Noncontrolling Interests
Net income (loss) attributable to noncontrolling interests relates primarily to net income (loss) attributable to (i) non-
redeemable third-party limited partner interests in consolidated investment funds and other investment vehicles and (ii)
exchangeable securities representing ownership interests in KKR Group Partnership until they are exchanged for common
stock of KKR & Co. Inc. Net income (loss) attributable to noncontrolling interests increased for the year ended December 31,
2025, as compared to the year ended December 31, 2024, primarily due to a higher level of net gains from investment
activities at our consolidated investment funds and other investment vehicles.
Net Income (Loss) Attributable to KKR & Co. Inc.
Net income (loss) attributable to KKR & Co. Inc. decreased for the year ended December 31, 2025, as compared to the
year ended December 31, 2024, primarily due to a higher level of realized investment losses on available-for-sale fixed
maturity securities in our insurance business, which were partially offset by (i) a higher level of capital allocation-based
income from our asset management business, (ii) a higher level of investment-related net gains attributable to KKR & Co. Inc.
from our asset management and strategic holdings operations and (iii) a higher level of asset management fee related income
in the current period.
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Consolidated Statements of Financial Condition (GAAP Basis)
Please see our consolidated statements of financial condition on a GAAP basis as of December 31, 2025 and December
31, 2024 in our financial statements included in this report.
KKR & Co. Inc. Stockholders’ Equity - Common Stock increased from December 31, 2024 primarily due to unrealized gains
on available-for sale-securities from Global Atlantic that are recorded in other comprehensive income and net income
attributable to KKR & Co. Inc. common stockholders, which were partially offset by dividends to common and preferred
stockholders.
Consolidated Statements of Cash Flows (GAAP Basis)
The following is a discussion of our consolidated cash flows for the years ended December 31, 2025, 2024, and 2023. You
should read this discussion in conjunction with the financial statements and related notes included elsewhere in this report.
The consolidated statements of cash flows include the cash flows of our consolidated entities, which include certain
consolidated investment funds, CLOs and certain variable interest entities formed by Global Atlantic notwithstanding the fact
that we may hold only a minority economic interest in those investment funds and CFEs. The assets of our consolidated
investment funds and CFEs, on a gross basis, can be substantially larger than the assets of our business and, accordingly, could
have a substantial effect on the cash flows reflected in our consolidated statements of cash flows. The primary cash flow
activities of our consolidated funds and CFEs involve: (i) capital contributions from fund investors; (ii) using the capital of fund
investors to make investments; (iii) financing certain investments with indebtedness; (iv) generating cash flows through the
realization of investments; and (v) distributing cash flows from the realization of investments to fund investors. Because our
consolidated investment funds are treated as investment companies for accounting purposes, certain of these cash flow
amounts are included in our cash flows from operations.
Net Cash Provided (Used) by Operating Activities
Our net cash provided (used) by operating activities was $0.5 billion, $6.6 billion, and $(1.5) billion during the years ended
December 31, 2025, 2024, and 2023, respectively. Our operating activities primarily included: (i) investments purchased (asset
management and strategic holdings), net of proceeds from investments (asset management and strategic holdings) of
$(9.2) billion, $(0.7) billion, and $(8.6) billion during the years ended December 31, 2025, 2024, and 2023, respectively, (ii) net
realized gains (losses) on investments (asset management and strategic holdings) of $0.2 billion, $0.2 billion, and $(0.8) billion
during the years ended December 31, 2025, 2024, and 2023, respectively, (iii) change in unrealized gains (losses) on
investments (asset management and strategic holdings) of $4.6 billion, $3.2 billion, and $3.8 billion during the years ended
December 31, 2025, 2024, and 2023, respectively, (iv) capital allocation-based income (loss) (asset management and strategic
holdings) of $3.8 billion, $3.6 billion, and $2.8 billion during the years ended December 31, 2025, 2024, and 2023,
respectively, (v) net investment and policy liability-related gains (losses) (insurance) of $(3.3) billion, $(3.3) billion, and $(2.6)
billion during the years ended December 31, 2025, 2024, and 2023, respectively, and (vi) interest credited to policyholder
account balances (net of policy fees) (insurance) of $5.0 billion, $4.2 billion, and $2.8 billion during the years ended December
31, 2025, 2024, and 2023, respectively. Investment funds are investment companies under GAAP and reflect their
investments and other financial instruments at fair value.
Net Cash Provided (Used) by Investing Activities
Our net cash provided (used) by investing activities was $(16.3) billion, $(19.0) billion, and $(3.9) billion during the years
ended December 31, 2025, 2024, and 2023, respectively. Our investing activities primarily included: (i) investments purchased
(insurance), net of proceeds from investments (insurance), of $(16.0) billion, $(18.9) billion, and $(3.8) billion during the years
ended December 31, 2025, 2024, and 2023, respectively, (ii) acquisitions, net of cash acquired, of $(146.3) million during the
year ended December 31, 2025, and (iii) the purchase of fixed assets of $(160.8) million, $(141.5) million, and $(108.4) million
during the years ended December 31, 2025, 2024, and 2023, respectively.
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Net Cash Provided (Used) by Financing Activities
Our net cash provided (used) by financing activities was $17.4 billion, $7.1 billion, and $12.8 billion during the years
ended December 31, 2025, 2024, and 2023, respectively. Our financing activities primarily included: (i) contributions from, net
of distributions to, our noncontrolling and redeemable noncontrolling interests of $6.3 billion, $0.1 billion, and $6.4 billion
during the years ended December 31, 2025, 2024, and 2023, respectively, (ii) proceeds received, net of repayment of debt
obligations, of $2.0 billion, $3.5 billion, and $3.6 billion during the years ended December 31, 2025, 2024, and 2023,
respectively, (iii) proceeds from the issuance of Series D Mandatory Convertible Preferred Stock (net of issuance cost) of
$2.5 billion during the year ended December 31, 2025, (iv) additions to, net of withdrawals from, contractholder deposit funds
(insurance) of $7.0 billion, $7.9 billion, and $1.9 billion during the years ended December 31, 2025, 2024, and 2023,
respectively, (v) cash consideration for the 2024 GA Acquisition of $(2.6) billion during the year ended December 31, 2024, (vi)
reinsurance transactions, net of cash provided (insurance) of $193.6 million, $47.8 million, and $1.2 billion during the years
ended December 31, 2025, 2024, and 2023, respectively, (vii) common stock dividends of $(649.9) million, $(612.1) million,
and $(563.3) million during the years ended December 31, 2025, 2024, and 2023, respectively, (viii) Series D Mandatory
Convertible Preferred Stock Dividends of $(118.6) million during the year ended December 31, 2025, and (ix) Series C
Mandatory Convertible Preferred Stock Dividends of $(51.7) million during the year ended December 31, 2023.
Analysis of Segment Operating Results
The following is a discussion of the results of our business on a segment basis for the years ended December 31, 2025 and
2024. You should read this discussion in conjunction with the information included under "—Analysis of Non-GAAP
Performance Measures" and the financial statements and related notes included elsewhere in this report. See "Risk Factors"
and "—Business Environment" in this report for more information about factors that may impact our business, financial
performance, operating results, and valuations. For the discussion comparing our business on a segment basis for the years
ended December 31, 2024 and 2023, see "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on
February 28, 2025.
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Analysis of Asset Management Segment Operating Results
The following tables set forth information regarding KKR's asset management segment operating results for the years
ended December 31, 2025 and 2024.
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Management Fees | $4,100,841 | $3,461,381 | $639,460 | |||
Transaction and Monitoring Fees, Net | 1,092,577 | 1,165,884 | (73,307) | |||
Fee Related Performance Revenues | 181,784 | 137,992 | 43,792 | |||
Fee Related Compensation | (940,721) | (833,918) | (106,803) | |||
Other Operating Expenses | (720,168) | (663,543) | (56,625) | |||
Fee Related Earnings | 3,714,313 | 3,267,796 | 446,517 | |||
Realized Performance Income | 1,879,512 | 1,822,115 | 57,397 | |||
Realized Performance Income Compensation | (1,387,776) | (1,213,327) | (174,449) | |||
Realized Investment Income | 403,455 | 534,668 | (131,213) | |||
Realized Investment Income Compensation | (60,520) | (80,198) | 19,678 | |||
Asset Management Segment Earnings | $4,548,984 | $4,331,054 | $217,930 | |||
Management Fees
The following table presents management fees by business line:
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Management Fees | ||||||
Private Equity | $1,529,169 | $1,376,335 | $152,834 | |||
Real Assets | 1,300,924 | 992,731 | 308,193 | |||
Credit and Liquid Strategies | 1,270,748 | 1,092,315 | 178,433 | |||
Total Management Fees | $4,100,841 | $3,461,381 | $639,460 | |||
The increase in Private Equity management fees was primarily attributable to (i) management fees commencing at North
America Fund XIV in the second quarter of 2025 and (ii) management fees earned on new capital raised over the past twelve
months at our private equity K-Series vehicles, net of certain revenue sharing arrangements. The increase was partially offset
by (i) a lower level of management fees earned from Ascendant (our U.S. middle market traditional private equity fund) due
to management fees earned on new capital raised in 2024 that were retroactive to the start of the fund’s investment period
and no such retroactive fees were earned in the current year, (ii) a decrease in management fees earned from North America
Fund XIII as a result of entering its post-investment period in the second quarter of 2025, and now paying fees based on
invested capital rather than committed capital, and (iii) no management fees earned from Asian Fund II in the current period
due to the termination of management fees in the fourth quarter of 2024. During the three and twelve months ended
December 31, 2025, approximately $12.0 million and $17.0 million, respectively of management fees were earned on new
capital raised that were retroactive to the start of the relevant fund’s investment period. Additionally, in the fourth quarter of
2025 approximately $11.4 million of fees were recognized for providing advisory services to entities in certain fund structures.
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The increase in Real Assets management fees was primarily attributable to (i) management fees commencing at Global
Infrastructure Investors V in the third quarter of 2024, (ii) management fees earned on new capital raised over the past twelve
months at our infrastructure K-Series vehicles, net of certain revenue sharing arrangements, and (iii) a higher level of
management fees earned from Global Atlantic primarily due to the growth in assets from inflows. The increase was partially
offset by a decrease in management fees earned from Global Infrastructure Investors III and Asia Pacific Infrastructure
Investors due to a decrease in invested capital during the current year. During the three and twelve months ended December
31, 2025, approximately $14.3 million and $71.1 million, respectively of management fees were earned on new capital raised
that is retroactive to the start of the relevant fund's investment period. Additionally, in the fourth quarter of 2025
approximately $5.6 million of fees were recognized for providing advisory services to entities in certain fund structures.
The increase in Credit and Liquid Strategies management fees was primarily attributable to (i) a higher level of
management fees earned from Global Atlantic primarily due to the growth in assets from inflows, (ii) an increase in capital
invested in certain alternative credit strategy accounts, which resulted in an increase in its fee base, and (iii) a higher level of
management fees earned from CLOs from new issuances in both the United States and Europe during the year ended
December 31, 2025.
Transaction and Monitoring Fees, Net
The following table presents transaction and monitoring fees, net by business line:
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Transaction and Monitoring Fees, Net | ||||||
Private Equity | $93,707 | $100,619 | $(6,912) | |||
Real Assets | 53,065 | 52,508 | 557 | |||
Credit and Liquid Strategies | 15,662 | 10,994 | 4,668 | |||
Capital Markets | 930,143 | 1,001,763 | (71,620) | |||
Total Transaction and Monitoring Fees, Net | $1,092,577 | $1,165,884 | $(73,307) | |||
Our Private Equity, Real Assets, and Credit and Liquid Strategies business lines earn transaction and monitoring fees from
portfolio companies, and under the terms of the management agreements with certain of our investment funds, we are
required to share all or a portion of such fees with our fund investors. For most of our investment funds, transaction and
monitoring fees are credited against fund management fees up to 100% of the amount of the transaction and monitoring fees
attributable to that investment fund, which results in a decrease of our monitoring and transaction fees. Our Capital Markets
business line earns transaction fees, which are generally not shared with fund investors.
The decrease in transaction and monitoring fees, net is primarily due to a lower level of transaction fees earned in our
Capital Markets business line. The decrease in capital markets transaction fees was primarily due to a decrease in the size of
capital markets transactions for the year ended December 31, 2025. Overall, we completed 404 capital markets transactions
for the year ended December 31, 2025, of which 49 represented equity offerings and 355 represented debt offerings, as
compared to 397 transactions for the year ended December 31, 2024, of which 56 represented equity offerings and 341
represented debt offerings. We earn fees in connection with underwriting, syndication, and other capital markets services.
While each of the capital markets transactions that we undertake in this business line is separately negotiated, our fee rates
are generally higher with respect to underwriting or syndicating equity offerings than with respect to debt offerings, and the
amount of fees that we earn for similar transactions generally correlates with overall transaction sizes.
Our capital markets fees are generated in connection with activity involving our Private Equity, Real Assets, and Credit
and Liquid Strategies business lines as well as from third-party companies. For the year ended December 31, 2025,
approximately 15% of our transaction fees in our Capital Markets business line were earned from unaffiliated third parties as
compared to approximately 13% for the year ended December 31, 2024. Our transaction fees are comprised of fees earned
from North America, Europe, and the Asia-Pacific region. For the year ended December 31, 2025, approximately 54% of our
transaction fees were generated outside of North America as compared to approximately 47% for the year ended December
31, 2024. Our Capital Markets business line is dependent on the overall capital markets environment, which is influenced by,
among other things, equity prices, credit spreads, and volatility. Our Capital Markets business line does not generate
monitoring fees.
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Fee Related Performance Revenues
The following table presents fee related performance revenues by business line:
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Fee Related Performance Revenues | ||||||
Private Equity | $2,506 | $— | $2,506 | |||
Real Assets | 105,486 | 59,557 | 45,929 | |||
Credit and Liquid Strategies | 73,792 | 78,435 | (4,643) | |||
Total Fee Related Performance Revenues | $181,784 | $137,992 | $43,792 | |||
Fee related performance revenues represent performance fees that are (i) expected to be received from our investment
funds, investment vehicles and accounts on a more recurring basis and (ii) not dependent on a realization event involving
investments held by the investment fund, vehicle or account.
The increase in fee related performance revenues for the year ended December 31, 2025 compared to the prior period
was primarily due to a higher level of performance revenues being earned from our infrastructure K-Series vehicles in our Real
Assets business line.
Fee Related Compensation
The increase in fee related compensation for the year ended December 31, 2025 compared to the prior period was
primarily due to a higher level of compensation recorded in connection with the higher level of fee related revenues.
Other Operating Expenses
The increase in other operating expenses for the year ended December 31, 2025 compared to the prior period was
primarily due to a higher level of occupancy related and general and administrative costs.
Fee Related Earnings
The increase in fee related earnings for the year ended December 31, 2025 compared to the prior period was primarily
due to (i) a higher level of management fees across our Private Equity, Real Assets, and Credit and Liquid Strategies business
lines and (ii) a higher level of fee related performance revenues primarily earned in our Real Assets business line, partially
offset by a (i) higher level of fee related compensation and other operating expenses and (ii) a lower level of transaction fees
earned in our Capital Markets business line, as described above.
Realized Performance Income
The following table presents realized performance income by business line:
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Realized Performance Income | ||||||
Private Equity | $1,321,116 | $1,312,479 | $8,637 | |||
Real Assets | 260,741 | 218,320 | 42,421 | |||
Credit and Liquid Strategies | 297,655 | 291,316 | 6,339 | |||
Total Realized Performance Income | $1,879,512 | $1,822,115 | $57,397 | |||
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Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Private Equity | ||||||
Asian Fund IV | $357,526 | $— | $357,526 | |||
Americas Fund XII | 246,984 | 828,543 | (581,559) | |||
Private Equity K-Series | 233,117 | 86,940 | 146,177 | |||
Strategic Investor Partnerships | 193,031 | — | 193,031 | |||
Core Private Equity Vehicles | 187,886 | 65,846 | 122,040 | |||
Next Generation Technology Growth Fund II | 162,679 | — | 162,679 | |||
European Fund V | 89,459 | 32,864 | 56,595 | |||
Health Care Strategic Growth Fund | 53,650 | — | 53,650 | |||
Asian Fund III | 36,984 | 248,622 | (211,638) | |||
Global Impact Fund | 13,215 | — | 13,215 | |||
Strategic Holdings Segment | 12,328 | 15,475 | (3,147) | |||
Asian Fund II Carried Interest Repayment Obligation | (344,231) | — | (344,231) | |||
Other | 78,488 | 34,189 | 44,299 | |||
Total Realized Performance Income | $1,321,116 | $1,312,479 | $8,637 | |||
Realized performance income in our Private Equity business line for the year ended December 31, 2025 consisted
primarily of (i) realized proceeds from the sale of our investments in Seiyu Group (consumer products sector) held by Asian
Fund IV, ReliaQuest, LLC (technology sector) held by Next Generation Technology Growth Fund II, Integrated Specialty
Services (financial services sector) held by Americas Fund XII, and The Citation Group (services sector) held by both European
Fund V and Global Impact Fund and (ii) performance income from our core private equity vehicles and private equity K-Series
vehicles. Realized performance income in our Private Equity business line was reduced by $344 million as a result of the
repayment of the Asian Fund II clawback obligation in the fourth quarter of 2025. On a net basis, after giving effect to carried
interest distributions already recouped from current and former employees, the clawback obligation reduced fourth quarter
2025 net realized performance income by $207 million.
Realized performance income in our Private Equity business line for the year ended December 31, 2024 consisted
primarily of (i) realized proceeds from the sale of our investments in AppLovin Corporation (NASDAQ: APP) and
GeoStabilization International (industrials sector), both held by Americas Fund XII, and Kokusai Electric Corporation (TYO:
6525) held by Asian Fund III and (ii) performance income from our core private equity vehicles and private equity K-Series
vehicles.
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Real Assets | ||||||
Global Infrastructure Investors III | $107,053 | $201,536 | $(94,483) | |||
Asia Pacific Infrastructure Investors | 110,000 | — | 110,000 | |||
Global Infrastructure Investors II | 8,744 | — | 8,744 | |||
Other | 34,944 | 16,784 | 18,160 | |||
Total Realized Performance Income | $260,741 | $218,320 | $42,421 | |||
Realized performance income in our Real Assets business line for the year ended December 31, 2025 consisted primarily
of realized proceeds from the sale of our investments in Pinnacle Towers (infrastructure: telecommunications sector) held by
Asia Pacific Infrastructure Investors, Metronet Holdings, LLC (infrastructure: telecommunications sector), and NEP Renewables
II, LLC (infrastructure: energy and energy transition sector) held by Global Infrastructure Investors III, and Q-Park N.V.
(infrastructure: transportation sector) held by Global Infrastructure Investors II.
Realized performance income in our Real Assets business line for the year ended December 31, 2024 consisted primarily
of realized proceeds from the sale of our investment in FiberCop S.p.A. (infrastructure: telecommunications sector) and
ADNOC Oil Pipelines (infrastructure: midstream sector), both held by Global Infrastructure Investors III.
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Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Credit and Liquid Strategies | ||||||
Lending Partners III | $12,822 | $— | $12,822 | |||
Strategic Hedge Fund Partnerships and Other | 284,833 | 291,316 | (6,483) | |||
Total Realized Performance Income | $297,655 | $291,316 | $6,339 | |||
Realized performance income in our Credit and Liquid Strategies business line for the year ended December 31, 2025
consisted primarily of (i) performance fees earned from Marshall Wace and (ii) realized proceeds at Lending Partners III.
Realized performance income in our Credit and Liquid Strategies business line for the year ended December 31, 2024
consisted primarily of performance fees earned from Marshall Wace and our sub-advisory agreement with a UK investment
fund manager.
Realized Performance Income Compensation
The increase in realized performance income compensation for the year ended December 31, 2025 compared to the prior
period was primarily due to a higher level of compensation recorded in connection with the higher level of realized
performance income.
Realized Investment Income
The following table presents realized investment income from our Principal Activities business line:
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Total Realized Investment Income | $403,455 | $534,668 | $(131,213) | |||
The decrease in realized investment income is primarily due to a lower level of interest income and dividends partially
offset by a higher level of net realized gains. The amount of realized investment income depends on the transaction activity of
our funds and Asset Management segment balance sheet, which can vary from period to period.
For the year ended December 31, 2025, realized investment income was primarily comprised of (i) realized gains primarily
from the sale of our investments in BridgeBio Pharma, Inc., ReliaQuest, LLC, BrightSpring Health Services (fka Pharmerica)
(NASDAQ: BTSG), and Kokusai Electric Corporation, (ii) realized gains from the settlement of certain foreign exchange forward
contracts, and (iii) interest income primarily from our investments in CLOs. Partially offsetting the realized gains were realized
losses, the most significant of which were (i) a realized loss related to a structured multi-asset investment vehicle and (ii)
realized losses from the sale of various revolving credit facilities by the Capital Markets business line.
For the year ended December 31, 2024, realized investment income was primarily comprised of (i) interest income
primarily from our investments in CLOs and (ii) realized gains primarily from the sale of our investments in AppLovin
Corporation, Kokusai Electric Corporation, BridgeBio Pharma, Inc., and Darktrace Limited (LSE: DARK). Partially offsetting the
realized gains were realized losses, the most significant of which were (i) a realized loss on our alternative credit investment
Selecta Group HoldCo. (consumer products sector), (ii) realized losses from the sale of various revolving credit facilities, (iii) a
realized loss on our infrastructure investment, Indus Towers Limited (NSE: INDUSTOW), and (iv) a realized loss on our private
equity investment, Acteon Group Ltd. (energy sector).
Realized investment income includes the net income (loss) from KKR Capstone. For the year ended December 31, 2025,
total fees attributable to KKR Capstone were $113.6 million and total expenses attributable to KKR Capstone were $100.0
million. For KKR Capstone-related adjustments in reconciling segment revenues and expenses to GAAP revenues and expenses
"—See Note 21 “Segment Reporting” in the accompanying financial statements.
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As of the date of this filing, we have transactions that are pending or that have closed after December 31, 2025 that are
expected to result in realized performance income and realized investment income of at least $900 million, which are
expected to be realized in the first half of 2026. See “—Liquidity—Sources of Liquidity” for additional information. Some of
these transactions are not complete, and are subject to the satisfaction of closing conditions, including regulatory approvals;
therefore, there can be no assurance if or when such transactions will be completed. In addition, we may realize gains or
losses based on transactions or other events that occur after the date of filing this report, which could impact, positively or
negatively, the total amount of our realized performance income and realized investment income. Therefore, no assurance
can be given for what our actual realized performance income and realized investment income between the fourth quarter of
2025 and first half of 2026 or future periods will be.
Realized Investment Income Compensation
The decrease in realized investment income compensation for the year ended December 31, 2025 compared to the prior
period is primarily due to a lower level of compensation recorded in connection with the lower level of realized investment
income.
Operating and Capital Metrics
See also “Fund Performance Metrics” for more information about our investment funds, vehicles and accounts across our
Private Equity, Real Assets and Credit and Liquid Strategies business lines, including investment performance, capital
commitments, uncalled capital commitments, and invested capital of each. See also "Risk Factors" and "—Business
Environment" in this report for more information about the factors that may impact our business, financial performance,
operating results and valuations.
The following tables present our key asset management segment operating and capital metrics:
As of | ||||||
($ in millions) | December 31, 2025 | December 31, 2024 | Change | |||
Assets Under Management | $743,858 | $637,572 | $106,286 | |||
Fee Paying Assets Under Management | $604,144 | $511,963 | $92,181 | |||
Uncalled Commitments | $118,433 | $109,555 | $8,878 | |||
Years Ended | ||||||
($ in millions) | December 31, 2025 | December 31, 2024 | Change | |||
Capital Invested | $94,610 | $83,570 | $11,040 | |||
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Assets Under Management
Private Equity
The following table reflects the changes in the AUM of our Private Equity business line from December 31, 2024 to
December 31, 2025:
($ in millions) | |
December 31, 2024 | $195,358 |
New Capital Raised | 27,176 |
Acquisitions (1) | 3,214 |
Distributions and Other | (16,411) |
Redemptions | (105) |
Change in Value | 20,142 |
December 31, 2025 | $229,374 |
(1)Reflects the AUM of investment funds sponsored (or managed) by HealthCare Royalty Management, LLC at closing.
AUM of our Private Equity business line was $229.4 billion as of December 31, 2025, an increase of $34.0 billion,
compared to $195.4 billion as of December 31, 2024.
The increase was primarily attributable to (i) investment funds sponsored (or managed) by HealthCare Royalty
Management, LLC, which is an alternative asset management firm that we acquired on July 30, 2025, (ii) new capital raised
from North America Fund XIV and our private equity K-Series vehicles, and (iii) appreciation in investment value primarily
from Asian Fund IV, North America Fund XIII, our core private equity strategy and our private equity K-Series vehicles. Partially
offsetting the increases were (i) the release of capital commitments related to one of our strategic investor partnerships with
an insurance client, and (ii) distributions to fund investors primarily as a result of realized proceeds, most notably from Asian
Fund IV, Americas Fund XII and Asian Fund III.
For the year ended December 31, 2025, the value of our traditional private equity investment portfolio appreciated by
14%. This was comprised of a 16% increase in share prices of publicly held investments and a 14% increase in value of our
privately held investments. For the year ended December 31, 2025, the value of our growth equity investment portfolio
increased 13%, and the value of our core private equity investment portfolio increased 7%.
Real Assets
The following table reflects the changes in the AUM of our Real Assets business line from December 31, 2024 to
December 31, 2025:
($ in millions) | |
December 31, 2024 | $165,969 |
New Capital Raised | 33,739 |
Distributions and Other | (15,043) |
Redemptions | (302) |
Change in Value | 8,117 |
December 31, 2025 | $192,480 |
AUM of our Real Assets business line was $192.5 billion as of December 31, 2025, an increase of $26.5 billion, compared
to $166.0 billion as of December 31, 2024.
The increase was primarily attributable to (i) new capital raised from Global Atlantic inflows invested in real estate, our
infrastructure K-Series vehicles, and Global Infrastructure Investors V, and, to a lesser extent, (ii) appreciation in investment
value from Global Infrastructure Investors IV and the Diversified Core Infrastructure Fund. Partially offsetting the increase
were (i) payments to Global Atlantic policyholders and (ii) distributions to fund investors as a result of realized proceeds, most
notably from Global Infrastructure Investors III and one of our infrastructure separately managed accounts with a public
pension plan.
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For the year ended December 31, 2025, the value of our infrastructure investment portfolio appreciated 11% and the
value of our opportunistic real estate equity investment portfolio appreciated by 5%.
Credit and Liquid Strategies
The following table reflects the changes in the AUM of our Credit and Liquid Strategies business line from December 31,
2024 to December 31, 2025:
($ in millions) | |
December 31, 2024 | $276,245 |
New Capital Raised | 68,484 |
Distributions and Other | (25,633) |
Redemptions | (5,968) |
Change in Value | 8,876 |
December 31, 2025 | $322,004 |
AUM of our Credit and Liquid Strategies business line totaled $322.0 billion as of December 31, 2025, an increase of $45.8
billion, compared to AUM of $276.2 billion as of December 31, 2024.
The increase was primarily attributable to (i) new capital raised from Global Atlantic inflows and various private credit and
leveraged credit investment funds, (ii) the issuance of CLOs, and, to a lesser extent, (iii) investment value appreciation across
our leveraged credit and private credit investment funds, and on assets managed by Marshall Wace. Partially offsetting the
increase were (i) payments to Global Atlantic policyholders, (ii) distributions to, and redemptions from, fund investors at
certain private and leveraged credit funds, and (iii) redemptions at Marshall Wace.
Fee Paying Assets Under Management
Private Equity
The following table reflects the changes in the FPAUM of our Private Equity business line from December 31, 2024 to
December 31, 2025:
($ in millions) | |
December 31, 2024 | $119,598 |
New Capital Raised | 34,442 |
Acquisitions (1) | 3,214 |
Distributions and Other | (7,649) |
Redemptions | (105) |
Net Changes in Fee Base of Certain Funds | (1,281) |
Change in Value | 3,020 |
December 31, 2025 | $151,239 |
(1)Reflects the FPAUM of investment funds sponsored (or managed) by HealthCare Royalty Management, LLC at closing.
FPAUM of our Private Equity business line was $151.2 billion as of December 31, 2025, an increase of $31.6 billion,
compared to $119.6 billion as of December 31, 2024.
The increase was primarily attributable to (i) investment funds sponsored (or managed) by HealthCare Royalty
Management, LLC, (ii) management fees commencing at North America Fund XIV in the second quarter of 2025, and (iii) new
capital raised from our private equity K-Series vehicles, our core private equity strategy, and assets we manage and earn fees
from in our Strategic Holdings segment. Partially offsetting the increase were (i) a change in fee base for North America Fund
XIII as a result of the fund entering its post-investment period in the second quarter of 2025, during which we earn fees on
invested capital rather than committed capital, (ii) distributions to fund investors primarily as a result of realized proceeds,
most notably from Asian Fund III and Americas Fund XII and (iii) fees waived at North America Fund XI in exchange for
extending the term of the fund.
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Real Assets
The following table reflects the changes in the FPAUM of our Real Assets business line from December 31, 2024 to
December 31, 2025:
($ in millions) | |
December 31, 2024 | $139,681 |
New Capital Raised | 34,839 |
Distributions and Other | (11,668) |
Redemptions | (302) |
Net Changes in Fee Base of Certain Funds | (1,908) |
Change in Value | 2,809 |
December 31, 2025 | $163,451 |
FPAUM of our Real Assets business line was $163.5 billion as of December 31, 2025, an increase of $23.8 billion,
compared to $139.7 billion as of December 31, 2024.
The increase was primarily attributable to (i) new capital raised from Global Atlantic inflows invested in real estate, our
infrastructure K-Series vehicles, and Global Infrastructure Investors V, (ii) management fees commencing at Asia Pacific
Infrastructure III in the fourth quarter of 2025, and to a lesser extent, (iii) appreciation in investment value from the
Diversified Core Infrastructure Fund. Partially offsetting the increase were (i) a change in fee base for Asia Pacific
Infrastructure III in the fourth quarter of 2025, during which we earn fees on invested capital rather than committed capital,
(ii) payments to Global Atlantic policyholders, and (iii) distributions to fund investors as a result of realized proceeds, most
notably from one of our infrastructure separately managed accounts with a public pension plan and Global Infrastructure
Investors III.
Credit and Liquid Strategies
The following table reflects the changes in the FPAUM of our Credit and Liquid Strategies business line from December
31, 2024 to December 31, 2025:
($ in millions) | |
December 31, 2024 | $252,684 |
New Capital Raised | 60,107 |
Distributions and Other | (24,977) |
Redemptions | (5,968) |
Change in Value | 7,608 |
December 31, 2025 | $289,454 |
FPAUM of our Credit and Liquid Strategies business line was $289.5 billion as of December 31, 2025, an increase of
$36.8 billion, compared to $252.7 billion as of December 31, 2024.
The increase was primarily attributable to (i) new capital raised from Global Atlantic inflows and deployment at various
private credit and leveraged credit investment funds, (ii) the issuance of CLOs, and, to a lesser extent, (iii) investment value
appreciation on assets managed by Marshall Wace. Partially offsetting the increase were (i) payments to Global Atlantic
policyholders, (ii) distributions to, and redemptions from, fund investors at certain private and leveraged credit funds, and (iii)
redemptions at Marshall Wace.
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Uncalled Commitments
Private Equity
As of December 31, 2025, our Private Equity business line had $52.3 billion of remaining uncalled commitments that
could be called for investments in new transactions as compared to $54.9 billion as of December 31, 2024. The decrease was
primarily attributable to (i) the release of capital commitments related to one of our strategic investor partnerships with an
insurance client and (ii) capital called from fund investors to make investments, largely offset by new capital commitments
from fund investors during the period.
Real Assets
As of December 31, 2025, our Real Assets business line had $35.0 billion of remaining uncalled commitments that could
be called for investments in new transactions as compared to $33.3 billion as of December 31, 2024. The increase was
primarily attributable to new capital commitments from fund investors, which was partially offset by capital called from fund
investors to make investments during the period.
Credit and Liquid Strategies
As of December 31, 2025, our Credit and Liquid Strategies business line had $31.1 billion of remaining uncalled
commitments that could be called for investments in new transactions as compared to $21.4 billion as of December 31, 2024.
The increase was primarily attributable to new capital commitments from fund investors, which was partially offset by capital
called from fund investors to make investments during the period.
Capital Invested
Private Equity
For the year ended December 31, 2025, $24.1 billion of capital was invested by our Private Equity business line, as
compared to $17.1 billion for the year ended December 31, 2024. The increase was driven primarily by a $4.7 billion increase
in capital invested in our core private equity strategy and a $2.5 billion increase in capital invested in our traditional private
equity strategy. During the year ended December 31, 2025, 41% of capital deployed in private equity was in transactions in
North America, 39% was in Europe, and 20% was in the Asia-Pacific region. The number of large private equity investments
made in any quarterly or year-to-date period is volatile and, consequently, a significant amount of capital invested in one
period or a few periods may not be indicative of a similar level of capital deployment in future periods.
Real Assets
For the year ended December 31, 2025, $26.7 billion of capital was invested by our Real Assets business line, as
compared to $27.9 billion for the year ended December 31, 2024. The decrease was driven primarily by a $3.8 billion decrease
in capital invested in our real estate strategy, partially offset by (i) a $1.7 billion increase in capital invested in our
infrastructure strategy and (ii) a $0.8 billion increase in capital invested in our energy strategy. During the year ended
December 31, 2025, 53% of capital deployed in real assets was in transactions in North America, 22% was in Europe, and 25%
was in the Asia-Pacific region. The number of large real assets investments made in any quarterly or year-to-date period is
volatile and, consequently, a significant amount of capital invested in one period or a few periods may not be indicative of a
similar level of capital deployment in future periods.
Credit and Liquid Strategies
For the year ended December 31, 2025, $43.8 billion of capital was invested by our Credit and Liquid Strategies business
line, as compared to $38.6 billion for the year ended December 31, 2024. The increase was driven primarily by a higher level
of capital deployed across our private credit strategies, most notably direct lending. During the year ended December 31,
2025, 79% of capital deployed was in transactions in North America, 16% was in Europe, and 5% was in the Asia-Pacific region.
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Analysis of Insurance Segment Operating Results
The following table sets forth information regarding KKR's insurance segment operating results for the years ended
December 31, 2025 and 2024:
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Net Investment Income | $7,224,118 | $6,328,822 | $895,296 | |||
Net Cost of Insurance | (5,229,343) | (4,448,886) | (780,457) | |||
General, Administrative and Other | (885,380) | (865,390) | (19,990) | |||
Insurance Operating Earnings | $1,109,395 | $1,014,546 | $94,849 | |||
Net Investment Income
Net investment income increased for the year ended December 31, 2025, as compared to the year ended December 31,
2024, primarily due to (i) increased average assets under management from the cumulative impact of new business volume
growth, and (ii) higher average portfolio yields.
Net Cost of Insurance
Net cost of insurance increased for the year ended December 31, 2025, as compared to the year ended December 31,
2024, primarily due to (i) growth in reserves in the institutional and individual market channels as a result of the cumulative
impact of new business volumes in the current year, and (ii) higher average funding costs due to higher crediting rates and the
routine run-off of older business originated in a lower interest rate environment.
Net cost of insurance for the year ended December 31, 2025, also reflects a $40.1 million favorable impact from the
annual assumption review changes (as discussed above under —Consolidated Results of Operations (GAAP Basis)—Net Policy
Benefits and Claims) due to (i) higher expected yield assumptions for certain interest-sensitive life products, and (ii) favorable
expected surrender and persistency assumption changes for certain variable annuity and life insurance products offset in part
by (i) higher mortality rate assumptions for certain life insurance products, and (ii) higher surrender rate assumptions for
certain assumed annuity products.
General, Administrative and Other
General, administrative and other expenses increased for the year ended December 31, 2025, as compared to the year
ended December 31, 2024, primarily due to (i) an increase in cash compensation expenses, and (ii) higher interest expense
primarily reflecting higher levels of borrowing.
Insurance Operating Earnings
Insurance operating earnings increased for the year ended December 31, 2025, as compared to the year ended December
31, 2024, primarily due to an increase in net investment income due to an increase in average assets under management and
higher portfolio yields, and the favorable impact of the annual assumption review, partially offset by an increase in net cost of
insurance due to the cumulative impact of new business volume growth and higher crediting rates.
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Analysis of Strategic Holdings Segment Operating Results
The following table sets forth information regarding KKR's strategic holdings segment operating results for the years
ended December 31, 2025 and 2024:
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Dividends, Net | $162,096 | $76,211 | $85,885 | |||
Strategic Holdings Operating Earnings | 162,096 | 76,211 | 85,885 | |||
Net Realized Investment Income | 69,861 | 87,693 | (17,832) | |||
Strategic Holdings Segment Earnings | $231,957 | $163,904 | $68,053 | |||
Dividends, Net
For the year ended December 31, 2025, dividends, net were comprised of dividend income from 1-800 Contacts, Exact
Holding B.V., April S.A., Atlantic Aviation FBO Inc. (infrastructure: transportation sector) and ERM Worldwide Group Limited
(services sector). For the year ended December 31, 2024, dividends, net were comprised of dividend income from 1-800
Contacts Inc., Exact Holdings B.V., Viridor Limited (energy and energy transition sector), FiberCop S.p.A., Arnott's Biscuits
Limited (consumer products sector) and Atlantic Aviation FBO Inc. For the year ended December 31, 2025, the contractual
management fee charged by our Asset Management segment was $36.6 million and for the year ended December 31, 2024,
the management fee was $31.8 million.
Net Realized Investment Income
For the year ended December 31, 2025, net realized investment income was comprised of realized gains from the sale of
CyrusOne Inc. (infrastructure: telecommunications sector) and Refresco Group B.V. (manufacturing sector). For the year
ended December 31, 2024 net realized investment income was comprised of a realized gain from the sale of FiberCop S.p.A.
Realized investment income earned in our Strategic Holdings segment is reduced by a contractual performance fee charged by
our Asset Management segment. For the year ended December 31, 2025, the performance fee was $12.3 million and for the
year ended December 31, 2024, the performance fee was $15.5 million.
Strategic Holdings Segment Earnings
Strategic Holdings segment earnings for the year ended December 31, 2025, was higher compared to the prior period
primarily due to a higher level of dividends, partially offset by a lower level of net realized investment income.
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Analysis of Non-GAAP Performance Measures
The following is a discussion of our Non-GAAP performance measures for the years ended December 31, 2025 and 2024.
For a discussion comparing our Non-GAAP performance measures for the years ended December 31, 2024 and 2023, see "Part
II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on
Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025.
Years Ended | ||||||
($ in thousands) | December 31, 2025 | December 31, 2024 | Change | |||
Fee Related Earnings | $3,714,313 | $3,267,796 | $446,517 | |||
Insurance Operating Earnings | 1,109,395 | 1,014,546 | 94,849 | |||
Strategic Holdings Operating Earnings | 162,096 | 76,211 | 85,885 | |||
Total Operating Earnings | 4,985,804 | 4,358,553 | 627,251 | |||
Net Realized Performance Income | 491,736 | 608,788 | (117,052) | |||
Net Realized Investment Income | 412,796 | 542,163 | (129,367) | |||
Total Investing Earnings | 904,532 | 1,150,951 | (246,419) | |||
Total Segment Earnings | 5,890,336 | 5,509,504 | 380,832 | |||
Interest Expense, Net and Other | (404,800) | (318,441) | (86,359) | |||
Income Taxes on Adjusted Earnings | (1,108,064) | (988,797) | (119,267) | |||
Adjusted Net Income | $4,377,472 | $4,202,266 | $175,206 | |||
Total Operating Earnings
The increase in total operating earnings for the year ended December 31, 2025 compared to the prior period was
primarily due to a higher level of fee related earnings and to a lesser extent insurance operating earnings and strategic
holdings operating earnings. For a discussion of fee related earnings, insurance operating earnings, and strategic holdings
operating earnings, see "—Analysis of Asset Management Segment Operating Results", "—Analysis of Insurance Segment
Operating Results", and "—Analysis of Strategic Holdings Segment Operating Results."
Total Investing Earnings
The decrease in total investing earnings for the year ended December 31, 2025 compared to the prior period was
primarily due to (i) a lower level of net realized investment income and (ii) a lower level of net realized performance income
due to the reduction in realized performance income for the repayment of the Asian Fund II clawback obligation in the fourth
quarter of 2025. For a discussion of net realized performance income and net realized investment income, see "—Analysis of
Asset Management Segment Operating Results" and "—Analysis of Strategic Holdings Segment Operating Results."
Total Segment Earnings
The increase in total segment earnings for the year ended December 31, 2025 compared to the prior period was primarily
due to an increase in total operating earnings, offset by a decrease in total investing earnings.
Adjusted Net Income
The increase in adjusted net income for the year ended December 31, 2025 compared to the prior period was primarily
due to a higher level of total segment earnings, partially offset by an increase in income taxes on adjusted earnings and
interest expense, net and other.
Interest Expense, Net and Other
The increase in interest expense, net and other for the year ended December 31, 2025 compared to the prior period was
primarily due to dividends paid on the Series D Mandatory Convertible Preferred Stock that was issued in the first quarter of
2025.
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Income Taxes on Adjusted Earnings
The increase in income taxes on adjusted earnings for the year ended December 31, 2025 compared to the prior period
was primarily due to a higher level of total segment earnings.
For the years ended December 31, 2025 and 2024, the amount of the tax benefit from equity-based compensation
included in income taxes on adjusted earnings was $124.4 million and $126.7 million, respectively. The inclusion of the tax
benefit from equity-based compensation in Adjusted Net Income had the effect of increasing this measure by 3% for both the
years ended December 31, 2025 and 2024.
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Fund Performance Metrics
Private Equity
The table below presents information as of December 31, 2025, relating to our current private equity and other
investment vehicles reported in our Private Equity business line for which we have the ability to earn carried interest. This
data does not reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after
December 31, 2025.
Investment Period | Amount ($ in millions) | |||||||||
Start Date(1) | End Date (2) | Commitment (3) | Uncalled Commitments | Invested | Realized | Remaining Cost (4) | Remaining Fair Value | Gross Accrued Carried Interest | ||
Private Equity Business Line | ||||||||||
North America Fund XIV | 4/2025 | 4/2031 | $19,375 | $19,375 | $— | $— | $— | $— | $— | |
North America Fund XIII | 8/2021 | 4/2025 | 18,400 | 1,438 | 17,265 | 353 | 16,817 | 23,888 | 1,109 | |
Americas Fund XII | 5/2017 | 5/2021 | 13,500 | 1,364 | 12,773 | 16,281 | 8,626 | 18,431 | 1,661 | |
North America Fund XI | 11/2012 | 1/2017 | 8,718 | 48 | 10,203 | 23,541 | 1,861 | 3,196 | 258 | |
2006 Fund (5) | 9/2006 | 9/2012 | 17,642 | — | 17,309 | 37,423 | — | — | — | |
Millennium Fund (5) | 12/2002 | 12/2008 | 6,000 | — | 6,000 | 14,129 | — | — | — | |
Ascendant Fund | 6/2022 | 6/2028 | 4,328 | 2,672 | 1,656 | — | 1,656 | 1,988 | 32 | |
European Fund VI | 6/2022 | 6/2028 | 7,549 | 2,568 | 4,981 | — | 4,045 | 5,298 | — | |
European Fund V | 7/2019 | 2/2022 | 6,384 | 524 | 5,982 | 2,909 | 4,539 | 6,901 | 431 | |
European Fund IV | 2/2015 | 3/2019 | 3,513 | 17 | 3,648 | 5,726 | 1,621 | 2,339 | 122 | |
European Fund III (5) | 3/2008 | 3/2014 | 5,506 | — | 5,360 | 10,647 | — | — | — | |
European Fund II (5) | 11/2005 | 10/2008 | 5,751 | — | 5,751 | 8,533 | — | — | — | |
Asian Fund IV | 7/2020 | 7/2026 | 14,735 | 5,010 | 10,900 | 3,948 | 10,006 | 14,702 | 873 | |
Asian Fund III | 8/2017 | 7/2020 | 9,000 | 1,267 | 8,269 | 10,200 | 5,202 | 9,947 | 996 | |
Asian Fund II | 10/2013 | 3/2017 | 5,825 | — | 7,507 | 6,723 | 1,269 | 772 | — | |
Asian Fund (5) | 7/2007 | 4/2013 | 3,983 | — | 3,974 | 8,728 | — | — | — | |
Next Generation Technology Growth Fund III | 11/2022 | 11/2028 | 2,740 | 734 | 2,006 | — | 2,006 | 2,297 | 1 | |
Next Generation Technology Growth Fund II | 12/2019 | 5/2022 | 2,088 | 54 | 2,269 | 1,846 | 1,610 | 2,477 | 153 | |
Next Generation Technology Growth Fund | 3/2016 | 12/2019 | 659 | 3 | 671 | 1,314 | 241 | 806 | 59 | |
Health Care Strategic Growth Fund II | 5/2021 | 5/2027 | 3,789 | 1,657 | 2,132 | — | 2,132 | 3,022 | 111 | |
Health Care Strategic Growth Fund | 12/2016 | 4/2021 | 1,331 | 98 | 1,397 | 1,021 | 991 | 1,737 | 133 | |
Global Impact Fund II | 6/2022 | 6/2028 | 2,715 | 1,379 | 1,337 | — | 1,006 | 1,382 | — | |
Global Impact Fund | 2/2019 | 3/2022 | 1,242 | 213 | 1,212 | 646 | 950 | 1,479 | 102 | |
Co-Investment Vehicles and Other | Various | Various | 41,346 | 3,291 | 38,772 | 17,793 | 27,088 | 35,506 | 1,763 | |
Core Investors II | 8/2022 | 8/2027 | 11,814 | 7,957 | 3,858 | 108 | 3,858 | 4,836 | 24 | |
Core Investors I | 2/2018 | 8/2022 | 8,500 | 23 | 10,489 | 2,627 | 8,775 | 17,911 | 91 | |
Other Core Vehicles | Various | Various | 7,628 | 1,178 | 6,525 | 2,229 | 5,787 | 9,237 | 29 | |
Unallocated Commitments (6) | N/A | N/A | 1,407 | 1,407 | — | — | — | — | — | |
Total Private Equity | $235,468 | $52,277 | $192,246 | $176,725 | $110,086 | $168,152 | $7,948 | |||
(1)The start date represents the start of the fund's investment period as defined in the fund's governing documents and may or may not be the same as the
date upon which management fees begin to accrue.
(2)The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which
management fees cease to accrue. For funds that initially charge management fees on the basis of committed capital, the end date is generally the date
on or after which the management fees begin to be calculated instead on the basis of invested capital and may, for certain funds, begin to be calculated
using a lower rate.
(3)The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general
partner. Foreign currency commitments have been converted into U.S. dollars based on the exchange rate that prevailed on December 31, 2025.
(4)The remaining cost represents the initial investment of the general partner and limited partners, reduced for returns of capital.
(5)The "Invested" and "Realized" columns do not include the amounts of any realized investments that restored the unused capital commitments of the fund
investors, if any.
(6)"Unallocated Commitments" represent commitments received from our strategic investor partnerships that have yet to be allocated to a particular
investment strategy.
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Real Assets
The table below presents information as of December 31, 2025, relating to our current real asset and other investment
vehicles reported in our Real Assets business line for which we have the ability to earn carried interest. This data does not
reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after December 31,
2025.
Investment Period | Amount ($ in millions) | |||||||||
Start Date (1) | End Date (2) | Commitment (3) | Uncalled Commitments | Invested | Realized | Remaining Cost (4) | Remaining Fair Value | Gross Accrued Carried Interest | ||
Real Assets Business Line | ||||||||||
Global Infrastructure Investors V | 7/2024 | 7/2030 | $15,732 | $12,051 | $3,794 | $113 | $3,794 | $3,912 | $— | |
Global Infrastructure Investors IV | 8/2021 | 6/2024 | 16,615 | 1,739 | 15,247 | 1,681 | 14,536 | 19,468 | 997 | |
Global Infrastructure Investors III | 7/2018 | 6/2021 | 7,174 | 862 | 6,678 | 5,798 | 3,331 | 4,573 | 183 | |
Global Infrastructure Investors II | 12/2014 | 6/2018 | 3,040 | 133 | 3,167 | 5,757 | 560 | 977 | 50 | |
Global Infrastructure Investors | 9/2010 | 10/2014 | 1,040 | — | 1,050 | 2,228 | — | — | — | |
Asia Pacific Infrastructure Investors III | 12/2025 | 12/2031 | 3,548 | 3,548 | — | — | — | — | — | |
Asia Pacific Infrastructure Investors II | 9/2022 | 9/2028 | 6,348 | 3,314 | 3,436 | 770 | 2,761 | 4,049 | 238 | |
Asia Pacific Infrastructure Investors | 1/2020 | 9/2022 | 3,792 | 593 | 3,561 | 2,279 | 2,216 | 3,069 | 192 | |
Diversified Core Infrastructure Fund | 12/2020 | (5) | 12,921 | 1,186 | 12,022 | 1,552 | 11,943 | 13,217 | — | |
Global Climate Transition Fund(6) | 7/2024 | 7/2030 | 3,053 | 3,053 | — | — | — | — | — | |
Real Estate Partners Americas IV | 11/2024 | 11/2028 | 2,196 | 2,196 | — | — | — | — | — | |
Real Estate Partners Americas III | 1/2021 | 9/2024 | 4,253 | 530 | 3,958 | 348 | 3,709 | 4,216 | — | |
Real Estate Partners Americas II | 5/2017 | 12/2020 | 1,921 | 117 | 1,986 | 2,871 | 265 | 254 | (3) | |
Real Estate Partners Americas | 5/2013 | 5/2017 | 1,229 | 15 | 1,024 | 1,445 | — | — | (4) | |
Real Estate Partners Europe II | 3/2020 | 12/2023 | 2,067 | 254 | 2,019 | 569 | 1,676 | 1,602 | — | |
Real Estate Partners Europe | 8/2015 | 12/2019 | 710 | 100 | 694 | 806 | 173 | 125 | (18) | |
Asia Real Estate Partners | 7/2019 | 7/2023 | 1,682 | 357 | 1,371 | 559 | 994 | 991 | — | |
Property Partners Americas | 12/2019 | (5) | 2,571 | 46 | 2,525 | 159 | 2,525 | 2,296 | — | |
Real Estate Credit Opportunity Partners II | 8/2019 | 6/2023 | 950 | — | 976 | 469 | 853 | 869 | 28 | |
Real Estate Credit Opportunity Partners | 2/2017 | 4/2019 | 1,130 | 122 | 1,008 | 677 | 965 | 1,001 | 5 | |
Energy Related Vehicles | Various | Various | 4,357 | 62 | 4,493 | 2,505 | 1,000 | 1,428 | 44 | |
Co-Investment Vehicles and Other | Various | Various | 19,098 | 2,471 | 16,682 | 3,876 | 14,895 | 16,078 | 105 | |
Unallocated Commitments(7) | N/A | N/A | 1,389 | 1,389 | — | — | — | — | — | |
Total Real Assets | $116,816 | $34,138 | $85,691 | $34,462 | $66,196 | $78,125 | $1,817 | |||
(1)The start date represents the start of the fund's investment period as defined in the fund's governing documents and may or may not be the same as the
date upon which management fees begin to accrue.
(2)The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which
management fees cease to accrue. For funds that initially charge management fees on the basis of committed capital, the end date is generally the date
on or after which the management fees begin to be calculated instead on the basis of invested capital and may, for certain funds, begin to be calculated
using a lower rate.
(3)The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general
partner. Foreign currency commitments have been converted into U.S. dollars based on the exchange rate that prevailed on December 31, 2025.
(4)The remaining cost represents the initial investment of the general partner and limited partners, reduced for returns of capital.
(5)Open-ended fund.
(6)Includes an Asia-focused vehicle with different fund terms.
(7)"Unallocated Commitments" represent commitments received from our strategic investor partnerships that have yet to be allocated to a particular
investment strategy.
Private Equity and Real Asset Performance
The table below presents information as of December 31, 2025, relating to the historical performance of certain of our
Private Equity and Real Assets investment vehicles since inception, which we believe illustrates the benefits of our investment
approach. This data does not reflect additional capital raised since December 31, 2025, or acquisitions or disposals of
investments, changes in investment values, or distributions occurring after that date. The information presented below is not
intended to be representative of any past or future performance for any particular period other than the period presented
below. Past performance is no guarantee of future results.
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Private Equity and Real Assets Business Lines Investment Funds and Other Vehicles | Commitment (2) | Invested | Realized (4) | Unrealized | Total Value | Gross IRR (5) | Net IRR (5) | Gross Multiple of Invested Capital (5) | |||
($ in millions) | |||||||||||
Total Investments | |||||||||||
Legacy Funds (1) | |||||||||||
1976 Fund | $31 | $31 | $537 | $— | $537 | 39.5% | 35.5% | 17.1 | |||
1980 Fund | 357 | 357 | 1,828 | — | 1,828 | 29.0% | 25.8% | 5.1 | |||
1982 Fund | 328 | 328 | 1,291 | — | 1,291 | 48.1% | 39.2% | 3.9 | |||
1984 Fund | 1,000 | 1,000 | 5,964 | — | 5,964 | 34.5% | 28.9% | 6.0 | |||
1986 Fund | 672 | 672 | 9,081 | — | 9,081 | 34.4% | 28.9% | 13.5 | |||
1987 Fund | 6,130 | 6,130 | 14,949 | — | 14,949 | 12.1% | 8.9% | 2.4 | |||
1993 Fund | 1,946 | 1,946 | 4,143 | — | 4,143 | 23.6% | 16.8% | 2.1 | |||
1996 Fund | 6,012 | 6,012 | 12,477 | — | 12,477 | 18.0% | 13.3% | 2.1 | |||
Subtotal - Legacy Funds | 16,475 | 16,475 | 50,269 | — | 50,269 | 26.1% | 19.9% | 3.1 | |||
Included Funds | |||||||||||
European Fund (1999) | 3,085 | 3,085 | 8,758 | — | 8,758 | 26.9% | 20.2% | 2.8 | |||
Millennium Fund (2002) | 6,000 | 6,000 | 14,129 | — | 14,129 | 22.0% | 16.1% | 2.4 | |||
European Fund II (2005) | 5,751 | 5,751 | 8,533 | — | 8,533 | 6.1% | 4.5% | 1.5 | |||
2006 Fund (2006) | 17,642 | 17,309 | 37,423 | — | 37,423 | 11.9% | 9.3% | 2.2 | |||
Asian Fund (2007) | 3,983 | 3,974 | 8,728 | — | 8,728 | 18.9% | 13.7% | 2.2 | |||
European Fund III (2008) | 5,506 | 5,360 | 10,647 | — | 10,647 | 16.4% | 11.2% | 2.0 | |||
E2 Investors (Annex Fund) (2009) | 196 | 196 | 200 | — | 200 | 0.6% | 0.5% | 1.0 | |||
China Growth Fund (2010) | 1,010 | 1,010 | 1,166 | — | 1,166 | 3.7% | —% | 1.2 | |||
Natural Resources Fund (2010) | 887 | 887 | 168 | — | 168 | (24.3)% | (25.9)% | 0.2 | |||
Global Infrastructure Investors (2010) | 1,040 | 1,050 | 2,228 | — | 2,228 | 17.6% | 15.6% | 2.1 | |||
North America Fund XI (2012) | 8,718 | 10,203 | 23,541 | 3,196 | 26,737 | 23.4% | 18.8% | 2.6 | |||
Asian Fund II (2013) | 5,825 | 7,507 | 6,723 | 772 | 7,495 | (0.1)% | (1.5)% | 1.0 | |||
Real Estate Partners Americas (2013) | 1,229 | 1,024 | 1,445 | — | 1,445 | 15.8% | 10.9% | 1.4 | |||
Energy Income and Growth Fund (2013) | 1,589 | 1,589 | 1,221 | — | 1,221 | (6.2)% | (8.6)% | 0.8 | |||
Global Infrastructure Investors II (2014) | 3,040 | 3,167 | 5,757 | 977 | 6,734 | 19.3% | 16.7% | 2.1 | |||
European Fund IV (2015) | 3,513 | 3,648 | 5,726 | 2,339 | 8,065 | 21.0% | 16.0% | 2.2 | |||
Real Estate Partners Europe (2015) | 710 | 694 | 806 | 125 | 931 | 9.9% | 7.1% | 1.3 | |||
Next Generation Technology Growth Fund (2016) | 659 | 671 | 1,314 | 806 | 2,120 | 27.6% | 23.4% | 3.2 | |||
Health Care Strategic Growth Fund (2016) | 1,331 | 1,397 | 1,021 | 1,737 | 2,758 | 17.7% | 12.8% | 2.0 | |||
Americas Fund XII (2017) | 13,500 | 12,773 | 16,281 | 18,431 | 34,712 | 23.9% | 19.9% | 2.7 | |||
Real Estate Credit Opportunity Partners (2017) | 1,130 | 1,008 | 677 | 1,001 | 1,678 | 9.1% | 7.8% | 1.7 | |||
Core Investors I (2018) | 8,500 | 10,489 | 2,627 | 17,911 | 20,538 | 15.4% | 13.3% | 2.0 | |||
Asian Fund III (2017) | 9,000 | 8,269 | 10,200 | 9,947 | 20,147 | 24.1% | 18.8% | 2.4 | |||
Real Estate Partners Americas II (2017) | 1,921 | 1,986 | 2,871 | 254 | 3,125 | 23.7% | 19.1% | 1.6 | |||
Global Infrastructure Investors III (2018) | 7,174 | 6,678 | 5,798 | 4,573 | 10,371 | 12.2% | 9.6% | 1.6 | |||
Global Impact Fund (2019) | 1,242 | 1,212 | 646 | 1,479 | 2,125 | 16.2% | 11.8% | 1.8 | |||
European Fund V (2019) | 6,384 | 5,982 | 2,909 | 6,901 | 9,810 | 13.5% | 10.7% | 1.6 | |||
Energy Income and Growth Fund II (2018) | 994 | 1,199 | 651 | 1,259 | 1,910 | 12.1% | 10.6% | 1.6 | |||
Asia Real Estate Partners (2019) | 1,682 | 1,371 | 559 | 991 | 1,550 | 4.5% | 1.4% | 1.1 | |||
Next Generation Technology Growth Fund II (2019) | 2,088 | 2,269 | 1,846 | 2,477 | 4,323 | 19.5% | 15.4% | 1.9 | |||
Real Estate Credit Opportunity Partners II (2019) | 950 | 976 | 469 | 869 | 1,338 | 10.0% | 7.7% | 1.4 | |||
Asia Pacific Infrastructure Investors (2020) | 3,792 | 3,561 | 2,279 | 3,069 | 5,348 | 16.0% | 11.9% | 1.5 | |||
Asian Fund IV (2020) | 14,735 | 10,900 | 3,948 | 14,702 | 18,650 | 23.7% | 17.7% | 1.7 | |||
Real Estate Partners Europe II (2020) | 2,067 | 2,019 | 569 | 1,602 | 2,171 | 2.7% | 0.5% | 1.1 | |||
Real Estate Partners Americas III (2021) | 4,253 | 3,958 | 348 | 4,216 | 4,564 | 5.3% | 3.5% | 1.2 | |||
Health Care Strategic Growth Fund II (2021) | 3,789 | 2,132 | — | 3,022 | 3,022 | 20.2% | 11.6% | 1.4 | |||
North America Fund XIII (2021) | 18,400 | 17,265 | 353 | 23,888 | 24,241 | 17.3% | 13.1% | 1.4 | |||
Core Investors II (2022) | 11,814 | 3,858 | 108 | 4,836 | 4,944 | 13.0% | 11.4% | 1.3 | |||
Global Infrastructure Investors IV (2021) | 16,615 | 15,247 | 1,681 | 19,468 | 21,149 | 14.7% | 11.4% | 1.4 | |||
Asia Pacific Infrastructure Investors II (2022) | 6,348 | 3,436 | 770 | 4,049 | 4,819 | 31.5% | 22.4% | 1.4 | |||
Ascendant Fund (2022) | 4,328 | 1,656 | — | 1,988 | 1,988 | 21.0% | 9.2% | 1.2 | |||
Next Generation Technology Growth Fund III (2022) | 2,740 | 2,006 | — | 2,297 | 2,297 | 13.9% | 6.0% | 1.1 | |||
European Fund VI (2022) | 7,549 | 4,981 | — | 5,298 | 5,298 | 4.7% | 0.7% | 1.1 | |||
Global Impact Fund II (2022) | 2,715 | 1,337 | — | 1,382 | 1,382 | 2.4% | (4.4)% | 1.0 | |||
Global Infrastructure Investors V (2024) (3) | 15,732 | 3,794 | 113 | 3,912 | 4,025 | — | — | — | |||
Global Climate Transition Fund (2024) (3) | 3,053 | — | — | — | — | — | — | — | |||
Real Estate Partners Americas IV (2024) (3) | 2,196 | — | — | — | — | — | — | — | |||
North America Fund XIV (2025)(3) | 19,375 | — | — | — | — | — | — | — | |||
Asia Pacific Infrastructure Investors III (2025)(3) | 3,548 | — | — | — | — | — | — | — | |||
Subtotal - Included Funds | 269,328 | 204,884 | 195,237 | 169,774 | 365,011 | 15.9% | 12.2% | 1.8 | |||
All Funds | $285,803 | $221,359 | $245,506 | $169,774 | $415,280 | 25.5% | 18.6% | 1.9 | |||
(1)These funds were not contributed to KKR as part of the acquisition of the assets and liabilities of KKR & Co. (Guernsey) L.P. (formerly known as KKR Private
Equity Investors, L.P.) on October 1, 2009.
(2)Where commitments are not U.S. dollar-denominated, such amounts have been converted into U.S. dollars based on the exchange rate prevailing on
December 31, 2025.
(3)The gross IRR, net IRR and gross multiple of invested capital are calculated for our investment funds that made their first investment at least 24 months
prior to December 31, 2025. We therefore have not calculated gross IRRs, net IRRs and gross multiples of invested capital with respect to these funds.
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(4)An investment is considered realized when it has been disposed of or has otherwise generated disposition proceeds or current income that has been
distributed by the relevant fund.
(5)IRRs measure the aggregate annual compounded returns generated by a fund's investments over a holding period. Net IRRs are calculated after giving
effect to the allocation of realized and unrealized carried interest and the payment of any applicable management fees and organizational expenses.
Gross IRRs are calculated before giving effect to the allocation of realized and unrealized carried interest and the payment of any applicable management
fees and organizational expenses.
The gross multiples of invested capital measure the aggregate value generated by a fund's investments in absolute terms. Each multiple of invested capital
is calculated by adding together the total realized and unrealized values of a fund's investments and dividing by the total amount of capital invested by the
fund. Such amounts do not give effect to the allocation of realized and unrealized carried interest or the payment of any applicable management fees or
organizational expenses.
KKR's Private Equity and Real Assets funds may utilize third-party financing facilities to provide liquidity to such funds. The above net and gross IRRs are
calculated from the time capital contributions are due from fund investors to the time fund investors receive a related distribution from the fund, and the
use of such financing facilities generally decreases the amount of time that would otherwise be used to calculate IRRs, which tends to increase IRRs when
fair value grows over time and decrease IRRs when fair value decreases over time.
For more information, see "Risk Factors—Risks Related to Our Investment Activities—Future results of our investments
may be different than, and may not achieve the levels of, any of our historical returns" in this report.
Credit and Liquid Strategies
The table below presents information as of December 31, 2025, relating to our current credit investment vehicles
reported in our Credit and Liquid Strategies business line for which we have the ability to earn carried interest. This data does
not reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after December
31, 2025.
Investment Period | Amount ($ in millions) | |||||||||
Start Date (1) | End Date (2) | Commitment (3) | Uncalled Commitments | Invested | Realized | Remaining Cost (4) | Remaining Fair Value | Gross Accrued Carried Interest | ||
Line | ||||||||||
Opportunities Fund II | 11/2021 | 1/2026 | $2,420 | $897 | $1,523 | $96 | $1,523 | $1,851 | $49 | |
Dislocation Opportunities Fund | 8/2019 | 11/2021 | 2,967 | 278 | 2,689 | 1,997 | 1,305 | 1,411 | 80 | |
Special Situations Fund II | 2/2015 | 3/2019 | 3,525 | 284 | 3,241 | 2,651 | 615 | 658 | — | |
Special Situations Fund | 1/2013 | 1/2016 | 2,274 | 1 | 2,273 | 1,899 | 94 | 139 | — | |
Mezzanine Partners | 7/2010 | 3/2015 | 1,023 | 33 | 990 | 1,166 | 184 | 23 | — | |
Asset-Based Finance Partners II | 3/2024 | 3/2028 | 5,571 | 4,420 | 1,151 | — | 1,151 | 1,194 | 1 | |
Asset-Based Finance Partners | 10/2020 | 7/2025 | 2,059 | 426 | 1,633 | 341 | 1,557 | 1,681 | 77 | |
Private Credit Opportunities Partners II | 12/2015 | 12/2020 | 2,245 | 188 | 2,057 | 1,090 | 1,264 | 1,137 | — | |
Lending Partners IV | 3/2022 | 9/2026 | 1,150 | 173 | 977 | 178 | 977 | 1,015 | 14 | |
Lending Partners III | 4/2017 | 11/2021 | 1,498 | 540 | 958 | 1,240 | 390 | 366 | 34 | |
Lending Partners II | 6/2014 | 6/2017 | 1,336 | 157 | 1,179 | 1,261 | 71 | 18 | — | |
Lending Partners | 12/2011 | 12/2014 | 460 | 40 | 420 | 458 | 23 | 8 | — | |
Lending Partners Europe II | 5/2019 | 9/2023 | 837 | 164 | 672 | 766 | 212 | 240 | 9 | |
Lending Partners Europe | 3/2015 | 3/2019 | 848 | 184 | 662 | 626 | 66 | 55 | — | |
Asia Credit Opportunities II | 2/2025 | 12/2028 | 1,795 | 1,795 | — | — | — | — | — | |
Asia Credit Opportunities | 1/2021 | 5/2025 | 1,084 | 243 | 841 | 245 | 708 | 892 | 40 | |
Other Alternative Credit Vehicles | Various | Various | 18,363 | 7,797 | 10,607 | 7,188 | 5,608 | 7,069 | (4) | |
Total Credit and Liquid Strategies | $49,455 | $17,620 | $31,873 | $21,202 | $15,748 | $17,757 | $300 | |||
(1)The start date represents the start of the fund's investment period as defined in the fund's governing documents and may or may not be the same as the
date upon which management fees begin to accrue.
(2)The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which
management fees cease to accrue. For funds that initially charge management fees on the basis of committed capital, the end date is generally the date
on or after which the management fees begin to be calculated instead on the basis of invested capital and may, for certain funds, begin to be calculated
using a lower rate.
(3)The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general
partner. Foreign currency commitments have been converted into U.S. dollars based on the foreign exchange rate that prevailed on December 31, 2025.
(4)The remaining cost represents the initial investment of the general partner and limited partners, reduced for returns of capital.
The following table presents information regarding certain leveraged credit strategies managed by KKR from inception to
December 31, 2025. The information presented below is not intended to be representative of any past or future performance
for any particular period other than the period presented below. Past performance is no guarantee of any future result.
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Leveraged Credit Strategy | Inception Date | Gross Returns | Net Returns | Benchmark (1) | Benchmark Gross Returns | |||||
Multi-Asset Credit Composite | Jul 2008 | 7.18% | 6.49% | 50% S&P/LSTA Loan Index, 50% BoAML HY Master II Index (2) | 5.89% | |||||
Opportunistic Credit (3) | May 2008 | 10.36% | 8.87% | 50% S&P/LSTA Loan Index, 50% BoAML HY Master II Index (3) | 6.06% | |||||
Bank Loans | Apr 2011 | 5.89% | 5.32% | S&P/LSTA Loan Index (4) | 4.93% | |||||
High-Yield | Apr 2011 | 6.34% | 5.76% | BoAML HY Master II Index (5) | 5.74% | |||||
European Leveraged Loans (6) | Sep 2009 | 4.95% | 4.43% | CS Inst West European Leveraged Loan Index (7) | 4.05% | |||||
European Credit Opportunities (6) | Sept 2007 | 6.84% | 5.61% | S&P European Leveraged Loans (All Loans) (8) | 4.50% |
(1)The benchmarks referred to herein include the S&P/LSTA Leveraged Loan Index (the "S&P/LSTA Loan Index"), S&P/LSTA U.S. B/BB Ratings Loan Index (the
"S&P/LSTA BB-B Loan Index"), the Bank of America Merrill Lynch High Yield Master II Index (the "BoAML HY Master II Index"), the BofA Merrill Lynch BB-B
US High Yield Index (the "BoAML HY BB-B Constrained"), the Credit Suisse Institutional Western European Leveraged Loan Index (the "CS Inst West
European Leveraged Loan Index"), and S&P European Leveraged Loans (All Loans). The S&P/LSTA Loan Index is a daily tradable index for the U.S. loan
market that seeks to mirror the market-weighted performance of the largest institutional loans that meet certain criteria. The BoAML HY Master II Index is
an index for high-yield corporate bonds. It is designed to measure the broad high-yield market, including lower-rated securities. The CS Inst West
European Leveraged Loan Index contains only institutional loan facilities priced above 90, excluding TL and TLa facilities and loans rated CC, C or are in
default. The S&P European Leveraged Loan Index reflects the market-weighted performance of institutional leveraged loan portfolios investing in
European credits. While the returns of our leveraged credit strategies reflect the reinvestment of income and dividends, none of the indices presented in
the chart above reflect such reinvestment, which has the effect of increasing the reported relative performance of these strategies as compared to the
indices. Furthermore, these indices are not subject to management fees, incentive allocations, or expenses.
(2)Performance is based on a blended composite of Bank Loans, High Yield, and Structured Credit strategy accounts. The benchmark used for purposes of
comparison for the Multi-Asset Credit Composite strategy is based on 65% S&P/LSTA Loan Index and 35% BoAML HY Master II Index to May 2022, and
50% S&P/LSTA Loan Index, 50% BoAML HY Master II Index, from June 2022.
(3)The Opportunistic Credit strategy invests in high-yield securities and corporate loans with no preset allocation. The benchmark used for purposes of
comparison for the Opportunistic Credit strategy presented herein is based on 50% S&P/LSTA Loan Index and 50% BoAML HY Master II Index. Funds
within this strategy may utilize third-party financing facilities to enhance investment returns. In cases where financing facilities are used, the amounts
drawn on the facility are deducted from the assets of the fund in the calculation of net asset value, which tends to increase returns when net asset value
grows over time and decrease returns when net asset value decreases over time.
(4)Performance is based on a composite of portfolios that primarily invest in leveraged loans. The benchmark used for purposes of comparison for the Bank
Loans strategy is based on the S&P/LSTA Loan Index.
(5)Performance is based on a composite of portfolios that primarily invest in high-yield securities. The benchmark used for purposes of comparison for the
High Yield strategy is based on the BoAML HY Master II Index.
(6)The returns presented are calculated based on local currency.
(7)Performance is based on a composite of portfolios that primarily invest in higher quality leveraged loans. The benchmark used for purposes of comparison
for the European Leveraged Loans strategy is based on the CS Inst West European Leveraged Loan Index.
(8)Performance is based on a composite of portfolios that primarily invest in European institutional leveraged loans. The benchmark used for purposes of
comparison for the European Credit Opportunities strategy is based on the S&P European Leveraged Loans (All Loans) Index.
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The following table presents information regarding our alternative credit investment funds where investors have capital
commitments from inception to December 31, 2025. The information presented below is not intended to be representative of
any past or future performance for any particular period other than the period presented below. Past performance is no
guarantee of any future result.
Credit and Liquid Strategies Investment Funds | Investment Period Start Date | Commitment | Invested (1) | Realized (1) | Unrealized | Total Value | Gross IRR (2) | Net IRR (2) | Multiple of Invested Capital (3) | |||||||||
($ in millions) | ||||||||||||||||||
Opportunities Fund II | Nov 2021 | $2,420 | $1,523 | $96 | $1,851 | $1,947 | 17.4% | 13.3% | 1.3 | |||||||||
Dislocation Opportunities Fund | Aug 2019 | 2,967 | 2,689 | 1,997 | 1,411 | 3,408 | 9.1% | 7.1% | 1.3 | |||||||||
Special Situations Fund II | Feb 2015 | 3,525 | 3,241 | 2,651 | 658 | 3,309 | 0.5% | (1.3)% | 1.0 | |||||||||
Special Situations Fund | Jan 2013 | 2,274 | 2,273 | 1,899 | 139 | 2,038 | (2.3)% | (4.1)% | 0.9 | |||||||||
Mezzanine Partners | July 2010 | 1,023 | 990 | 1,166 | 23 | 1,189 | 6.5% | 2.7% | 1.2 | |||||||||
Asset-Based Finance Partners II | Mar 2024 | 5,571 | 1,151 | — | 1,194 | 1,194 | N/A | N/A | N/A | |||||||||
Asset-Based Finance Partners | Oct 2020 | 2,059 | 1,633 | 341 | 1,681 | 2,022 | 14.4% | 10.8% | 1.2 | |||||||||
Private Credit Opportunities Partners II | Dec 2015 | 2,245 | 2,057 | 1,090 | 1,137 | 2,227 | 1.9% | 0.1% | 1.1 | |||||||||
Lending Partners IV | Mar 2022 | 1,150 | 977 | 178 | 1,015 | 1,193 | 16.6% | 13.2% | 1.2 | |||||||||
Lending Partners III | Apr 2017 | 1,498 | 958 | 1,240 | 366 | 1,606 | 14.1% | 11.5% | 1.7 | |||||||||
Lending Partners II | Jun 2014 | 1,336 | 1,179 | 1,261 | 18 | 1,279 | 2.8% | 1.4% | 1.1 | |||||||||
Lending Partners | Dec 2011 | 460 | 420 | 458 | 8 | 466 | 3.3% | 1.6% | 1.1 | |||||||||
Lending Partners Europe II | May 2019 | 837 | 672 | 766 | 240 | 1,006 | 16.8% | 13.5% | 1.5 | |||||||||
Lending Partners Europe | Mar 2015 | 848 | 662 | 626 | 55 | 681 | 0.9% | (0.9)% | 1.0 | |||||||||
Asia Credit Opportunities II | Feb 2025 | 1,795 | — | — | — | — | N/A | N/A | N/A | |||||||||
Asia Credit Opportunities | Jan 2021 | 1,084 | 841 | 245 | 892 | 1,137 | 15.3% | 11.6% | 1.4 | |||||||||
Other Alternative Credit Investment Vehicles | Various | 18,363 | 10,607 | 7,188 | 7,069 | 14,257 | N/A | N/A | N/A | |||||||||
All Funds | $49,455 | $31,873 | $21,202 | $17,757 | $38,959 | |||||||||||||
(1)Recycled capital is excluded from the amounts invested and realized.
(2)These credit funds utilize third-party financing facilities to provide liquidity to such funds, and in such event IRRs are calculated from the time capital
contributions are due from fund investors to the time fund investors receive a related distribution from the fund. The use of such financing facilities
generally decreases the amount of invested capital that would otherwise be used to calculate IRRs, which tends to increase IRRs when fair value grows
over time and decrease IRRs when fair value decreases over time. IRRs measure the aggregate annual compounded returns generated by a fund's
investments over a holding period and are calculated taking into account recycled capital. Net IRRs presented are calculated after giving effect to the
allocation of realized and unrealized carried interest and the payment of any applicable management fees and organizational expenses. Gross IRRs are
calculated before giving effect to the allocation of carried interest and the payment of any applicable management fees and organizational expenses.
(3)The multiples of invested capital measure the aggregate value generated by a fund's investments in absolute terms. Each multiple of invested capital is
calculated by adding together the total realized and unrealized values of a fund's investments and dividing by the total amount of capital invested by the
investors. The use of financing facilities generally decreases the amount of invested capital that would otherwise be used to calculate multiples of
invested capital, which tends to increase multiples when fair value grows over time and decrease multiples when fair value decreases over time. Such
amounts do not give effect to the allocation of any realized and unrealized returns on a fund's investments to the fund's general partner pursuant to a
carried interest or the payment of any applicable management fees and are calculated without taking into account recycled capital.
For additional information regarding impact of market conditions on the value and performance of our investments, see
"Risk Factors—Risks Related to Our Business—Difficult market and economic conditions can, and periodically do, materially
and adversely affect KKR." and "Risk Factors—Risks Related to Our Investment Activities—Future results of our investments
may be different than, and may not achieve the levels of, any of our historical returns" in this report.
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Segment Balance Sheet Measures
Asset Management Segment Investment Portfolio
To the extent our investments are realized at values above or below their cost in future periods, adjusted net income
would be positively or negatively affected by the amount of any such gain or loss, respectively, during the period in which the
realization event occurs.
Our investments in the Asset Management segment by asset class as of December 31, 2025 are as follows:
As of December 31, 2025 | ||||||
Asset Management Segment Investments (1) | Cost | Fair Value | Fair Value as a % of Total Asset Management Investments | |||
($ in thousands) | ||||||
Traditional Private Equity | $1,359,880 | $3,313,869 | 38.4% | |||
Growth Equity | 238,152 | 984,220 | 11.4% | |||
Private Equity Total | 1,598,032 | 4,298,089 | 49.8% | |||
Real Estate | 1,427,054 | 1,196,271 | 13.9% | |||
Infrastructure | 267,116 | 527,916 | 6.1% | |||
Energy | 47,811 | 296,533 | 3.4% | |||
Real Assets Total | 1,741,981 | 2,020,720 | 23.4% | |||
Leveraged Credit | 1,155,175 | 1,067,980 | 12.4% | |||
Alternative Credit | 491,730 | 592,315 | 6.9% | |||
Credit Total | 1,646,905 | 1,660,295 | 19.3% | |||
Other | 684,723 | 651,073 | 7.5% | |||
Total Asset Management Segment Investments | $5,671,641 | $8,630,177 | 100.0% | |||
(1)Investments is a term used solely for purposes of financial presentation of a portion of KKR's balance sheet and includes majority ownership of
subsidiaries that operate KKR's asset management and insurance businesses, including the general partner interests of KKR's investment funds.
Investments presented are principally the assets measured at fair value that are held by KKR's asset management segment, which, among other things,
does not include the underlying investments held by Global Atlantic and Marshall Wace. This table excludes investments in our Strategic Holdings and
Insurance segments, for which additional information is available in Note 21 "Segment Reporting" in our financial statements.
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Insurance Segment Investment Portfolio
As of December 31, 2025, the Insurance segment’s investment portfolio (on an unconsolidated basis, excluding the
elimination of intercompany balances) consisted of the following categories of investments:
($ in thousands) | As of December 31, 2025 | |||
Fixed-maturity securities, available-for-sale | $95,672 | 48% | ||
Fixed-maturity securities, trading | 26,420 | 13% | ||
Mortgage and other loan receivables | 53,639 | 27% | ||
Real assets | 15,370 | 8% | ||
Funds withheld receivables, at interest | 2,324 | 1% | ||
Other investments | 6,936 | 3% | ||
Total investments | $200,361 | |||
The portion of the Insurance segment’s investment portfolio consisting of floating rate assets was 27% and 25% as of
December 31, 2025, and December 31, 2024, respectively.
Credit Quality of Fixed Maturity Securities
As of December 31, 2025, 95%, and 91% of the Insurance segment’s fixed maturity securities were considered investment
grade under ratings from the Securities Valuation Office of the NAIC and NRSROs, respectively. As of December 31, 2024, 95%,
and 90% of fixed maturity securities were considered investment grade under ratings from NAIC and NRSROs, respectively.
Securities where a rating by a NRSRO was not available are considered investment grade if they have a NAIC designation of
“1” or “2.”
The Securities Valuation Office of the NAIC evaluates the fixed maturity security investments of insurers for regulatory
reporting and capital assessment purposes and assigns securities to one of six credit quality categories called “NAIC
designations.” Using an internally developed rating is permitted by the NAIC if no rating is available. These designations are
generally similar to the credit quality designations of NRSROs for marketable fixed maturity securities, except for certain
structured securities as described below. NAIC designations of “1,” highest quality, and “2,” high quality, include fixed
maturity securities generally considered investment grade by NRSROs. NAIC designations “3” through “6” include fixed
maturity securities generally considered below investment grade by NRSROs.
Consistent with the NAIC Process and Procedures Manual, a NRSRO rating was assigned based on the following criteria: (i)
the equivalent S&P rating where the security is rated by one NRSRO; (ii) the equivalent S&P rating of the lowest NRSRO when
the security is rated by two NRSROs; and (iii) the equivalent S&P rating of the second lowest NRSRO if the security is rated by
three or more NRSROs. If the lowest two NRSROs’ ratings are equal, then such rating will be the assigned rating. NRSROs’
ratings available for the periods presented were S&P, Fitch, Moody’s, DBRS, Inc., and Kroll Bond Rating Agency, Inc. If no
rating is available from a rating agency, then an internally developed rating is used.
Within the funds withheld receivable at interest portfolio, 97% of the fixed maturity securities were investment grade by
NAIC designation as of both December 31, 2025, and December 31, 2024, respectively.
Trading fixed maturity securities primarily back funds withheld payable at interest where the investment performance is
ceded to reinsurers under the terms of the respective reinsurance agreements.
Unrealized Gains and Losses on Available-for-Sale Fixed Maturity Securities
The Insurance segment’s investments in available-for-sale (“AFS”) fixed maturity securities are reported at fair value with
changes in fair value recorded in other comprehensive income as unrealized gains or losses, net of taxes and offsets.
Unrealized gains and losses can be created by changes in interest rates or by changes in credit spreads.
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As of December 31, 2025, and December 31, 2024, the Insurance segment had gross unrealized losses on below
investment grade AFS fixed maturity securities of $313.8 million and $584.3 million based on NRSRO ratings, and $187.7
million and $245.6 million based on NAIC ratings, respectively. As of December 31, 2025, unrealized losses were not
recognized in net income on these fixed maturity securities since the Insurance segments neither intends to sell the securities
nor does it believe that it is more likely than not that it will be required to sell these securities before recovery of their cost or
amortized cost basis.
Credit Quality of Mortgage and Other Loan Receivables
Mortgage and other loan receivables consist of commercial and residential mortgage loans, consumer loans, and other
loan receivables. As of December 31, 2025, and December 31, 2024, 27% and 30% of the total investments consisted of the
Insurance segment’s mortgage and other loan receivables, respectively.
The Insurance segment invests in U.S. mortgage loans, comprised of first lien and mezzanine commercial mortgage loans
and first lien residential mortgage loans. For the commercial mortgage loan portfolio, the most prevalent property type is
multi-family residential buildings, which represents approximately half of the portfolio as of both December 31, 2025, and
December 31, 2024. Office and retail properties represent approximately 21% and 20% of the portfolio as of December 31,
2025 and December 31, 2024, respectively.
The Insurance segment’s commercial mortgage loans are assigned NAIC designations, with designations “CM1” and
“CM2” considered to be investment grade. As of both December 31, 2025, and December 31, 2024, 91% of the commercial
mortgage loan portfolio were rated investment grade based on NAIC designation, respectively. The payment status of over
99% of the commercial mortgage loan portfolio is current as of both December 31, 2025, and December 31, 2024,
respectively.
The loan-to-value ratio is expressed as a percentage of the current amount of the loan relative to the value of the
underlying collateral. As of December 31, 2025, and December 31, 2024, approximately 89% and 90%, respectively, of the
commercial mortgage loans have a loan-to-value ratio of 70% or less, and as of December 31, 2025, and December 31, 2024,
2% and 1% have loan-to-value ratio over 90%, respectively.
Changing economic conditions and updated assumptions affect the Insurance segment’s assessment of the collectibility
of commercial mortgage loans. Changing vacancies and rents are incorporated into the analysis performed to measure the
allowance for credit losses. In addition, the Insurance segment continuously monitors its commercial mortgage loan portfolio
to identify risk. Areas of emphasis are properties that have exposure to specific geographic events or have deteriorating
credit.
The Insurance segment’s residential mortgage loan portfolio primarily includes mortgage loans backed by single family
rental properties, prime loans, and re-performing loans that were purchased at a discount after they were modified and
returned to performing status. The Insurance segment also extends financing to counterparties in the form of repurchase
agreements secured by mortgage loans, including performing and non-performing mortgage loans.
As of December 31, 2025, the payment status of 97% of the residential mortgage loan portfolio is current, and
approximately $273.4 million is 90 days or more past due or in process of foreclosure (representing 1% of the total residential
mortgage portfolio). As of December 31, 2024, the payment status of 97% of the residential mortgage loan portfolio was
current and approximately $275.1 million were 90 days or more past due or in process of foreclosure (representing 1% of the
total residential mortgage portfolio).
The weighted average loan-to-value ratio for residential mortgage loans was 64% and 63% as of December 31, 2025, and
December 31, 2024, respectively.
The Insurance segment’s consumer loan portfolio is primarily comprised of home improvement loans, residential solar
loans, student loans, and auto loans. As of December 31, 2025, 97% of the consumer loan portfolio is in current status and
approximately $31.3 million is 90 days or more past due or in process of foreclosure (representing 1% of the total consumer
loan portfolio).
See Note 7 “Investments” in the accompanying financial statements in this report for additional information regarding
the Insurance segment’s investment portfolio.
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Additional Information
To provide supplemental information to stockholders about the net assets of KKR on a segment basis, KKR’s book value
was $33.1 billion as of December 31, 2025, which included cash and short-term investments of $4.8 billion. KKR's book value
includes its net investment in Global Atlantic, investments in the Asset Management and Strategic Holdings segments, and the
net impact of certain other assets and liabilities, including income taxes. KKR's book value excludes the net assets allocable to
investors in KKR’s investment funds and other noncontrolling interest holders. From January 1, 2025 through December 31,
2025, the Asset Management segment transferred $1.1 billion of investments to the Insurance segment for which no gain or
loss was recognized.
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Reconciliations to GAAP Measures
Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders
For the Year Ended | |||
($ in thousands) | December 31, 2025 | December 31, 2024 | |
Net Income (Loss) - KKR Common Stockholders (GAAP) | $2,251,867 | $3,076,245 | |
Preferred Stock Dividends | 118,596 | — | |
Net Income (Loss) Attributable to Noncontrolling Interests | 3,774,949 | 1,829,792 | |
Income Tax Expense (Benefit) | 953,748 | 954,396 | |
Income (Loss) Before Tax (GAAP) | $7,099,160 | $5,860,433 | |
Impact of Consolidation and Other | (4,020,179) | (1,268,787) | |
Preferred Stock Dividends | (118,596) | — | |
Income Taxes on Adjusted Earnings | (1,108,064) | (988,797) | |
Asset Management Adjustments: | |||
Unrealized (Gains) Losses | 560,892 | (673,790) | |
Unrealized Carried Interest | (2,140,747) | (1,943,200) | |
Unrealized Carried Interest Compensation | 1,566,828 | 1,505,558 | |
Transaction-related and Non-operating Items(1) | 96,289 | 122,009 | |
Equity-based Compensation | 268,067 | 279,418 | |
Equity-based Compensation - Performance based | 348,848 | 332,226 | |
Amortization of Acquired Intangibles | 1,787 | — | |
Strategic Holdings Adjustments: | |||
Unrealized (Gains) Losses | (746,252) | (958,418) | |
Insurance Adjustments: | |||
(Gains) Losses from Investments | 2,088,687 | 1,465,348 | |
Non-Operating Changes from Policy Liabilities and Derivatives | 319,471 | 296,917 | |
Transaction-Related and Non-Operating Items(1) | 42,350 | 20,615 | |
Equity-Based Compensation | 100,135 | 134,799 | |
Amortization of Acquired Intangibles | 18,796 | 17,935 | |
Adjusted Net Income | $4,377,472 | $4,202,266 | |
Interest Expense, Net | 257,725 | 302,381 | |
Preferred Stock Dividends | 132,073 | — | |
Net Income Attributable to Noncontrolling Interests | 15,002 | 16,060 | |
Income Taxes on Adjusted Earnings | 1,108,064 | 988,797 | |
Total Segment Earnings | $5,890,336 | $5,509,504 | |
Net Realized Performance Income | (491,736) | (608,788) | |
Net Realized Investment Income | (412,796) | (542,163) | |
Total Operating Earnings | $4,985,804 | $4,358,553 | |
Total Investing Earnings | 904,532 | 1,150,951 | |
Depreciation and Amortization | 67,854 | 50,011 | |
Adjusted EBITDA | $5,958,190 | $5,559,515 | |
(1)For the year ended December 31, 2025, Transaction-related and Other Non-operating items includes (i) $99 million related to transaction-related costs
and other corporate actions, and (ii) $39 million of costs associated with certain integration, restructuring, and other non-operating expenses across our
Asset Management and Insurance businesses.
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KKR & Co. Inc. Stockholders' Equity - Common Stock
As of | |
($ in thousands) | December 31, 2025 |
KKR & Co. Inc. Stockholders' Equity – Common Stock (GAAP) | $28,359,157 |
Impact of Consolidation and Other | 356,408 |
Exchangeable Securities | 335,842 |
Accumulated Other Comprehensive Income (Loss) (AOCI) and Other (Insurance) | 4,098,704 |
Accumulated Unrealized (Gains) Losses on Loans carried at Fair Value (Insurance) | (99,591) |
KKR Book Value(1) | $33,050,520 |
(1)Book Value is a non-GAAP performance measure, which provides additional insight into the net assets of KKR presented on a basis that (i) excludes the net
assets that are allocated to investors in KKR’s investment funds and other noncontrolling interest holders, (ii) includes the net assets that are attributable
to certain securities exchangeable into shares of common stock of KKR & Co. Inc., (iii) includes the net investment in Global Atlantic, investments in the
Asset Management and Strategic Holdings segments, and (iv) includes the net impact of certain other assets and liabilities, including the net impact of
KKR's tax assets and liabilities as calculated under GAAP. Book Value excludes the dilutive impact of the conversion of any of KKR & Co. Inc.’s Series D
Mandatory Convertible Preferred Stock. If all outstanding shares of the Series D Mandatory Convertible Preferred Stock were converted into KKR & Co.
Inc. common stock as of December 31, 2025, our Book Value would have increased by $2.5 billion and our common stock outstanding would have
increased by 20.8 million shares.
Cash and Cash Equivalents - Asset Management and Strategic Holdings
As of | |
($ in thousands) | December 31, 2025 |
Cash and Cash Equivalents – Asset Management and Strategic Holdings (GAAP) | $9,380,874 |
Impact of Consolidation and Other | (4,818,513) |
Short-term Investments | 227,292 |
Cash and Short-term Investments | $4,789,653 |
Investments - Asset Management and Strategic Holdings
As of | |
($ in thousands) | December 31, 2025 |
Investments – Asset Management and Strategic Holdings (GAAP) | $127,948,305 |
Impact of Consolidation and Other | (119,090,836) |
Short-term Investments | (227,292) |
Investments – Asset Management Segment | $8,630,177 |
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Liquidity
We manage our liquidity and capital requirements by (a) focusing on our cash flows before the consolidation of our funds
and CFEs and the effect of changes in short term assets and liabilities, which we anticipate will be settled for cash within one
year, and (b) seeking to maintain access to sufficient liquidity through various sources. The overall liquidity framework and
cash management approach of our insurance business are also based on seeking to build an investment portfolio that is cash
flow matched, providing cash inflows from insurance assets that meet our insurance companies' expected cash outflows to
pay their liabilities. Our primary cash flow activities typically involve (i) generating cash flow from operations; (ii) generating
income from investment activities, by investing in investments that generate yield (namely interest and dividends), as well as
through the sale of investments and other assets; (iii) funding capital commitments that we have made to, and advancing
capital to, our funds and CLOs; (iv) developing and funding new investment strategies, investment products, and other growth
initiatives, including acquisitions of other investments, assets, and businesses; (v) underwriting and funding capital
commitments in our capital markets business; (vi) distributing cash flow to our stockholders and any holders of our preferred
stock, if any; and (vii) paying borrowings, interest payments, and repayments under credit agreements, our senior and
subordinated notes, and other borrowing arrangements. See "—Liquidity," "—Liquidity Needs," and "—Dividends and Stock
Repurchases."
See "Risk Factors" and "—Business Environment" in this report for more information on factors that may impact our
business, financial performance, operating results, and valuations.
Sources of Liquidity
Our primary sources of liquidity consist of amounts received from: (i) our operating activities, including the fees earned
from our funds, portfolio companies, and capital markets transactions; (ii) realizations on carried interest from our investment
funds; (iii) interest and dividends from investments that generate yield, including our investments in CLOs; (iv) in our
insurance business, cash inflows in respect of new premiums, policyholder deposits, reinsurance transactions, and funding
agreements, including through memberships in FHLBs; (v) realizations on and sales of investments and other assets, including
the transfers of investments or other assets for fund formations (including CLOs and other investment vehicles); and (vi)
borrowings, including advances under our revolving credit facilities, debt offerings, repurchase agreements, and other
borrowing arrangements. In addition, we may generate cash proceeds from issuances of our or our subsidiaries' equity
securities. We have access to funding under various credit facilities, other borrowing arrangements and other sources of
liquidity that we have entered into with major financial institutions or which we receive from the capital markets. For a
discussion of our debt obligations, including our debt securities, revolving credit agreements and loans, see Note 16 "Debt
Obligations" in our financial statements.
Many of our investment funds like our private equity and real assets funds provide for carried interest. With respect to
our carry-paying investment funds, carried interest is eligible to be distributed to the general partner of the fund only after all
of the following are met: (i) a realization event has occurred (e.g., sale of a portfolio company, dividend, etc.); (ii) the vehicle
has achieved positive overall investment returns since its inception, in excess of performance hurdles where applicable, and is
accruing carried interest; and (iii) with respect to investments with a fair value below cost, cost has been returned to fund
investors in an amount sufficient to reduce remaining cost to the investments' fair value. Even after all of the preceding
conditions are met, the general partner of the fund may, in its sole discretion, decide to defer the distribution of carried
interest to it to a later date. In addition, these funds generally include what is called a “clawback” provision, which provides
that the general partner must return any carried interest that is paid in excess of what the general partner is entitled to
receive at the end of the term of the fund, as discussed further below.
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As of December 31, 2025, certain of our investment funds had met the first and second criteria, as described above, but
did not meet the third criteria. In these cases, carried interest accrues on the consolidated statement of operations, but will
not be distributed in cash to us as the general partner of an investment fund upon a realization event. For a fund that has a
fair value above cost, overall, and is otherwise accruing carried interest, but has one or more investments where fair value is
below cost, the shortfall between cost and fair value for such investments is referred to as a "netting hole." When netting
holes are present, realized gains on individual investments that would otherwise allow the general partner to receive carried
interest distributions are instead used to return invested capital to our funds' limited partners in an amount equal to the
netting hole. Once netting holes have been filled with either (i) return of capital equal to the netting hole for those
investments where fair value is below cost or (ii) increases in the fair value of those investments where fair value is below
cost, then realized carried interest will be distributed to the general partner upon a realization event. A fund that is in a
position to pay cash carry refers to a fund for which carried interest is expected to be paid to the general partner upon the
next material realization event, which includes funds with no netting holes as well as funds with a netting hole that is
sufficiently small in size such that the next material realization event would be expected to result in the payment of carried
interest. Strategic investor partnerships with fund investors may require netting across the various funds in which they invest,
which may reduce the carried interest we otherwise would have earned if such fund investors were to have invested in our
funds without the existence of the strategic investor partnership. As of December 31, 2025, netting holes in excess of $50
million existed at North America Fund XI in the amount of $417 million. The remaining unrealized gains accrued at this fund as
of December 31, 2025 is in excess of its netting hole. In accordance with the criteria set forth above, other funds currently
have and may in the future develop netting holes, and netting holes for those and other funds may otherwise increase or
decrease in the future.
If the investment fund has distributed carried interest but subsequently does not have sufficient value to provide for the
distribution of carried interest at the end of the life of the investment fund, the general partner is typically required to return
previously distributed carried interest to the fund investors. Current and former employees who received distributions of
carried interest subject to clawback would be required to return the amount of such distributions to KKR. However, it is KKR’s
obligation to return carried interest subject to clawback to the fund investors. As of December 31, 2025, approximately $150
million of previously distributed carried interest, in aggregate, was subject to a clawback obligation, assuming that all
applicable carry-paying investment funds were liquidated at their reported fair values as of December 31, 2025. As of
December 31, 2025, there are no investment funds subject to a clawback obligation in excess of $50 million that has not
already reduced net realized performance income. See Note 24 "Commitments and Contingencies—Contingent Repayment
Guarantees" in our financial statements included elsewhere in this report for further information. See also the negative
amounts included in the Carried Interest column in the table included in this Item 7 in “Fund Performance Metrics” for further
information on clawback obligations.
Liquidity Needs
We expect that our primary liquidity needs will consist of cash required to meet various obligations, including, without
limitation, to:
•continue to support and grow our asset management business, including seeding new investment strategies,
supporting capital commitments made by our investment vehicles to existing and future funds, co-investments
and otherwise supporting the investment vehicles that we sponsor, and acquiring other assets, businesses, and
investments for our businesses;
•continue to support and grow our insurance business;
•continue to support and grow our strategic holdings business, including through the acquisition of new operating
companies;
•grow and expand our businesses generally, including by acquiring or launching new, complementary, or adjacent
businesses;
•warehouse investments in portfolio companies or other investments for the benefit of one or more of our funds,
accounts or CLOs or other investment vehicles pending the contribution of committed capital by the fund
investors in such investment vehicles, and advancing capital to them for operational or other needs;
• funding requirements to levered investment vehicles or structured transactions;
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•service debt obligations including the payment of obligations at maturity, on interest payment dates or upon
redemption;
•fund cash operating expenses and contingencies, including for litigation matters and guarantees;
•pay corporate income taxes and other taxes;
•pay policyholders and amounts in our insurance business related to investment, reinvestment, reinsurance, or
funding agreement activity;
•pay amounts that may become due under our tax receivable agreement;
•pay cash dividends in accordance with our dividend policy for our common stock or the terms of our preferred
stock;
•underwrite commitments, advance loan proceeds, and fund syndication commitments within our capital
markets business;
•post or return collateral in respect of derivative contracts;
•satisfy regulatory requirements for our capital markets business, risk retention requirements for CLOs (to the
extent they may apply), or to address capital needs of unregulated and regulated subsidiaries, including capital
and collateral requirements, as applicable, for our insurance and broker-dealer subsidiaries; and
•repurchase shares of our common stock or retire equity awards pursuant to the share repurchase program or
repurchase or redeem other securities issued by us (for a discussion of KKR's share repurchase program, see
Note 22 "Equity" in our financial statements).
Capital Commitments
The agreements governing our active investment funds generally require the general partners of the funds to make
minimum capital commitments to such funds, which generally range from 2% to 8% of a fund's total capital commitments at
final closing, but may be greater for certain funds (i) where we are pursuing newer strategies, (ii) where third party investor
demand is limited, and (iii) where a larger commitment is consistent with the asset allocation strategy.
As of December 31, 2025, KKR had unfunded commitments consisting of $10.5 billion to its investment funds and other
investment vehicles across Private Equity, Real Assets, and Credit and Liquid Strategies business lines. These unfunded
commitments include $2.7 billion of uncalled capital commitments to certain investment vehicles in connection with
investments in the core private equity strategy. These unfunded commitments also include funding requirements to levered
investment vehicles and structured transactions to fund or otherwise be liable for a portion of the vehicle's investment losses
and/or to provide the vehicle with liquidity upon certain termination events.
In addition to these uncalled commitments and funding obligations to KKR's investment funds and investment vehicles,
KKR has entered into contractual commitments primarily with respect to underwriting transactions, debt financing, revolving
credit facilities, and equity syndications in our Capital Markets business line. As of December 31, 2025, these capital markets
commitments amounted to $1.0 billion. Whether these amounts are actually funded, in whole or in part, depends on the
contractual terms of such capital markets commitments, including the satisfaction or waiver of any conditions to closing or
funding. From time to time, we fund these various capital markets commitments noted above in our capital markets business
by drawing all or substantially all of our availability for borrowings under our available credit facilities available for our Capital
Markets business line. We generally expect these borrowings by our capital markets business to be repaid promptly as these
commitments are syndicated to third parties or otherwise fulfilled or terminated, although we may in some instances elect to
retain a portion of the commitments for our own investment. Additionally, KKR's capital markets business has arrangements
with third parties, which are expected to reduce KKR's risk under certain circumstances when underwriting certain debt
transactions. As a result, our unfunded capital markets commitments as of December 31, 2025 have been reduced to reflect
the amount expected to be funded by such third parties. As of December 31, 2025, KKR's capital markets business line has
entered into such arrangements representing a total notional amount of $5.0 billion. For more information about our Capital
Markets business line's risks, see "Risk Factors—Risks Related to Our Business—Our capital markets activities expose us to
material risks" in this report.
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Tax Receivable Agreement
On May 30, 2022, KKR terminated the tax receivable agreement with KKR Holdings other than with respect to exchanges
of KKR Holdings equity completed prior to such date. As of December 31, 2025, an undiscounted payable of $359.3 million has
been recorded in due to affiliates in the financial statements representing management's best estimate of the amounts
currently expected to be owed for certain exchanges of KKR Holdings equity that took place prior to the termination of the tax
receivable agreement. As of December 31, 2025, $129.4 million of cumulative cash payments have been made under the tax
receivable agreement since inception.
Dividends and Stock Repurchases
A dividend of $0.185 per share of our common stock has been declared and will be paid on March 3, 2026 to holders of
record of our common stock as of the close of business on February 17, 2026.
A dividend of $0.78125 per share of Series D Mandatory Convertible Preferred Stock has been declared and set aside for
payment on March 1, 2026 to holders of record of Series D Mandatory Convertible Preferred Stock as of the close of business
on February 15, 2026.
When KKR & Co. Inc. receives distributions from KKR Group Partnership, holders of exchangeable securities receive their
pro rata share of such distributions from KKR Group Partnership.
The declaration and payment of dividends to our common or preferred stockholders will be at the sole discretion of our
Board of Directors, and our dividend policy may be changed at any time. We announced on February 5, 2026 that our current
dividend policy will be to pay dividends to holders of our common stock in an annual aggregate amount of $0.78 per share (or
a quarterly dividend of $0.195 per share) beginning with the dividend announced with the results for the three months ended
March 31, 2026. The declaration of dividends is subject to the discretion of our Board of Directors based on a number of
factors, including KKR’s future financial performance and other considerations that the Board of Directors deems relevant,
and compliance with the terms of KKR & Co. Inc.'s certificate of incorporation and applicable law. For U.S. federal income tax
purposes, any dividends we pay (including dividends on our preferred stock) generally will be treated as qualified dividend
income for U.S. individual stockholders to the extent paid out of our current or accumulated earnings and profits, as
determined for U.S. federal income tax purposes. There can be no assurance that future dividends will be made as intended
or at all or that any particular dividend policy for our common stock or our preferred stock will be maintained. Furthermore,
the declaration and payment of distributions by KKR Group Partnership and our other subsidiaries may also be subject to
legal, contractual and regulatory restrictions, including restrictions contained in our debt agreements.
Since 2015, KKR has repurchased, or retired equity awards representing, a total of 94.2 million shares of common stock
for $2.8 billion, which equates to an average price of $29.36 per share. For further information, see "Part II—Item 5—Market
for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities."
Contractual Obligations, Commitments and Contingencies
In the ordinary course of business, we (including Global Atlantic) and our consolidated funds and CFEs enter into
contractual arrangements that may require future cash payments. Contractual arrangements include (i) commitments to fund
the purchase of investments or other assets (including obligations to fund capital commitments as the general partner of our
investment funds) or to fund collateral for derivative transactions or otherwise, (ii) obligations arising under our senior notes,
subordinated notes, and other indebtedness, (iii) commitments by our capital markets business to underwrite transactions or
to lend capital, (iv) obligations arising under insurance policies written, (v) other contractual obligations, including servicing
agreements with third-party administrators for insurance policy administration, and (vi) commitments to fund the business,
operations or investments of our subsidiaries. In addition, we may incur contingent liabilities for claims that may be made
against us in the future. For more information about these contingent liabilities, please see Note 24 "Commitments and
Contingencies" in our financial statements.
The following table sets forth information relating to anticipated future cash payments as of December 31, 2025
excluding consolidated funds and CFEs with a reconciliation of such amounts to anticipated future cash payments by us
(including Global Atlantic) and our consolidated funds and CFEs.
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Payments due by Period | ||||||||||
Types of Contractual Obligations | <1 Year | 1-3 Years | 3-5 Years | >5 Years | Total | |||||
($ in millions) | ||||||||||
Asset Management | ||||||||||
Uncalled commitments to investment funds (1) | $10,482.2 | $— | $— | $— | $10,482.2 | |||||
Debt payment obligations (2) | — | 517.5 | 1,840.9 | 7,012.6 | 9,371.0 | |||||
Interest obligations on debt payment obligations (3) | 440.6 | 729.8 | 655.9 | 5,235.1 | 7,061.4 | |||||
Underwriting commitments (4) | 824.7 | — | — | — | 824.7 | |||||
Lending commitments (5) | 216.7 | — | — | — | 216.7 | |||||
Purchase commitments (6) | 237.4 | — | — | — | 237.4 | |||||
Lease obligations | 82.5 | 154.5 | 142.5 | 587.9 | 967.4 | |||||
Insurance (7)(8) | ||||||||||
Debt payment obligations (9) | — | — | 500.0 | 3,274.0 | 3,774.0 | |||||
Interest obligations on debt payment obligations (10) | 233.0 | 479.0 | 454.0 | 3,621.0 | 4,787.0 | |||||
Purchase and lease commitments (11) | 44.6 | 60.0 | 44.2 | 329.4 | 478.2 | |||||
Total Contractual Obligations of KKR | $12,561.7 | $1,940.8 | $3,637.5 | $20,060.0 | $38,200.0 | |||||
(+) Uncalled commitments of consolidated funds (12) | 16,308.4 | — | — | — | 16,308.4 | |||||
(+) Debt payment obligations of consolidated funds, CFEs and Other (13) | 798.9 | 2,912.7 | 1,075.1 | 35,326.0 | 40,112.7 | |||||
(+) Corporate real estate borrowings (14) | — | 500.0 | — | — | 500.0 | |||||
(+) Interest obligations of consolidated funds, CFEs and Other (15) | 2,432.2 | 3,749.2 | 3,445.9 | 9,086.8 | 18,714.1 | |||||
(+) Debt and Interest Payment Obligations of Consolidated Special Purpose Vehicles - Insurance | — | 197.0 | — | — | 197.0 | |||||
Total Consolidated Contractual Obligations | $32,101.2 | $9,299.7 | $8,158.5 | $64,472.8 | $114,032.2 | |||||
(1)These uncalled commitments represent amounts committed by us to fund a portion of the purchase price paid for each investment made by our
investment funds which are actively investing. Because capital contributions are due on demand, the above commitments have been presented as falling
due within one year. However, given the size of such commitments and the pace at which our investment funds make investments, we expect that the
capital commitments presented above will be called over a period of several years. See "—Liquidity Needs" and Note 16 "Debt Obligations" in our financial
statements.
(2)Amounts include senior notes and subordinated notes issued by KKR and its subsidiaries.
(3)These interest obligations on debt represent estimated interest to be paid over the term of the related debt obligation, which has been calculated
assuming the debt outstanding as of December 31, 2025 is not repaid until its maturity. Future interest rates are assumed to be those in effect as of
December 31, 2025, including both variable and fixed rates, as applicable, provided for by the relevant debt agreements. The amounts presented above
include accrued interest on outstanding indebtedness.
(4)Represents various commitments in our capital markets business in connection with the underwriting of loans, securities and other financial instruments.
These commitments are shown net of amounts syndicated.
(5)Represents obligations in our capital markets business to lend under various revolving credit facilities.
(6)Represents commitments of KKR's asset management business line to fund the purchase of various investments.
(7)Global Atlantic has other obligations related to collateral payable held for derivative instruments ($511.5 million) and outstanding commitments to make
investments in commercial mortgage loans, other lending facilities and other investments ($7.3 billion) which have not been included in the above table
as the exact timing of these payments cannot be estimated. Global Atlantic's debt obligations are non-recourse to KKR beyond the assets of Global
Atlantic.
(8)Global Atlantic also has obligations to meet future obligations for policy liabilities. These obligations are subject to variability in amount and timing and as
such include significant assumptions related to the receipt of future premiums, mortality, lapse, renewal, withdrawal, and annuitization activity
comparable with actual experience. These assumptions also include market growth and policy crediting. Estimated cash flows for these obligations with
an expected maturity within the next year, within the next 5 years, and for all years were $21.2 billion, $109.6 billion, and $254.5 billion, respectively,
gross of reinsurance offsets. Due to the significance of the assumptions used, these amounts may differ materially from actual results.
(9)The payments due by period for debt obligations reflect the contractual maturities of principal.
(10)Reflects estimated future interest payments. Future interest on variable rate debt (which includes borrowing under Global Atlantic's revolving credit
facility and the subordinated debentures) was computed using prevailing rates as of December 31, 2025 and, as such, does not consider the impact of
future rate movements. Future interest on fixed rate debt was computed using the stated rate on the obligations.
(11)Reflects operational servicing agreements with third-party administrators for policy administration.
(12)Represents uncalled commitments of our consolidated funds excluding KKR's portion of uncalled commitments as the general partner of the respective
funds. Because capital contributions are due on demand, the above commitments have been presented as falling due within one year. However, given the
size of such commitments and the pace at which our investment funds make investments, we expect that the capital commitments presented above will
be called over a period of several years. See "—Liquidity Needs" and Note 16 "Debt Obligations" in our financial statements.
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(13)Amounts include (i) financing arrangements entered into by our consolidated funds with the objective of providing liquidity to the funds of $6.6 billion,
(ii) debt securities issued by our consolidated CLOs of $30.2 billion and (iii) borrowings collateralized by fund investments, fund co-investments and other
assets held by levered investment vehicles of $3.3 billion. Debt securities issued by consolidated CLO entities are supported solely by the investments held
at the CLO vehicles and are not collateralized by assets of any other KKR entity. Borrowings by levered investment vehicles are supported solely by the
investments held at the investment vehicles and are not collateralized by assets of any other KKR entity. Obligations under financing arrangements
entered into by our consolidated funds are generally limited to our pro rata equity interest in such funds. Our management companies bear no obligations
to repay any financing arrangements at our consolidated funds.
(14)Represents a debt obligation in connection with the ownership of KKR office space.
(15)The interest obligations on debt of our CFEs and other borrowings represent estimated interest to be paid over the term of the related debt obligation,
which has been calculated assuming the debt outstanding as of December 31, 2025 is not repaid until its maturity. Future interest rates are assumed to be
those in effect as of December 31, 2025, including both variable and fixed rates, as applicable, provided for by the relevant debt agreements. The
amounts presented above include accrued interest on outstanding indebtedness.
The commitment table above excludes contractual amounts owed under the tax receivable agreement because the
ultimate amount and timing of the amounts due are not presently known.
Off Balance Sheet Arrangements
We do not have any off-balance sheet financings or liabilities other than contractual commitments and other legal
contingencies incurred in the normal course of our business.
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Critical Accounting Policies and Estimates
The preparation of our financial statements in accordance with GAAP requires our management to make estimates and
judgments that affect the reported amounts of assets and liabilities, the recognition and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues, expenses, investment income (loss)
and income taxes during the reporting periods. Such estimates include but are not limited to (i) the valuation of investments
and financial instruments, (ii) the determination of the income tax provision, (iii) the impairment of goodwill and intangible
assets, (iv) the impairment of available-for-sale investments, (v) the valuation of insurance policy liabilities, including market
risk benefits, (vi) the valuation of embedded derivatives in policy liabilities and funds withheld, and (vii) the determination of
the allowance for loan losses. Our management bases these estimates and judgments on available information, historical
experience and other assumptions that we believe are reasonable under the circumstances. However, these estimates,
judgments and assumptions are often subjective and may be impacted negatively based on changing circumstances or
changes in our analyses. If actual amounts are ultimately different from those estimated, judged or assumed, revisions are
included in the financial statements in the period in which the actual amounts become known. We believe our critical
accounting policies could potentially produce materially different results if we were to change underlying estimates,
judgments or assumptions.
For a further discussion about our critical accounting policies, see Note 2 "Summary of Significant Accounting Policies" in
our financial statements included in this report.
Basis of Accounting
We consolidate the financial results of KKR Group Partnership and its consolidated entities, which include the accounts of
our investment advisers, broker-dealers, Global Atlantic’s insurance companies, the general partners of certain
unconsolidated investment funds, general partners of consolidated investment funds and their respective consolidated
investment funds, and certain other entities including CFEs.
When an entity is consolidated, we reflect the accounts of the consolidated entity, including its assets, liabilities,
revenues, expenses, investment income, cash flows, and other amounts, on a gross basis. While the consolidation of an
investment fund or entity does not have an effect on the amounts of Net Income Attributable to KKR or KKR's stockholders'
equity that KKR reports, the consolidation does significantly impact the financial statement presentation under GAAP. This is
due to the fact that the accounts of the consolidated entities are reflected on a gross basis while the allocable share of those
amounts that are attributable to third parties are reflected as single line items. The single line items in which the accounts
attributable to third parties are recorded are presented as noncontrolling interests on the consolidated statements of
financial condition and net income (loss) attributable to noncontrolling interests on the consolidated statements of
operations.
The presentations in the consolidated statement of financial condition and consolidated statement of operations reflect
the significant industry diversification of KKR by its acquisition of Global Atlantic. Global Atlantic operates an insurance
business, and KKR operates an asset management business, which manages the operations of the Strategic Holdings segment
(see Note 21 "Segment Reporting") in our financial statements included in this report, each of which possess distinct
characteristics. As a result, KKR developed a two-tiered approach for the financial statements presentation, where Global
Atlantic's insurance operations are presented separately from KKR's asset management business. KKR believes that these
separate presentations provide a more informative view of the consolidated financial position and results of operations than
traditional aggregated presentations and that reporting Global Atlantic’s insurance operations separately is appropriate given,
among other factors, the relative significance of Global Atlantic’s policy liabilities, which are not obligations of KKR (other than
the insurance companies that issued them). If a traditional aggregate presentation were to be used, KKR would expect to
eliminate or combine several identical or similar captions, which would condense the presentations, but would also reduce
the level of information presented. KKR also believes that using a traditional aggregate presentation would result in no new
line items compared to the two-tier presentation included in the financial statements in this report.
In the ordinary course of business, KKR’s Asset Management, Strategic Holdings, and Insurance businesses enter into
transactions with each other, which may include transactions pursuant to their investment management agreements and
financing arrangements. The borrowings from these financing arrangements are non-recourse to KKR beyond the assets
pledged to support such borrowings. All the investment management and financing arrangements amongst KKR’s Asset
Management, Strategic Holdings, and Insurance businesses are eliminated in consolidation.
All intercompany transactions and balances have been eliminated.
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Consolidation
KKR consolidates all entities that it controls either through a majority voting interest or as the primary beneficiary of
variable interest entities (“VIEs”). The following discussion is intended to provide supplemental information about how the
application of consolidation principles impact our financial results, and management’s process for implementing those
principles including areas of significant judgment. For a detailed description of our accounting policy on consolidation, see
Note 2 "Summary of Significant Accounting Policies" in our financial statements included in this report.
As part of its consolidation procedures, KKR evaluates: (i) whether it holds a variable interest in an entity, (ii) whether the
entity is a VIE, and (iii) whether the KKR’s involvement would make it the primary beneficiary. The determination that KKR
holds a controlling financial interest in an investment vehicle significantly changes the presentation of our consolidated
financial statements.
The assessment of whether we consolidate an investment vehicle we manage requires the application of significant
judgment. These judgments are applied both at the time we become involved with an investment vehicle and on an ongoing
basis and include, but are not limited to:
•Determining whether our management fees, carried interests, or incentive fees represent variable interests - We
make judgments as to whether the fees we earn are commensurate with the level of effort required for those fees
and at market rates. In making this judgment, we consider, among other things, the extent of third party investment
in the entity and the terms of any other interests we hold in the VIE.
•Determining whether a legal entity qualifies as a VIE - For those entities where KKR holds a variable interest,
management determines whether each of these entities qualifies as a VIE and, if so, whether or not KKR is the
primary beneficiary. The assessment of whether the entity is a VIE is generally performed qualitatively, which
requires judgment. These judgments include: (i) determining whether the equity investment at risk is sufficient to
permit the entity to finance its activities without additional subordinated financial support, (ii) evaluating whether
the equity holders, as a group, can make decisions that have a significant effect on the economic performance of the
entity, (iii) determining whether two or more parties’ equity interests should be aggregated, and (iv) determining
whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to
receive returns from an entity. Entities that do not qualify as VIEs are generally assessed for consolidation as voting
interest entities. Under the voting interest entity model, KKR consolidates those entities it controls through a
majority voting interest.
•Concluding whether KKR has an obligation to absorb losses or the right to receive benefits that could potentially be
significant to the VIE - As there is no explicit threshold in GAAP to define “potentially significant,” we must apply
judgment and evaluate both quantitative and qualitative factors to conclude whether this threshold is met.
Changes to these judgments could result in a change in the consolidation conclusion for a legal entity.
Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date under current market conditions. For further information about our
fair value measurements accounting policies, please see “Note 2—Summary of Significant Accounting Policies—Fair Value
Measurements.”
Level III Valuation Methodologies
Our investments and financial instruments are impacted by various economic conditions and events outside of our
control that are difficult to quantify or predict, which may have a significant impact on the valuation of our investments and,
therefore, on the carried interest and investment income we realize.
There is inherent uncertainty involved in the valuation of Level III investments, and there is no assurance that, upon
liquidation, KKR will realize the values reflected in our valuations. Our valuations may differ significantly from the values that
would have been used had an active market for the investments existed, and it is reasonably possible that the difference
could be material. See "Risk Factors" and "—Business Environment" in this report for more information on factors that may
impact our business, financial performance, operating results, and valuations.
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Key unobservable inputs that have a significant impact on our Level III valuations as described above are included in Note
9 "Fair Value Measurements" in our financial statements.
Across the total Level III private equity investment portfolio (including core private equity investments) held directly and
through both consolidated and unconsolidated investment vehicles in our Asset Management segment, the overall weights
ascribed to a market comparables valuation methodology, the discounted cash flow valuation methodology, and a valuation
methodology based on pending sales for this portfolio of Level III private equity investments (including core private equity
investments) were 38%, 55%, and 7%, respectively, as of December 31, 2025.
Across the total Level III real assets investment portfolio held directly and through both consolidated and unconsolidated
investment vehicles in our Asset Management segment, the overall weights ascribed to a market comparables valuation
methodology, the discounted cash flow valuation methodology, the direct income capitalization valuation methodology, and a
valuation methodology based on pending sales for this portfolio of Level III real assets investments were 3%, 91%, 2%, and
4%, respectively, as of December 31, 2025.
Level III Valuation Process
The valuation process involved for Level III measurements for our financial statements is completed on a quarterly basis
and is designed to subject the valuation of Level III investments to an appropriate level of consistency, oversight, and review.
For private equity and real asset investments classified as Level III, investment professionals prepare preliminary
valuations based on their evaluation of financial and operating data, company specific developments, market valuations of
comparable companies, and other factors. KKR begins its procedures to determine the fair values of its Level III assets
approximately one month prior to the end of a reporting period, and KKR follows additional procedures to ensure that its
determinations of fair value for its Level III assets are appropriate as of the relevant reporting date. These preliminary
valuations are generally reviewed by an independent valuation firm engaged by KKR to perform certain procedures in order to
assess the reasonableness of KKR's valuations. The valuations of certain real asset investments are determined solely by
independent valuation firms without the preparation of preliminary valuations by our investment professionals, and instead
such independent valuation firms rely on valuation information available to it as a broker or valuation firm. For credit
investments, an independent valuation firm is engaged by KKR to assist with the valuations of most investments classified as
Level III. As of December 31, 2025, less than 5% of the total value of Level III investments in aggregate across all of our
segments were not valued with the engagement of an independent valuation firm.
For Level III investments, KKR has a Global Valuation Committee that is responsible for coordinating and implementing
the firm's valuation processes to ensure consistency in the application of valuation principles across portfolio investments and
between reporting periods. The Global Valuation Committee is assisted by the asset class-specific valuation committees,
which are responsible for the review and approval of all preliminary Level III valuations in their respective asset classes at least
on a quarterly basis. The members of these valuation committees are comprised of investment professionals and
professionals from business operations functions such as legal, compliance, and finance, who are not primarily responsible for
the management of the investments. All Level III valuations for investments are also subject to approval by the Global
Valuation Committee, which is comprised of senior employees including investment professionals and professionals from
business operations functions, and includes KKR's Chief Financial Officer, Chief Legal Officer and General Counsel, and Chief
Compliance Officer. Once Level III valuations are approved by the Global Valuation Committee, a presentation of such
valuations is provided to the Audit Committee and then to the Board of Directors of KKR & Co. Inc. Level III valuations for our
insurance segment’s investments are approved by the Global Atlantic Valuation Committee prior to being presented to the
Global Valuation Committee.
As described above, Level III investments were valued using internal models with significant unobservable inputs, and our
determinations of the fair values of these investments may differ materially from the values that would have resulted if
readily observable inputs had existed. Additional external factors may cause those values, and the values of investments for
which readily observable inputs exist, to increase or decrease over time, which may create volatility in our earnings and the
amounts of assets and stockholders' equity that we report from time to time.
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Changes in the fair value of investments impacts the amount of carried interest that is recognized as well as the amount
of investment income that is recognized for investments across our business segments and through our consolidated funds as
described below. We estimate that an immediate 10% decrease in the fair value of investments held directly and through
consolidated investment funds generally would result in a commensurate change in the amount of net gains (losses) from
investment activities for investments held directly and through investment funds and a more significant impact to the amount
of carried interest recognized, regardless of whether the investment was valued using observable market prices or
management estimates with significant unobservable pricing inputs. With respect to consolidated investment funds, the
impact that the consequential decrease in investment income would have on net income attributable to KKR would generally
be significantly less than the amount described above, given that a majority of the change in fair value of our consolidated
funds would be attributable to noncontrolling interests and therefore we are only impacted to the extent of our carried
interest and our ownership in the consolidated investment funds and investment vehicles.
As of December 31, 2025, upon completion by, where applicable, independent valuation firms of certain limited
procedures requested to be performed by them on certain Level III investments, the independent valuation firms concluded
that the fair values, as determined by KKR (including Global Atlantic), of those investments reviewed by them were
reasonable. The limited procedures did not involve an audit, review, compilation or any other form of examination or
attestation under generally accepted auditing standards and were not conducted on all Level III investments. We are
responsible for determining the fair value of investments in good faith, and the limited procedures performed by an
independent valuation firm are supplementary to the inquiries and procedures that we are required to undertake to
determine the fair value of the commensurate investments on a GAAP basis.
As of December 31, 2025, there were no investments across business segments which represented greater than 5% of
total investments on a GAAP basis. Our investment income on a GAAP and segment basis can be impacted by volatility in the
public markets. See "Risk Factors" and "—Business Environment" in this report for a discussion of factors that may impact the
valuations of our investments, financial results, operating results, and valuations, and "—Segment Balance Sheet Measures"
for additional information regarding our largest holdings on a segment basis.
Business Combinations
KKR accounts for business combinations using the acquisition method of accounting, under which the purchase price of
the acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as
of the acquisition date.
Management’s determination of fair value of assets acquired and liabilities assumed at the acquisition date is based on
the best information available in the circumstances and may incorporate management’s own assumptions and involve a
significant degree of judgment. We use our best estimates and assumptions to accurately assign fair value to the tangible and
identifiable intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of those
acquired intangible assets. Examples of critical estimates in valuing certain of the intangible assets we have acquired include,
but are not limited to, future expected cash inflows and outflows, future fundraising assumptions, expected useful life,
discount rates, and income tax rates. Our estimates for future cash flows are based on historical data, various internal
estimates and certain external sources, and are based on assumptions that are consistent with the plans and estimates we are
using to manage the underlying assets acquired. We estimate the useful lives of the intangible assets based on the expected
period over which we anticipate generating economic benefit from the asset. We base our estimates on assumptions we
believe to be reasonable but that are unpredictable and inherently uncertain. Unanticipated events and circumstances may
occur that could affect the accuracy or validity of such assumptions, estimates or actual result.
Income Taxes
Significant judgment is required in estimating the provision for (benefit from) income taxes, current and deferred tax
balances (including valuation allowance), accrued interest or penalties, and uncertain tax positions. In evaluating these
judgments, we consider, among other items, projections of taxable income (including the character of such income),
beginning with historic results and incorporating assumptions of the amount of future pre-tax operating income. These
assumptions about future taxable income require significant judgment and are consistent with the plans and estimates that
KKR uses to manage its business. Revisions in estimates or actual costs of a tax assessment may ultimately be materially
different from the recorded accruals and unrecognized tax benefits, if any. Please see Note 18 "Income Taxes" in our financial
statements in this report for further details.
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Critical Accounting Policies and Estimates – Asset Management and Strategic Holdings
Revenues
Fees and Other
Fees and other consist primarily of (i) management and incentive fees from providing investment management services
to unconsolidated funds, CLOs, other investment vehicles, and separately managed accounts; (ii) transaction fees earned in
connection with successful investment transactions and from capital markets activities; (iii) monitoring fees from providing
services to portfolio companies; (iv) expense reimbursements from certain investment funds and portfolio companies; and
(v) consulting fees. These fees are based on the contractual terms of the governing agreements and are recognized when
earned, which coincides with the period during which the related services are performed and in the case of transaction fees,
upon closing of the transaction. Monitoring fees may provide for a termination payment following an initial public offering or
change of control. These termination payments are recognized in the period when the related transaction closes.
Transaction fee calculations and management fee calculations based on committed capital or invested capital typically do
not require discretion and therefore do not require the use of significant estimates or judgments. Management fee
calculations based on net asset value depend on the fair value of the underlying investments within the investment vehicles.
Estimates and assumptions are made when determining the fair value of the underlying investments within the funds and
could vary depending on the valuation methodology that is used as well as economic conditions.
Capital Allocation-Based Income (Loss)
Capital allocation-based income (loss) is earned from those arrangements whereby KKR serves as general partner and
includes income or loss from KKR's capital interest as well as "carried interest" which entitles KKR to a disproportionate
allocation of investment income or loss from an investment fund's limited partners.
Carried interest is recognized upon appreciation of the funds’ investment values above certain return hurdles set forth in
their partnership agreement. KKR recognizes revenues attributable to capital allocation-based income based upon the amount
that would be due pursuant to the fund partnership agreement at each period end as if the funds were terminated at that
date. Accordingly, the amount recognized reflects KKR’s share of the gains and losses of the associated funds’ underlying
investments measured at their then-current fair values relative to the fair values as of the end of the prior period. Because of
the inherent uncertainty in measuring the fair value of investments in the absence of observable market prices as previously
discussed, these estimated values may differ significantly from the values that would have been used had a ready market for
the investments existed, and it is reasonably possible that the difference could be material.
Expenses
Compensation and Benefits
Compensation and Benefits expense includes (i) base cash compensation consisting of salaries and wages, (ii) benefits,
(iii) carry pool allocations, (iv) equity-based compensation, and (v) discretionary cash bonuses.
Discretionary Cash Bonus
To supplement base cash compensation, benefits, carry pool allocations, and equity-based compensation, we typically
pay discretionary cash bonuses, which are included in Compensation and Benefits expense in the consolidated statements of
operations, based principally on the level of (i) management fees and other fee related revenues (including incentive fees), (ii)
realized performance income, which includes realized carried interest, and (iii) realized investment income earned during the
year. The amounts paid as discretionary cash bonuses, if any, are at our sole discretion and vary from individual to individual
and from period to period, including having no cash bonus. We accrue discretionary cash bonuses when payment becomes
probable and reasonably estimable which is generally in the period when we make the decision to pay discretionary cash
bonuses and is based upon a number of factors, including the recognition of asset management segment revenues, and other
factors determined during the year.
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We expect to pay our employees by assigning a percentage range to each component of asset management segment
revenues. Prior to January 1, 2024, based on the current components and blend of our asset management segment revenues
on an annual basis, we expected to use approximately: (i) 20‐25% of fee related revenues, (ii) 60‐70% of realized carried
interest and incentive fees not included in fee related performance revenues or earned from our hedge fund partnerships,
and (iii) 10‐20% of realized investment income and hedge fund partnership incentive fees, to pay our asset management
employees. Beginning in January 2024, we expect to use approximately: (i) 15%-20% of fee related revenues, (ii) 70%-80% of
realized carried interest and incentive fees not included in fee related performance revenues or earned from our hedge fund
partnerships, and (iii) 10%-20% of realized investment income and hedge fund partnership incentive fees, to pay our asset
management employees. Because these ranges are applied to applicable asset management segment revenue components
independently, and on an annual basis, the amount paid as a percentage of total asset management segment revenue will
vary and will, for example, likely be higher in a period with relatively higher realized carried interest and lower in a period with
relatively lower realized carried interest. We decide whether to pay a discretionary cash bonus and determine the percentage
of applicable revenue components to pay compensation only upon the occurrence of the realization event. There is no
contractual or other binding obligation that requires us to pay a discretionary cash bonus to the asset management
employees, except in limited circumstances.
Carry Pool Allocation
With respect to our funds that provide for carried interest, we allocate a portion of the realized and unrealized carried
interest that we earn to Associates Holdings, which we refer to as the carry pool, from which our asset management
employees and certain other carry pool participants are eligible to receive a carried interest allocation. The allocation is
determined based upon a fixed arrangement between Associates Holdings and us, and we do not exercise discretion on
whether to make an allocation to the carry pool upon a realization event. We refer to the portion of carried interest that we
allocate to the carry pool as the carry pool percentage.
Effective January 2, 2024, KKR applies a carry pool percentage of up to 80% for all funds, which is a carry pool percentage
in excess of the carry pool percentages previously fixed by investment fund as discussed further below, which depended on
the fund’s vintage. This increase to the carry pool percentage was approved by a majority of KKR's independent directors, and
the carry pool percentage may not be increased above 80% without the further approval of a majority of KKR's independent
directors. For funds that closed after December 31, 2023, the carry pool percentage is fixed at 80%. For funds that closed prior
to December 31, 2023, the carry pool percentage is calculated at a fixed percentage of 40%, 43%, or 65% (depending on the
fund’s vintage) for carried interest realized up to a high water mark, which was established based on the unrealized carried
interest balance that existed on January 2, 2024, plus an additional percentage amount up to 80% based on a formulaic
allocation, only if the unrealized carried interest balance at any period end exceeds the high water mark. This imposes a
limitation of the carry pool allocation for such funds based on the amount of cumulative unrealized carried interest income
earned subsequent to December 31, 2023.
For funds that closed before December 31, 2023, if the cumulative carried interest subsequent to December 31, 2023 is
not sufficient to fund this formulaic allocation, the allocation of earnings reverts to the carry pool percentage in effect before
this modification. As such, upon modification of the carry pool percentage effective on January 2, 2024, the cumulative
unrealized carried interest was not sufficient to fund the additional formulaic allocation percentage in excess of the pre-
existing 40%, 43%, and 65% carry pool percentages, and therefore no incremental expense was recognized as of such date.
The carry pool percentage applicable for all funds that closed prior to December 31, 2023 will not be less than their applicable
carry pool percentages of 40%, 43%, or 65% prior to December 31, 2023 (for funds that closed after December 31, 2020 but
before December 31, 2023, the carry pool percentage was fixed at 65%; for funds that closed after June 30, 2017 but before
December 31, 2020, the carry pool percentage was fixed at 43%; and the carry pool percentage was fixed at 40% for older
funds that contributed to KKR's carry pool), and will not be more than 80%. The intent of this modification is that for all funds
that closed prior to January 2, 2024, upon the final liquidation of each fund, realized carried interest distributed will equal the
historical fund carry pool allocations up to the high water mark and only distributions of realized carried interest in excess of
the high water mark will be distributed at 80 percent if and only if the unrealized carried interest balance at any period end
exceeds the high water mark. Under no circumstance would a distribution of carried interest exceed 80% of the total allocable
carried interest at any time.
KKR accounts for the carry pool as a compensatory profit-sharing arrangement in Accrued Expenses and Other Liabilities
within the accompanying consolidated statements of financial condition in conjunction with the related carried interest
income and it is recorded as compensation expense. The liability that is recorded in each period reflects the legal entitlement
of Associates Holdings at each point in time should the total unrealized carried interest be realized at the value recorded at
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each reporting date. Upon a reversal of carried interest income, the related carry pool allocation, if any, is also reversed.
Accordingly, such compensation expense is subject to both positive and negative adjustments.
On the Sunset Date (which will not be later than December 31, 2026), KKR will acquire control of Associates Holdings and
will commence making decisions regarding the allocation of the carry proceeds pursuant to the limited partnership agreement
of Associates Holdings. Until the Sunset Date, our Co-Founders will continue to make decisions regarding the allocation of the
carry proceeds to themselves and others, pursuant to the limited partnership agreement of Associates Holdings, provided that
any allocation of carry proceeds to the Co-Founders will be on a percentage basis consistent with past practice. For additional
information about the Sunset Date and the Reorganization Agreement, see Note 1 "Organization" in our financial statements
included in this report.
Equity-based Compensation
In addition to the cash-based compensation and carry pool allocations as described above, employees receive equity
awards under our Equity Incentive Plan, most of which are subject to service-based vesting typically over a three to five-year
period from the date of grant, and some of which are also subject to the achievement of market-based conditions. Certain of
these awards are subject to post-vesting transfer restrictions and minimum retained ownership requirements.
Compensation expense relating to the issuance of equity-based awards is measured at fair value on the grant date. In
determining the aggregate fair value of any award grants, we make judgments as to the grant-date fair value, particularly for
certain equity awards with a vesting condition based upon market conditions, whose grant date fair values are based on a
probability distributed Monte-Carlo simulation. See Note 19 "Equity-Based Compensation,” in our financial statements
included in this report for further discussion and activity of these awards.
Investment Income (Loss) – Net Gains (Losses) from Investment Activities
Net gains (losses) from investment activities consist of realized and unrealized gains and losses arising from our
investment activities as well as income earned from certain equity method investments. Fluctuations in net gains (losses) from
investment activities between reporting periods is driven primarily by changes in the fair value of our investment portfolio as
well as the realization of investments. The fair value of, as well as the ability to recognize gains from, our investments is
significantly impacted by the global financial markets, which, in turn, affects the net gains (losses) from investment activities
recognized in any given period. Upon the disposition of an investment, previously recognized unrealized gains and losses are
reversed and an offsetting realized gain or loss is recognized in the current period. Since our investments are carried at fair
value, fluctuations between periods could be significant due to changes to the inputs to our valuation process over time. For a
further discussion of our fair value measurements and fair value of investments, see above "—Critical Accounting Policies and
Estimates—Fair Value Measurements."
Critical Accounting Policies and Estimates – Insurance
Policy Liabilities
Policy liabilities, or collectively, “reserves,” are the portion of past premiums or assessments received that are set aside to
meet future policy and contract obligations as they become due. Interest accrues on the reserves and on future premiums,
which may also be available to pay for future obligations. Global Atlantic establishes reserves to pay future policy benefits,
claims, and certain expenses for its life policies and annuity contracts.
Global Atlantic’s reserves are estimated based on models that include many actuarial assumptions and projections. These
assumptions and projections, which are inherently uncertain, involve significant judgment, including assumptions as to the
levels and/or timing of premiums, benefits, claims, expenses, interest credits, investment results (including equity market
returns), mortality, longevity, and persistency.
The assumptions on which reserves are based are intended to represent an estimation of experience for the period that
policy benefits are payable. Global Atlantic reviews the adequacy of its reserves and the assumptions underlying those
reserves at least annually. Global Atlantic cannot, however, determine with precision the amount or the timing of actual
benefit payments. If actual experience is better than or equal to the assumptions, then reserves would be adequate to
provide for future benefits and expenses. If experience is worse than the assumptions, additional reserves may be required to
meet future policy and contract obligations. This would result in a charge to Global Atlantic's net income during the period in
which excess benefits are paid or an increase in reserves occurs.
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For a majority of Global Atlantic’s in-force policies, including its interest-sensitive life policies and most annuity contracts,
the base policy reserve is equal to the account value. For these products, the account value represents Global Atlantic’s
obligation to repay to the policyholder the amounts held with Global Atlantic on deposit. However, there are several
significant blocks of business where policy reserves, in addition to the account value, are explicitly calculated, including
variable annuities, fixed-indexed annuities, interest-sensitive life products (including those with secondary guarantees), and
preneed policies.
Market Risk Benefits
Market risk benefits are contracts or contract features that both provide protection to the policyholder from other-than-
nominal capital market risk and expose Global Atlantic to other-than-nominal capital market risk. Market risk benefits include
certain contract features on fixed annuity and variable annuity products, including minimum guarantees to policyholders,
such as guaranteed minimum death benefits ("GMDBs"), guaranteed minimum withdrawal benefits ("GMWBs"), and long-
term care benefits (which are capped at the return of account value plus one or two times the account value).
Some of Global Atlantic's variable annuity and fixed-indexed annuity contracts contain a GMDB feature that provides a
guarantee that the benefit received at death will be no less than a prescribed minimum amount, even if the account balance
is reduced to zero. This amount is based on either the net deposits paid into the contract, the net deposits accumulated at a
specified rate, the highest historical account value on a contract anniversary, or sometimes a combination of these values. If
the GMDB is higher than the current account value at the time of death, Global Atlantic incurs a cost equal to the difference.
Global Atlantic issues fixed-indexed annuity and variable annuity contracts with a guaranteed minimum withdrawal
feature. GMWB are an optional benefit where the contract owner is entitled to withdraw a maximum amount of their benefit
base each year.
Once exercised, living benefit features provide annuity policyholders with a minimum guaranteed stream of income for
life. A policyholder’s annual income benefit is generally based on an annual withdrawal percentage multiplied by the benefit
base. The benefit base is defined in the policy and is generally the initial premium, reduced by any partial withdrawals and
increased by a defined percentage, formula, or index credits. Any living benefit payments are first deducted from the account
value. Global Atlantic is responsible for paying any excess guaranteed living benefits still owed after the account value has
reached zero.
The ultimate cost of these benefits will depend on the level of market returns and the level of contractual guarantees, as
well as policyholder behavior, including surrenders, withdrawals, and benefit utilization. For Global Atlantic's fixed-indexed
annuity products, costs also include certain non-guaranteed terms that impact the ultimate cost, such as caps on crediting
rates that Global Atlantic can, in its discretion, reset annually.
See Note 17 “Policy Liabilities” in our financial statements for additional information.
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As of December 31, 2025, the net market risk liability balance totaled $1.3 billion. As of December 31, 2025, the liability
balances for market risk benefits were $1.1 billion for fixed-indexed annuities and $197.5 million for variable and other
annuities. The increase (decrease) to the net market risk benefit liability balance as a result of hypothetical changes in interest
rates, instrument-specific credit risk, equity market prices, expected mortality, and expected surrenders are summarized in
the table below. This sensitivity considers the direct effect of such changes only and not changes in any other assumptions
used in or items considered in the measurement of such balances.
As of December 31, 2025 | ||||
($ in thousands) | Fixed-Indexed Annuity | Other | ||
Balance | $1,140,823 | $197,486 | ||
Hypothetical Change: | ||||
+50 bps Interest Rates | (154,530) | (36,107) | ||
-50 bps Interest Rates | 171,718 | 40,289 | ||
+50 bps Instrument-specific Credit Risk | (155,371) | (18,636) | ||
-50 bps Instrument-specific Credit Risk | 172,026 | 20,306 | ||
+10% Equity Market Prices | (68,795) | (40,472) | ||
-10% Equity Market Prices | 54,092 | 45,487 | ||
95% of Expected Mortality | 63,415 | 3,848 | ||
105% of Expected Mortality | (59,630) | (3,315) | ||
90% of Expected Surrenders | 31,479 | 1,368 | ||
110% of Expected Surrenders | (29,997) | (1,347) | ||
Note: Hypothetical changes to the market risk benefits liability balance do not reflect the impact of related hedges.
Policy Liabilities Accounted for Under a Fair Value Option
Variable annuity contracts offered and assumed by Global Atlantic provide the contractholder with a GMDB. The liabilities
for these benefits are included in policy liabilities. Global Atlantic elected the fair value option to measure the liability for
certain of these variable annuity contracts valued at $258.8 million as of December 31, 2025. Fair value is calculated as the
present value of the estimated death benefits less the present value of the GMDB fees, using 1,000 risk neutral scenarios.
Global Atlantic discounts the cash flows using the U.S. Treasury rates plus an adjustment for instrument-specific credit risk in
the consolidated statement of financial condition. The change in the liabilities for these benefits is included in policy benefits
and claims in the consolidated statement of operations.
As of December 31, 2025, variable annuities accounted for using the fair value option totaled $258.8 million. The increase
(decrease) in the reserves for variable annuities accounted for using the fair value option as a result of hypothetical changes in
interest rates, instrument-specific credit risk, equity market prices, expected mortality, and expected surrenders are
summarized in the table below. This sensitivity considers the direct effect of such changes only and not changes in any other
assumptions used in or items considered in the measurement of such balances.
As of December 31, 2025 | ||
($ in thousands) | Variable Annuities | |
Balance | $258,805 | |
Hypothetical Change: | ||
+50 bps Interest Rates | (17,208) | |
-50 bps Interest Rates | 18,620 | |
+50 bps Instrument-specific Credit Risk | (10,391) | |
-50 bps Instrument-specific Credit Risk | 10,753 | |
+10% Equity Market Prices | (13,142) | |
-10% Equity Market Prices | 15,683 | |
95% of Expected Mortality | (4,736) | |
105% of Expected Mortality | 4,528 | |
90% of Expected Surrenders | 65 | |
110% of Expected Surrenders | (94) |
Note: Hypothetical changes to the liability balances do not reflect the impact of related hedges.
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Liability for Future Policyholder Benefits
A liability for future policy benefits, which is the present value of estimated future policy benefits to be paid to or on
behalf of policyholders and certain related expenses less the present value of estimated future net premiums to be collected
from policyholders, is accrued as premium revenue is recognized. The liability is estimated using current assumptions that
include mortality, morbidity, lapses, and expenses. These current assumptions are based on judgments that consider Global
Atlantic’s historical experience, industry data, and other factors, and are updated quarterly and the current period change in
the liability is recognized as a separate component of benefit expense in the consolidated income statement.
As of December 31, 2025, the liability for future policy benefits totaled $14.3 billion, net of reinsurance, split between
$12.4 billion associated with payout annuity products, and $1.9 billion of life and other insurance products (including assumed
long-term care insurance where Global Atlantic retroceded mortality and morbidity risks to a third-party reinsurer). The
increase (decrease) as a result of hypothetical changes in interest rates, credit spreads, expected mortality, and expected
surrenders and lapses are summarized in the table below. This sensitivity considers the direct effect of such changes only and
not changes in any other assumptions used in or items considered in the measurement of such balances.
As of December 31, 2025 | ||||
($ in thousands) | Payout Annuities | Other | ||
Balance | $12,403,341 | $1,866,615 | ||
Hypothetical Change: | ||||
+50 bps Interest Rates | (218,356) | (435,230) | ||
-50 bps Interest Rates | 234,370 | 469,003 | ||
+50 bps Credit Spreads | (166,860) | (317,644) | ||
-50 bps Credit Spreads | 172,941 | 330,598 | ||
95% of Expected Mortality(1) | 77,428 | 45,734 | ||
105% of Expected Mortality(1) | (73,528) | (43,528) | ||
90% of Expected Surrenders/Lapses | — | (9,715) | ||
110% of Expected Surrenders/Lapses | — | 8,744 | ||
Note: Hypothetical changes to the liability for future policy benefits balance do not reflect the impact of related hedges.
(1)Includes decrements for terminations of disability insurance.
Additional Liability for Annuitization, Death, or Other Insurance Benefits: No-Lapse Guarantees
Global Atlantic has in-force interest-sensitive life contracts where it provides a secondary guarantee to the policyholder.
The policy can remain in-force, even if the base policy account value is zero, as long as contractual secondary guarantee
requirements have been met. The primary risk to Global Atlantic is that the premium collected under these policies, together
with the investment return Global Atlantic earns on that premium, is ultimately insufficient to pay the policyholder’s benefits
and the expenses associated with issuing and administering these policies. Global Atlantic holds an additional reserve in
connection with these guarantees.
The additional reserves related to interest-sensitive life products with secondary guarantees are calculated using
methods similar to those described above under “—Critical Accounting Policies and Estimates – Insurance—Policy Liabilities—
Market Risk Benefits.” The costs related to these secondary guarantees are recognized over the life of the contracts through
the accrual and subsequent release of a reserve which is revalued each period. The reserve is calculated based on
assessments, over a range of economic scenarios to incorporate the variability in the obligation that may occur under
different environments. The change in the reserve is included in policy benefits and claims in the consolidated statements of
operations.
As of December 31, 2025, the additional liability balance of primarily interest-sensitive life totaled $6.2 billion, net of
reinsurance. The increase (decrease) to the additional liability balance, as a result of hypothetical changes in interest rates,
equity market prices, annual equity growth, expected mortality, and expected surrenders are summarized in the table below.
This sensitivity considers the direct effect of such changes only and not changes in any other assumptions used in or items
considered in the measurement of the interest-sensitive life no-lapse guarantee liability balance.
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As of December 31, 2025 | ||
($ in thousands) | Interest-Sensitive Life | |
Balance | $6,168,750 | |
Hypothetical Change: | ||
+50 bps Interest Rates | 1,690 | |
-50 bps Interest Rates | (1,689) | |
+10% Equity Market Prices | (1,365) | |
-10% Equity Market Prices | 1,211 | |
1% Lower Annual Equity Growth | 6,942 | |
95% of Expected Mortality | (51,329) | |
105% of Expected Mortality | 50,561 | |
90% of Expected Surrenders | 22,909 | |
110% of Expected Surrenders | (22,410) |
Note: Hypothetical changes to the interest-sensitive life additional liability for annuitization, death, or other insurance benefits balance do not reflect the
impact of related hedges.
Embedded Derivatives in Policy Liabilities and Funds Withheld
Global Atlantic's fixed-indexed annuity, variable annuity, and indexed universal life products contain equity-indexed
features, which are considered embedded derivatives and are required to be measured at fair value.
Global Atlantic calculates the embedded derivative as the present value of future projected benefits in excess of the
projected guaranteed benefits, using an option budget as the indexed account value growth rate. In addition, the fair value of
the embedded derivative is reduced to reflect instrument specific credit risk on Global Atlantic's obligation (that is, Global
Atlantic's own credit risk).
Changes in interest rates, future index credits, instrument-specific credit risk, projected withdrawal and surrender
activity, and mortality on fixed-indexed annuity and interest-sensitive life products can have a significant impact on the value
of the embedded derivative.
Valuation of Embedded Derivatives – Fixed-Indexed Annuities
Fixed-indexed annuity contracts allow the policyholder to elect a fixed interest rate of return or a market indexed strategy
where interest credited is based on the performance of an index, such as the S&P 500 Index, or other indexes. The market
indexed strategy is an embedded derivative, similar to a call option. The fair value of the embedded derivative is computed as
the present value of benefits attributable to the excess of the projected policy contract values over the projected minimum
guaranteed contract values. The projections of policy contract values are based on assumptions for future policy growth,
which include assumptions for expected index credits, future equity option costs, volatility, interest rates, and policyholder
behavior. The projections of minimum guaranteed contract values include the same assumptions for policyholder behavior as
are used to project policy contract values. The embedded derivative cash flows are discounted using a risk-free interest rate
increased by instrument-specific credit risk tied to Global Atlantic's own credit rating.
Valuation of Embedded Derivatives – Interest-Sensitive Life Products
Interest-sensitive life products allow a policyholder’s account value to grow based on the performance of certain equity
indexes, which results in an embedded derivative similar to a call option. The embedded derivative related to the index is
bifurcated from the host contract and measured at fair value. The valuation of the embedded derivative is the present value
of future projected benefits in excess of the projected guaranteed benefits, using the option budget as the indexed account
value growth rate and the guaranteed interest rate as the guaranteed account value growth rate. Present values are based on
discount rate curves determined at the valuation date or issue date as well as assumed lapse and mortality rates. The discount
rate equals the forecast treasury rate increased by instrument-specific credit risk tied to Global Atlantic’s own credit rating.
Changes in discount rates and other assumptions such as spreads and/or option budgets can have a substantial impact on the
embedded derivative.
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Valuation of Embedded Derivatives in Modified Coinsurance or Funds Withheld
Global Atlantic's reinsurance agreements include modified coinsurance and coinsurance with funds withheld
arrangements that include terms that require payment by the ceding company of a principal amount plus a return that is
based on a proportion of the ceding company’s return on a designated portfolio of assets. Because the return on the funds
withheld receivable or payable is not clearly and closely related to the host insurance contract, these contracts are deemed to
contain embedded derivatives, which are measured at fair value. Global Atlantic is exposed to both the interest rate and
credit risk of the assets. Changes in discount rates and other assumptions can have a significant impact on this embedded
derivative. The fair value of the embedded derivatives is included in the funds withheld receivable at interest and funds
withheld payable at interest line items on our consolidated statement of financial condition. The change in the fair value of
the embedded derivatives is recorded in net investment-related gains (losses) in the consolidated statement of operations.
As of December 31, 2025, the embedded derivative liability balance totaled $7.4 billion for fixed-indexed annuities, and
$485.0 million for interest-sensitive life. The increase (decrease) to the embedded derivatives on fixed-indexed annuity and
indexed universal life as a result of hypothetical changes in interest rates, credit spreads, and equity market prices are
summarized in the table below. This sensitivity considers the direct effect of such changes only and not changes in any other
assumptions used in or items considered in the measurement of such balances.
As of December 31, 2025 | ||||
($ in thousands) | Fixed-Indexed Annuities | Interest Sensitive Life | ||
Balance | $7,355,480 | $485,025 | ||
Hypothetical Change: | ||||
+50 bps Interest Rates | (114,795) | (4,764) | ||
-50 bps Interest Rates | 120,381 | 4,962 | ||
+50 bps Credit Spreads | (147,200) | (4,764) | ||
-50 bps Credit Spreads | 152,548 | 4,962 | ||
+10% Equity Market Prices | 699,869 | 27,081 | ||
-10% Equity Market Prices | (751,468) | (61,947) | ||
Note: Hypothetical changes to the market risk benefits liability balance do not reflect the impact of related hedges.
As of December 31, 2025, the embedded derivative balance for modified coinsurance or funds withheld arrangements
was a $2.4 billion net asset ($78.9 million in funds withheld receivables at interest, and $(2.3) billion in funds withheld payable
at interest). The increase (decrease) to the embedded derivatives on fixed-indexed annuity and interest-sensitive life products
as a result of hypothetical changes in interest rates and investment credit spreads are summarized in the table below. This
sensitivity considers the direct effect of such changes only and not changes in any other assumptions used in or items
considered in the measurement of such balances.
As of December 31, 2025 | ||||
($ in thousands) | Embedded Derivative on Funds Withheld Receivable | Embedded Derivative on Funds Withheld Payable | ||
Balance | $78,858 | $(2,275,854) | ||
Hypothetical Change: | ||||
+50 bps Interest Rates | (3,602) | (1,327,612) | ||
-50 bps Interest Rates | 8,729 | 1,403,934 | ||
+50 bps Investment Credit Spreads | (43,570) | (1,377,343) | ||
-50 bps Investment Credit Spreads | 43,570 | 1,453,665 | ||
Note: Hypothetical changes to the funds withheld receivable and payable embedded derivative balances do not reflect the impact of related hedges or trading
assets which back the funds withheld at interest.
Recently Issued Accounting Pronouncements
For a full discussion of recently issued accounting pronouncements, see Note 2 "Summary of Significant Accounting
Policies" in our financial statements included in this report.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposure to market risks for KKR's asset management and strategic holdings businesses, on a GAAP basis, primarily
relates to movements in one or more of the fair value of investments, including the effect that those movements have on our
management fees, carried interest, and net gains from investment activities. Our exposure to market risks in our insurance
segment, on a GAAP basis, primarily relates to the impact of movements in such market risks on our insurance segment’s
assets, liabilities, and hedge program.
The fair value of investments may fluctuate in response to changes in the values of investments, foreign currency
exchange rates, and interest rates. Additionally, interest rate movements can adversely impact the amount of interest income
we receive on credit instruments bearing variable rates and could also impact the amount of interest that we pay on debt
obligations bearing variable rates. KKR has material exposure to market volatility in interest rates, credit spreads, and equity
prices through its insurance liabilities, many of which are structured to have exposure to market level changes, its investment
portfolio, and its hedge program. The quantitative information provided in this section was prepared using estimates and
assumptions that management believes are appropriate for purposes of evaluating the significant market risk exposures for
KKR's businesses and the impact they could have on our consolidated GAAP financial results. The actual impact of a
hypothetical adverse movement in these risks could be materially different from the amounts shown below.
The Board of Directors is responsible for oversight and the overall governance of KKR. Our Board of Directors has five
standing committees: an Audit Committee, a Risk Committee, a Conflicts Committee, a Nominating and Corporate
Governance Committee, and an Executive Committee, and they are aided by various management-level committees designed
to manage enterprise risks. For further information about KKR & Co. Inc.'s Board of Directors or its committees, see “Part III—
Item 10. Directors, Executive Officers, and Corporate Governance—Board Committees.”
Management of Enterprise Risk
Through enterprise risk management, we manage market risk and general business risks. Risk categories we monitor
include financial, insurance, tax, investment, hedge management, operational, cybersecurity, geopolitical, reputational, legal,
compliance, and regulatory risks, each within established risk limits and tolerances for our balance sheet, investment vehicles,
and investments.
Management of Market Risk
KKR has a Balance Sheet Committee consisting of senior employees, including our Co-Executive Chairmen, our Co-Chief
Executive Officers, and the Chief Financial Officer, which meets periodically to review the financial activities of KKR. Members
of the Balance Sheet Committee oversee and manage KKR's balance sheet assets and liabilities, including capital structure,
capital allocation, and liquidity. In addition, certain members of the Balance Sheet Committee through a firmwide risk
committee oversee and manage KKR’s market risks and liabilities, including investment-related liabilities, hedging activities,
and insurance risks.
Certain securities transactions by our capital markets business are subject to risk tolerance limits, regulatory capital
requirements, and the review and approval of one or more committees in compliance with rules applicable to broker-dealers
pursuant to the Exchange Act. When our capital is committed to capital markets transactions after diligence is conducted,
such transactions are subject to the review and approval of a capital markets underwriting committee. These transactions are
also subject to risk tolerance limits. The risk tolerance limits establish the level of investment we may make in a single
company or type of transaction, for example, and are designed to avoid undue concentration and risk exposure. Regulatory
capital requirements also place limits on the size of securities underwritings the capital markets business can conduct based
on quantitative measure of assets, liabilities, and certain off-balance-sheet items. Aggregate balance sheet risk and capital
deployed for transactions are monitored on an ongoing basis by or on behalf of members of the Balance Sheet Committee.
With respect to the funds and other investment vehicles through which we make investments for our fund investors, KKR
manages investment risks by subjecting transactions to the review and approval of an applicable investment committee or
portfolio manager; a portfolio management committee (or other designated senior employees) then regularly monitors these
investments. Before making an investment, investment professionals endeavor to identify risks in due diligence, evaluating,
among other things, business, financial, legal and regulatory issues, financial data, and other information relevant to a
particular investment. An investment team presents the investment and its identified risks to an investment committee or a
portfolio manager, which must approve each investment before it may be made. If an investment is made, a portfolio
management committee (or other designated senior employees) is responsible for working with our investment professionals
to monitor the investment on an ongoing basis.
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We also manage market risks that relate to our insurance business through a board of directors and management team
specifically focused on Global Atlantic. For more information, see "Management of Insurance Business" below.
Management of General Business Risk
KKR has a Risk and Operations Committee comprised of senior employees from across our asset management and
insurance businesses and operating functions, and it includes our Chief Financial Officer, Chief Legal Officer and General
Counsel, Chief Compliance Officer, and other senior employees. The Risk and Operations Committee provides oversight and
management of KKR’s significant operating and business risks. This committee is aided by various other committees focused
on the oversight of risks to our business, including a Global Conflicts and Compliance Committee.
KKR’s Global Conflicts and Compliance Committee is comprised of senior employees from across our asset management
business and operations, and it includes, among others, our Chief Financial Officer, Chief Legal Officer and General Counsel,
and Chief Compliance Officer. The Global Conflicts and Compliance Committee focuses on new or potential conflicts of
interest that may arise in KKR's business, including, but not limited to, conflicts relating to specific transactions as well as
potential conflicts involving the overall activities of KKR and its various businesses. This committee also reviews and monitors
certain compliance matters.
In addition, KKR has other committees comprised of senior employees from across our business and operations that
consider potential risks to our business.
Management of Insurance Business
The oversight and governance of our insurance business is aided by a board of directors at TGAFG, which is the holding
company for our insurance business. The TGAFG board includes among its members one of our Co-Chief Executive Officers
and our Chief Financial Officer. To assist with its oversight of Global Atlantic, the TGAFG board of directors has established
various committees, including audit, risk, and special transaction review. The TGAFG Risk Committee has adopted risk
appetite principles as part of its enterprise risk management program, including endeavoring to protect policyholders by
seeking to maintain adequate capital and liquidity resources to honor our obligations to policyholders under situations
reflecting stress scenarios calibrated to the worst modern economic cycles. Global Atlantic's management-level committees
also evaluate and oversee certain risks affecting our insurance business, including Global Atlantic’s Financial Risk Committee,
Firmwide Executive Review Committee and Insurance Operating Committees, each of which consists of senior employees
from across our insurance and asset management businesses.
For a discussion of Global Atlantic's hedge program, see "—Insurance Segment Market Risks—Hedge Program" below.
Asset Management and Strategic Holdings Segment Market Risks
The following is a discussion of the significant market risk exposures for KKR's asset management and strategic holdings
businesses and the impact they could have on our consolidated GAAP financial results.
Hedge Program
To manage market risk, KKR maintains hedging programs that seek to mitigate economic impacts primarily from
movements in foreign exchange rates, interest rates, and other market variables. These hedging activities are conducted at
both the fund level and the KKR balance sheet level and vary based on the nature of the underlying exposure and investment
strategy.
With respect to foreign exchange risk, KKR is exposed to currency fluctuations primarily through non-U.S. dollar
investments held by our funds and balance sheet, as well as through foreign currency share classes offered by certain funds.
KKR generally seeks to hedge a portion of these foreign exchange exposures through currency forwards and options. Such
hedges are typically designed to reduce the volatility associated with changes in foreign exchange rates rather than to
eliminate all currency risk and may be implemented on a static or rolling basis depending on the underlying exposure.
With respect to interest rate risk, KKR is exposed primarily through portfolio company financing arrangements. At the
portfolio company level, interest rate hedging is generally intended to reduce variability in cash flows associated with floating-
rate indebtedness.
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KKR is also exposed to credit and equity market risk, primarily in connection with capital markets warehousing and
syndication activities. In these contexts, KKR may enter into hedges designed to limit short-term market risks to the economic
value of such exposures, including the use of credit and equity derivatives.
From time to time, KKR also enters into hedges designed to limit the volatility associated with changes in the value of its
balance sheet investments or earnings as a result of broader market movements, including changes in interest rates, credit
spreads, or equity markets, while taking into consideration holistic economic impacts.
KKR’s hedge programs are not designed to, and may not be effective in, offsetting all impacts to net income, assets under
management, or economic values. Movements in market variables that are not explicitly hedged, as well as basis risk,
counterparty risk, liquidity constraints, and imperfect correlation between hedges and underlying exposures, may result in
volatility in KKR’s results. See “Risk Factors—Risks Related to Our Business—The failure to manage our financial and
enterprise risks could materially and adversely affect our financial condition and results of operation.”
Sensitivities
Changes in Fair Value
The majority of our investments as of December 31, 2025, are reported at fair value. Net changes in the fair value of
investments impact the net gains (losses) from investment activities in our consolidated statements of operations. Based on
investments held as of December 31, 2025, we estimate that an immediate 10% decrease in the fair value of investments
generally would result in a commensurate change in the amount of net gains (losses) from investment activities (except that
carried interest would likely be more significantly impacted), regardless of whether the investment was valued using
observable market prices or management estimates with significant unobservable pricing inputs. The impact that the
consequential decrease in investment income would have on net income attributable to KKR & Co. Inc. would generally be
significantly less than the amount described above, given that a significant portion of the change in fair value would be
attributable to noncontrolling interests and therefore we are only impacted to the extent of our carried interest and our
balance sheet investments and to a lesser extent our management fees. Because of this, the quantitative information that
follows represents the impact that a reduction to each of the income streams shown below would have on net income
attributable to KKR & Co. Inc. before income taxes. The actual impact to individual line items within the consolidated
statements of operations would differ from the amounts shown below as a result of (i) the elimination of management fees
and carried interest as a result of the consolidation of certain investment funds and CFEs and (ii) the gross-up of net gains
(losses) from investment activities, in each case as a result of the consolidation of certain investment funds and CFEs.
Based on the fair value of investments as of December 31, 2025 and December 31, 2024, we estimate that an immediate,
hypothetical 10% decline in the fair value of investments would result in declines in net income attributable to KKR & Co. Inc.
before income taxes in 2025 and 2024 from reductions in the following items, if not offset by other factors:
December 31, 2025 | December 31, 2024 | ||||
($ in thousands) | Hypothetical 10% Decline in Fair Value of Investments (1) | Hypothetical 10% Decline in Fair Value of Investments (1) | |||
Management Fees | $82,516 | (2) | $60,782 | (2) | |
Carried Interest, Net of Carry Pool Allocation | $549,627 | (3)(4) | $442,171 | (3)(4) | |
Net Gains/(Losses) From Investment Activities Including General Partner Capital Interest | $2,003,440 | (3) | $1,890,459 | (3) |
(1)An immediate, hypothetical 10% decline in the fair value of investments would also impact our ability to earn incentive fees. Since the majority of our
incentive fees are not subject to clawback, a 10% decline in fair value would generally result in the recognition of no incentive fees on a prospective basis
and result in lower net income relative to prior years where such incentive fees may have been earned.
(2)Represents an annualized reduction in management fees.
(3)Decrease would impact our statement of operations in a single quarter. With respect to carried interest, for purposes of this analysis the impact of
preferred returns are ignored.
(4)Effective January 2, 2024, KKR is authorized to apply a carry pool percentage in excess of the fixed percentages of up to 80% for all funds. Please see "—
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Asset
Management and Strategic Holdings" for further discussion related to the changes in our carry pool.
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Management Fees
Our management fees in our Private Equity and Real Assets business lines are generally calculated based on the amount
of capital committed or invested by a fund, as described under "—Business—Our Business—Private Equity" and "—Business
—Our Business—Real Assets." Accordingly, movements in the fair value of investments do not significantly affect the amount
of fees we may charge in Private Equity and Real Assets funds.
In the case of our Credit and Liquid Strategies business line, management fees are often calculated based on the average
NAV of the fund for that particular period, although certain funds in our Credit and Liquid Strategies business line have
management fees based on the amount of capital invested. In the case of our CLO vehicles, management fees are calculated
based on the collateral of the vehicle. The collateral is based on the par value of the investments and cash on hand.
To the extent that management fees are calculated based on the NAV of the fund's investments, the amount of fees that
we may charge will increase or decrease in direct proportion to the effect of changes in the fair value of the fund's
investments. The proportion of our management fees that are based on NAV depends on the number and type of funds in
existence. For the years ended December 31, 2025 and 2024, the fund management fees that were recognized based on the
NAV of the applicable funds was approximately 20% and 18%, respectively.
Publicly Traded Securities
We and our investment vehicles hold certain investments in companies whose securities are publicly traded. The market
prices of securities may be volatile and are likely to fluctuate due to a number of factors beyond our control. These factors
include actual or anticipated fluctuations in the quarterly and annual results of such companies or of other companies in the
industries in which they operate, market perceptions concerning the availability of additional securities for sale, general
economic, social or political developments, industry conditions, changes in government regulation, shortfalls in operating
results from levels forecasted by securities analysts, the general state of the securities markets, and other material events,
such as significant management changes, re-financings, acquisitions, and dispositions. In addition, although a substantial
portion of our investments are comprised of investments in portfolio companies whose securities are not publicly traded, the
value of these privately held investments may also fluctuate as our Level III investments are valued in part using a market
comparables analysis. Consequently, due to similar factors beyond our control as described above for portfolio companies
whose securities are publicly traded, the value of these Level III investments may fluctuate with market prices. See the "Risk
Factors" section of this report and "Management's Discussion and Analysis of Financial Condition and Results of Operations—
Business Environment."
Exchange Rate Risk
Our investment vehicles and KKR's balance sheet hold investments denominated in currencies other than the U.S. dollar.
Those investments expose us and our fund investors to the risk that the value of the investments will be affected by changes
in exchange rates between the currency in which the investments are denominated and the currency in which the
investments are made. Additionally, a portion of our management fees are denominated in non-U.S. dollar currencies. Our
policy is to generally reduce these risks by employing hedging techniques, including using foreign currency options and foreign
exchange forward contracts to reduce exposure to future changes in exchange rates when a meaningful amount of capital has
been invested in currencies other than the currencies in which the investments are denominated.
Our primary exposure to exchange rate risk relates to movements in the value of exchange rates between the U.S. dollar
and other currencies in which our investments are denominated (including euros, British pounds, Japanese yen, among
others), net of the impact of foreign exchange hedging strategies. The quantitative information that follows represents the
impact that a reduction to each of the income streams shown below would have on net income attributable to KKR & Co. Inc.
before income taxes. The actual impact to individual line items within the statements of operations would differ from the
amounts shown below as a result of (i) the elimination of carried interest as a result of the consolidation of certain investment
funds and (ii) the gross-up of net gains (losses) from investment activities, in each case as a result of the consolidation of
certain investment funds and CLO vehicles.
We estimate that an immediate, hypothetical 10% decline in the exchange rates between the U.S. dollar and all of the
major foreign currencies in which our investments were denominated as of December 31, 2025 and December 31, 2024 (i.e.,
an increase in the value of the U.S. dollar against these foreign currencies) would result in declines in net income attributable
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to KKR & Co. Inc. before income taxes in 2025 and 2024 from reductions in the following items, net of the impact of foreign
exchange hedging strategies, if not offset by other factors:
December 31, 2025 | December 31, 2024 | ||||
($ in thousands) | Hypothetical 10% Decline in Foreign Currencies Against the U.S. Dollar (1) | Hypothetical 10% Decline in Foreign Currencies Against the U.S. Dollar (1) | |||
Carried Interest, Net of Carry Pool Allocation | $91,218 | (2)(3) | $96,897 | (2)(3) | |
Net Gains/(Losses) From Investment Activities Including General Partner Capital Interest | $186,175 | (2) | $241,074 | (2) |
(1)An immediate, hypothetical 10% decline in exchange rates between the U.S. dollar and all of the major foreign currencies in which our investments were
denominated would not be expected to materially impact our management fees or incentive fees. The majority of our funds in which we are entitled to
earn incentive fees are denominated in U.S. dollars. Additionally, our management fees that are denominated in non-U.S. dollar currencies are generally
hedged.
(2)Decrease would impact our statement of operations in a single quarter. With respect to carried interest, for purposes of this analysis the impact of
preferred returns are ignored.
(3)Effective January 2, 2024, KKR is authorized to apply a carry pool percentage in excess of the fixed percentages of up to 80% for all funds. Please see "—
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Asset
Management and Strategic Holdings" for further discussion related to the changes in our carry pool.
Interest Rate Risk
Valuation of Investments
Changes in credit markets and in particular, interest rates, can impact investment valuations, particularly our Level III
investments, and may have offsetting results depending on the valuation methodology used. For example, we typically use a
discounted cash flow analysis as one of the methodologies to ascertain the fair value of our investments that do not have
readily observable market prices. If applicable interest rates rise, then the assumed cost of capital for those portfolio
companies would be expected to increase under the discounted cash flow analysis, and this effect would negatively impact
their valuations if not offset by other factors. Conversely, a fall in interest rates can positively impact valuations of certain
portfolio companies if not offset by other factors. These impacts could be substantial depending upon the magnitude of the
change in interest rates. In certain cases, the valuations obtained from the discounted cash flow analysis and the other
primary methodology we use, the market multiples approach, may yield different and offsetting results. For example, the
positive impact of falling interest rates on discounted cash flow valuations may offset the negative impact of the market
multiples valuation approach and may result in less of a decline in value than for those investments that had a readily
observable market price. Finally, low interest rates related to monetary stimulus and economic stagnation may also negatively
impact expected returns on all investments, as the demand for relatively higher return assets increases and supply decreases.
Interest Income
We and certain consolidated investment vehicles, including CLOs, hold credit investments that generate interest income
based on variable interest rates. We are exposed to interest rate risk relating to investments that generate yield since a
meaningful portion of credit investments held by us and our consolidated investment vehicles, including CLOs, earn income
based on variable interest rates. The impact on net income attributable to KKR & Co. Inc. resulting from a decrease of a
hypothetical 100 basis points in variable interest rates used in the recognition of interest income would not be expected to be
material since a substantial portion of this decrease would be attributable to noncontrolling interests and CLO third party
noteholders.
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Interest Expense
We and certain consolidated investment vehicles, including CLOs, have debt obligations that include revolving credit
agreements, certain investment financing arrangements, and debt securities issued by CLO vehicles that accrue interest at
variable rates. Changes in these rates would affect the amount of interest payments that our consolidated investment
vehicles, including CLOs, would have to make. With respect to consolidated investment vehicles and CLOs, the impact on net
income attributable to KKR & Co. Inc. resulting from an increase of a hypothetical 100 basis points in variable interest rates
used in the recognition of interest expense would not be expected to be material since a substantial portion of this increase
would be attributable to noncontrolling interests and third-party CLO noteholders. Our policy is to reduce these risks by
employing hedging techniques, including using interest rate swaps. The impact on net income attributable to KKR & Co. Inc.
resulting from an increase of a hypothetical 100 basis points in variable interest rates used in the recognition of interest
expense, net of the impact of interest rate hedging strategies, would not be expected to be material. Additionally, debt issued
or guaranteed by KKR & Co. Inc. generally accrues interest at fixed rates.
Credit Risk
We are party to agreements providing for various financial services and transactions that contain an element of risk in the
event that the counterparties are unable to meet the terms of such agreements. In these agreements, we depend on these
counterparties to make payment or otherwise perform. We generally endeavor to reduce our risk of exposure by limiting the
counterparties with which we enter into financial transactions to reputable financial institutions. In addition, availability of
financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing
markets.
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Insurance Segment Market Risks
The following is a discussion of the significant market risk exposures, on a GAAP basis, for our insurance business
conducted through Global Atlantic.
Hedge Program
To manage market risk, Global Atlantic established a hedge program that seeks to mitigate economic impacts primarily
from interest rate, equity price, and foreign exchange rate movements, while taking into consideration accounting and capital
impacts. For Global Atlantic's fixed-indexed annuity and interest-sensitive life policies, Global Atlantic generally seeks to use
static hedges to offset the exposure primarily created by changes in indexed account values. For Global Atlantic's variable
annuity policies, Global Atlantic generally seeks to dynamically hedge its exposure to changes in the value of the guarantee
Global Atlantic provides to policyholders. In the context of specific reinsurance or other transactions in Global Atlantic's
institutional channel or strategic acquisitions, Global Atlantic may also enter into hedges which are designed to limit short-
term market risks to the economic value of the target assets. From time to time, Global Atlantic also enters into hedges
designed to limit the volatility associated with changes in the value of its general account assets or changes to net investment
income as a result of interest rate or credit spread movements, while also taking into consideration economic impacts. Global
Atlantic also enters into currency swaps and forwards to manage foreign exchange rate risks with respect to certain assets
and liabilities denominated in foreign currencies. Global Atlantic also enters into inflation swaps to manage inflation risk
associated with inflation-indexed preneed policies. Where Global Atlantic has derivative instruments that are designated and
qualify as accounting hedges, these derivative instruments receive hedge accounting.
Global Atlantic's hedge program is not designed to, and may not be effective in, offsetting all impacts to net income,
assets under management, statutory capital, or economic values. Movements in market variables other than interest rates
and equity market prices that are not explicitly hedged can also cause net income volatility. See "Risk Factors—Risks Related
to Our Insurance Activities—Volatile market and economic conditions, including sustained increases or decreases in interest
rates and other interest rate fluctuations, may adversely affect our insurance business" and "Risk Factors—Risks Related to
Our Business—The failure to manage our financial and enterprise risks could materially and adversely affect our financial
condition and results of operation."
Sensitivities
Global Atlantic evaluates the sensitivity of net income to specific changes in interest rates, credit spreads, and equity
prices projected using internal models. All of the estimated sensitivities assume that all other factors remain constant and
reflect the impact of related hedges assuming no hedge rebalancing in Global Atlantic's dynamic program, as explained
further below.
Global Atlantic's internal models project impacts as of a specific date, and are measured relative to a starting level
reflecting its assets and liabilities at that date and the actuarial factors, investment activity, and assumed investment returns
associated with insurance liabilities. The models measure the impact of changing one factor at a time and assume that all
other factors remain unchanged. Actual results can differ significantly from these estimates for a variety of reasons, including
the interaction among these factors when more than one changes, discretionary actions by management in response to such
changes, differences between the return of the underlying fund and the return on the index being hedged, actual experience
differing from the assumptions, changes in business mix, effective tax rates, and other market factors, and limitations
inherent in the use of models. For these reasons, the sensitivities should only be viewed as directional estimates of the
impacts on Global Atlantic's net income and shareholders’ equity, excluding accumulated other comprehensive income
("AOCI"), and actual changes in response to such scenarios may differ materially from estimates provided.
For the dynamic portion of the hedge program, Global Atlantic primarily uses interest rate and equity futures to hedge
liabilities which have option-like embedded derivatives. As such, Global Atlantic's program requires frequent rebalancing as
markets move to ensure that the hedges are being re-sized to the new liability exposure. In addition, certain of the underlying
variable annuity separate account funds are managed volatility funds, so Global Atlantic's market exposures may change
substantially after sharp market moves. The point-in-time estimates provided in this section assume no hedge rebalancing
and, as such, the impact on Global Atlantic's consolidated net income may be different from what is shown below.
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Interest Rate Risk
Global Atlantic is exposed to interest rate risk as a result of changes in the level and volatility of interest rates. Changes in
the level and volatility of interest rates primarily impacts the fair value reported in our consolidated financial statements of
the following:
•embedded derivatives associated with modified coinsurance and coinsurance with funds withheld payables or
receivables;
•embedded derivatives associated with variable annuities, fixed-indexed annuities, and interest sensitive life products;
•policy liabilities accounted under the fair value option,
•market risk benefits, and
•financial instruments held in Global Atlantic's investment portfolio and used in its hedge program.
Changes in fair value of the foregoing are generally recorded as gains or losses in the consolidated statement of
operations. For specific derivatives designated as cash flow hedges of forecasted bond purchases and receiving hedge
accounting treatment, gains or losses are recorded in accumulated other comprehensive income and reclassified to net
investment income following the qualifying purchases of available-for-sale securities, as an adjustment to the yield earned
over the life of the purchased securities, using the effective interest method.
Due to the dynamic lapse sensitivities within Global Atlantic's models, market volatility in interest rates also impacts the
policy liabilities of certain fixed annuity products, changes in which are recorded in the consolidated statement of operations.
In periods following interest rate moves, Global Atlantic will also recognize a change in the income earned on certain of
its floating-rate assets and the cost of funding on certain of Global Atlantic's liabilities recorded in the consolidated statement
of operations.
Effect of Interest Rate Sensitivity
In the table below, Global Atlantic estimates the impact of a 50 basis point increase/(decrease) in interest rates, from a
parallel shift in the yield curve, from levels as of December 31, 2025 and 2024 to its net income and shareholders’ equity,
excluding AOCI. These sensitivities include the impact of related hedges and adjustments to policy liabilities attributable to
interest rate changes.
December 31, 2025 | December 31, 2024 | |||||||
Hypothetical Change(1) | Hypothetical Change(1) | |||||||
($ in thousands) | +50 Basis Points | -50 Basis Points | +50 Basis Points | -50 Basis Points | ||||
Total Estimated Net income and Shareholders’ Equity Excluding AOCI Sensitivity (Point in Time) | $306,814 | $(320,746) | $217,630 | $(227,213) | ||||
Total Estimated Net Income and Shareholders’ Equity Excluding AOCI Sensitivity (Over 12 Months)(2) | 70,283 | (70,283) | 28,843 | (28,843) | ||||
(1)The point in time and over 12 months total estimated impacts reflect the impact of hedges within Global Atlantic's liability hedging program, as well as
hedges designed to limit surplus volatility resulting from interest rate movements.
(2)Excludes point in time impact. Estimated sensitivity to a hypothetical change over 12 months does not take into account any management actions that
may be taken to mitigate actual impacts.
The estimated point in time impact is driven by a net decrease/(increase) in the value of (i) the embedded derivatives
associated with Global Atlantic's modified coinsurance and coinsurance with funds withheld payables and receivables, (ii) the
embedded derivatives associated with its fixed-indexed annuity, interest sensitive life products, and variable annuities
accounted for under the fair value option, and (iii) market risk benefits. These are largely offset by a loss/(gain) in financial
instruments used in Global Atlantic's hedging program, investments classified as trading, and loans designated under the fair
value option, based on balances in place as of year end. These estimated changes include the related income tax impacts.
The impact over 12 months is driven by an increase/(decrease) in the income earned on Global Atlantic's floating rate
assets, and partially offset by an increase/(decrease) in the cost of its floating-rate liabilities.
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In the table below Global Atlantic estimates the impact of a 50 basis point increase/(decrease) in interest rates, for a
parallel shift in the yield curve, from levels as of December 31, 2025 and 2024, to Global Atlantic's AOCI.
December 31, 2025 | December 31, 2024 | |||||||
Hypothetical Change | Hypothetical Change | |||||||
($ in thousands) | +50 Basis Points | -50 Basis Points | +50 Basis Points | -50 Basis Points | ||||
Total Estimated AOCI Sensitivity (Point in Time) | $(1,337,622) | $1,406,895 | $(1,142,278) | $1,225,303 | ||||
The estimated point in time impact is primarily driven by a (i) net (decrease)/increase in the value of Global Atlantic's
available-for-sale fixed maturity securities which are carried at fair value with unrealized gains and losses, (ii) the effect of
changes in the discount rates used to measure traditional and limited-payment long duration insurance contracts, and (iii) the
effect on additional insurance liabilities when unrealized gains and losses are included in the investment margin while
calculating the present value of expected assessments for the benefit ratio; all of which are reported in AOCI. The estimated
changes include the related income tax impacts.
Credit Spread Risk
Global Atlantic is exposed to credit spread risk as a result of changes in the spread between the yields on its funds
withheld payables and receivables at interest and yields on comparable U.S. Treasury securities. Global Atlantic's reinsurance
agreements include modified coinsurance and funds withheld coinsurance arrangements. Such arrangements are deemed to
contain embedded derivatives, which are measured at fair value, and are therefore impacted by the mark-to-market value of
the related assets. Changes in the credit spreads associated with the assets impact the mark-to-market value of the assets.
There is additional instrument-specific credit spread risk exposure inherent in Global Atlantic's credit spread used in valuing
embedded derivative liabilities, which serves to mitigate net credit exposure. Global Atlantic may choose to enter into hedge
positions to manage credit spread risk. As of December 31, 2025 and 2024, Global Atlantic had a $5.0 million and $194
thousand credit derivative position, respectively.
Effect of Credit Spread Sensitivity
In the table below, Global Atlantic estimates the impact of a 50 basis points increase/(decrease) in credit spreads from
levels as of December 31, 2025 and 2024, to its net income and shareholders’ equity, excluding AOCI. These estimated
changes include the related income tax impacts and include impacts on instrument-specific credit risk used in valuing
embedded derivative liabilities.
December 31, 2025 | December 31, 2024 | |||||||
Hypothetical Change | Hypothetical Change | |||||||
($ in thousands) | +50 Basis Points | -50 Basis Points | +50 Basis Points | -50 Basis Points | ||||
Total Estimated Net income and Shareholders’ Equity Excluding AOCI Sensitivity (Point in Time) | $356,243 | $(362,891) | $330,302 | $(331,283) | ||||
In the table below Global Atlantic estimates the impact of a 50 basis point increase/(decrease) in instrument-specific
credit risk on market risk benefits, for a parallel shift in the yield curve, from levels as of December 31, 2025 and 2024, to its
AOCI.
December 31, 2025 | December 31, 2024 | |||||||
Hypothetical Change | Hypothetical Change | |||||||
($ in thousands) | +50 Basis Points | -50 Basis Points | +50 Basis Points | -50 Basis Points | ||||
Total Estimated AOCI Sensitivity (Point in Time) | $137,466 | $(151,942) | $113,363 | $(125,813) | ||||
The estimated point in time impact is driven primarily by the effect of changes in the fair value of a market risk benefit
attributable to a change in the instrument-specific credit risk. The estimated changes include the related income tax impacts.
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Equity Price Risk
Global Atlantic is exposed to equity price risk as a result of changes in the level and volatility of equity prices.
Changes in the level and volatility of equity prices primarily impacts the fair value reported in the consolidated financial
statements of the following:
•embedded derivatives and market risk benefits associated with Global Atlantic's variable annuities, fixed-indexed
annuities and interest sensitive products;
•financial instruments held in Global Atlantic's investment portfolio and used in its hedge program; and
•certain of Global Atlantic's alternative assets.
Changes in fair value of the foregoing are recorded as gains or losses in our consolidated statements of operations.
In addition, certain of the fees Global Atlantic earns in its variable annuity and variable universal life blocks are calculated
on the account values, which are exposed to equity price risk. These changes impact our net income over the periods
following equity price moves.
Effect of Equity Price Sensitivity
In the table below, Global Atlantic estimates the impact of a 10% increase/(decrease) in equity prices from levels as of
December 31, 2025 and 2024, to its net income and shareholders’ equity, excluding AOCI. These sensitivities include the
impact of related hedges but exclude the potential impact of alternative assets, because the fair value of these investments
do not necessarily move directly in line with movements in public equity markets.
December 31, 2025 | December 31, 2024 | |||||||
Hypothetical Change(1) | Hypothetical Change(1) | |||||||
($ in thousands) | +10% Equity Prices | -10% Equity Prices | +10% Equity Prices | -10% Equity Prices | ||||
Total Estimated Net income and Shareholders’ Equity Excluding AOCI Sensitivity (Point in Time) | $(1,055) | $(19,674) | $(3,646) | $(672) | ||||
Total Estimated Net Income and Shareholders’ Equity Excluding AOCI Sensitivity (Over 12 Months)(2) | $4,045 | $(4,515) | $4,232 | $(4,716) | ||||
(1)From time to time, Global Atlantic may choose to enter into additional hedges to mitigate economic exposure to equity markets.
(2)Excludes point in time impact. Estimated sensitivity to a hypothetical change over 12 months does not take into account any management actions that
may be taken to mitigate actual impacts.
The estimated point-in-time impact is driven by an increase/(decrease) in the value of (i) the embedded derivatives
associated with Global Atlantic's fixed-indexed annuity and interest sensitive life products, (ii) its variable annuity embedded
derivatives, (iii) market risk benefits, and (iv) a gains (losses) in financial instruments used in its hedging program based on
balances in place at year-end. These estimated changes include the impact of related amortization of deferred revenue and
expenses and related income tax impacts.
For a discussion of current market conditions, see "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations—Business Environment" in this report.
Exchange Rate Risk
Global Atlantic manages its exchange rate risk to maintain minimal exposure to exchange rate fluctuations. Global
Atlantic seeks to completely hedge exchange rate risk arising from the assets and liabilities on its balance sheet through either
matching exchange rate exposures on either side of the balance sheet, or by engaging in hedging activities to eliminate or
mitigate exchange rate mismatch risk.
Global Atlantic estimates that an immediate, hypothetical 10% decrease in exchange rates between the U.S. dollar and all
of the major foreign currencies in which its assets and liabilities were denominated as of December 31, 2025 (i.e., a decrease
in the value of the U.S. dollar against these foreign currencies) would result in a decrease in net income attributable to KKR &
Co. Inc. before income taxes, net of the impact of foreign exchange hedging strategies, if not offset by other factors, of
approximately $56 million.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page No. | |
Report of Independent Registered Public Accounting Firm | 156 |
Consolidated Statements of Financial Condition as of December 31, 2025 and 2024 | 159 |
Consolidated Statements of Operations for the Years Ended December 31, 2025, 2024, and 2023 | 163 |
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2025, 2024, and 2023 | 165 |
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2025, 2024, and 2023 | 166 |
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023 | 169 |
Notes to Consolidated Financial Statements | 172 |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of KKR & Co. Inc.:
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statement of financial condition of KKR & Co. Inc. and its subsidiaries
(the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive
income (loss), changes in equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the
related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). We also
have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in
Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United
States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013)
issued by COSO.
Basis for Opinions
The Company’s management is responsible for these financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion
on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining
an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a
reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts
or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex
judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements,
taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the
critical audit matters or on the accounts or disclosures to which they relate.
Fair Value—Level III Investments—Refer to Notes 2, 7, and 9 to the financial statements
Critical Audit Matter Description
The Company sponsors or manages investment funds, investment vehicles and accounts (“investment funds”) that have
certain investments measured at fair value using unobservable pricing inputs and are classified as Level III Investments in the
fair value hierarchy. These Level III investments have limited observable market activity and the inputs used in the
determination of fair value require significant management judgment or estimation.
In addition, the Company recognizes carried interest from investment funds based on cumulative fund performance to
date. At the end of each reporting period, the Company calculates the carried interest that would be due to the Company
from each investment fund, pursuant to the investment fund agreement. The change in the fair value of the underlying Level
III Investments held by the investment funds is a significant input into the determination of carried interest for each reporting
period. As the fair value of underlying investments varies between reporting periods, the Company adjusts the amounts
recorded as carried interest. Accrued but unpaid carried interest as of the reporting date is reflected in investments in the
consolidated statements of financial condition.
We identified certain Level III Investments as a critical audit matter because of the unobservable pricing inputs
Management used to estimate fair value.
Performing audit procedures to evaluate the appropriateness of these inputs used by Management required a high
degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists who
possess significant investment valuation expertise.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the unobservable pricing inputs used by Management to estimate the fair values of Level
III Investments included the following, among others:
•We involved more senior, more experienced audit team members to perform audit procedures.
•We tested the effectiveness of controls over the determination of the fair value of Level III Investments.
•With the assistance of our fair value specialists, we evaluated Management’s process for Level III Investments
valuation, including their determination of the unobservable pricing inputs used to estimate fair value.
•We assessed the consistency by which Management applied its process.
•We evaluated the Company’s historical ability to accurately estimate fair value of Level III Investments by comparing
previous estimates of fair value to subsequent market transactions with third parties.
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Policy Liabilities — Valuation of Policy Liabilities Associated with the Fixed-Indexed Annuity Product — Refer to Notes 2,
9,10, and 17 to the financial statements
Critical Audit Matter Description
The Company’s products include the fixed-indexed annuity product, which contains equity indexed features that are
considered embedded derivatives and are required to be measured at fair value. In addition, certain fixed-indexed annuity
contracts are issued with guarantees, which are considered Market Risk Benefits (“MRBs”).
Management applies significant judgment in selecting assumptions used to estimate the value of embedded derivative
liabilities and MRBs associated with the fixed-indexed annuity product. Changes in market conditions or variations in certain
assumptions could result in significant fluctuations in these estimates. Principal assumptions include surrender, withdrawal,
benefit utilization, mortality, option budgets, future index credits, equity market return, interest rates, and nonperformance
risk assumptions.
We identified the valuation of embedded derivative liabilities, and MRBs associated with the fixed-indexed annuity
product as a critical audit matter because of the inherent management judgment required in selecting assumptions.
Performing audit procedures to evaluate the judgments made and the reasonableness of assumptions and models used
in the valuations required a high degree of auditor judgment and an increased extent of auditor effort. The audit effort
included the use of professionals with specialized skill and knowledge, including our valuation, modeling, and actuarial
specialists, to assist in performing these procedures and evaluating the audit evidence obtained from these procedures.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the valuation of embedded derivative liabilities and MRBs associated with the fixed-
indexed annuity product included the following, among others:
•We involved more senior, more experienced audit team members to perform audit procedures.
•We tested the effectiveness of controls over the assumptions, including controls over the underlying data used in the
valuation of these liabilities.
•With the assistance of our valuation, modeling, and actuarial specialists, we:
◦Evaluated the methods and judgments applied by Management in the determination of principal
assumptions used in the valuation of embedded derivative liabilities and MRBs associated with the fixed-
indexed annuity product.
◦Evaluated the results of underlying experience studies, capital market projections, and judgments applied by
Management in setting the assumptions.
◦Developed an independent estimate of embedded derivative liabilities and MRBs associated with the fixed-
indexed annuity production on a sample basis and evaluated differences.
/s/ Deloitte & Touche LLP
February 27, 2026
We have served as the Company's auditor since 2006.
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KKR & CO. INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | |||
(Amounts in Thousands, Except Share and Per Share Data) | |||
December 31, 2025 | December 31, 2024 | ||
Assets | |||
Asset Management and Strategic Holdings | |||
Cash and Cash Equivalents | $ | $ | |
Restricted Cash and Cash Equivalents | |||
Investments | |||
Due from Affiliates | |||
Other Assets | |||
Insurance | |||
Cash and Cash Equivalents | $ | $ | |
Restricted Cash and Cash Equivalents | |||
Investments | |||
Reinsurance Recoverable | |||
Insurance Intangible Assets | |||
Other Assets | |||
Separate Account Assets | |||
Total Assets | $ | $ | |
Liabilities and Equity | |||
Asset Management and Strategic Holdings | |||
Debt Obligations | $ | $ | |
Due to Affiliates | |||
Accrued Expenses and Other Liabilities | |||
Insurance | |||
Policy Liabilities (market risk benefit liabilities: $ December 31, 2025 and December 31, 2024, respectively.) | $ | $ | |
Debt Obligations | |||
Funds Withheld Payable at Interest | |||
Accrued Expenses and Other Liabilities | |||
Reinsurance Liabilities | |||
Separate Account Liabilities | |||
Total Liabilities | |||
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KKR & CO. INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (CONTINUED) | |||
(Amounts in Thousands, Except Share and Per Share Data) | |||
December 31, 2025 | December 31, 2024 | ||
Commitments and Contingencies (See Note 24) | |||
Redeemable Noncontrolling Interests (See Note 23) | $ | $ | |
Stockholders' Equity | |||
Series D Mandatory Convertible Preferred Stock, $ shares, issued and outstanding as of December 31, 2025 and December 31, 2024, respectively. | |||
Series I Preferred Stock, $ outstanding as of December 31, 2025 and December 31, 2024. | |||
Common Stock, $ 2024, respectively. | |||
Additional Paid-In Capital | |||
Retained Earnings | |||
Accumulated Other Comprehensive Income (Loss) ("AOCI") | ( | ( | |
Total KKR & Co. Inc. Stockholders' Equity | |||
Noncontrolling Interests (See Note 22) | |||
Total Equity | |||
Total Liabilities and Equity | $ | $ | |
See notes to financial statements.
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KKR & CO. INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (CONTINUED)
(Amounts in Thousands)
The following presents the portion of the consolidated balances provided in the consolidated statements of financial
condition attributable to consolidated variable interest entities ("VIEs"). As of December 31, 2025 and December 31, 2024,
KKR's consolidated VIEs consist primarily of (i) certain collateralized financing entities ("CFEs") including those CFEs holding
collateralized loan obligations ("CLOs"), (ii) certain investment funds, and (iii) certain VIEs formed by Global Atlantic. The
noteholders, creditors, and equity holders of these VIEs have no recourse to the assets of any other KKR entity.
With respect to consolidated CFEs and certain investment funds, the following assets may only be used to settle
obligations of these consolidated VIEs and the following liabilities are only the obligations of these consolidated VIEs and not
generally to KKR. Additionally, KKR has no right to the benefits from, nor does KKR bear the risks associated with, the assets
held by these VIEs beyond KKR's beneficial interest therein and any income generated from the VIEs. There are neither explicit
arrangements nor does KKR hold implicit variable interests that would require KKR to provide any material ongoing financial
support to the consolidated VIEs, beyond amounts previously committed to them, if any.
With respect to certain other VIEs consolidated by Global Atlantic, Global Atlantic has formed certain VIEs to either (i)
hold investments, including fixed maturity securities, consumer and other loans, renewable energy, transportation, and real
estate, or (ii) to conduct certain reinsurance activities with third party commitments. These VIEs issue beneficial interests
primarily to Global Atlantic’s insurance companies.
December 31, 2025 | |||||||
Consolidated CFEs | Consolidated Funds and Other Investment Vehicles | Other VIEs | Total | ||||
Assets | |||||||
Asset Management and Strategic Holdings | |||||||
Cash and Cash Equivalents | $ | $ | $ | $ | |||
Restricted Cash and Cash Equivalents | |||||||
Investments | |||||||
Other Assets | |||||||
Insurance | |||||||
Cash and Cash Equivalents | |||||||
Investments | |||||||
Other Assets | |||||||
Total Assets | $ | $ | $ | $ | |||
Liabilities | |||||||
Asset Management and Strategic Holdings | |||||||
Debt Obligations | $ | $ | $ | $ | |||
Accrued Expenses and Other Liabilities | |||||||
Insurance | |||||||
Debt Obligations | |||||||
Accrued Expenses and Other Liabilities | |||||||
Total Liabilities | $ | $ | $ | $ | |||
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KKR & CO. INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (CONTINUED)
(Amounts in Thousands)
December 31, 2024 | |||||||
Consolidated CFEs | Consolidated Funds and Other Investment Vehicles | Other VIEs | Total | ||||
Assets | |||||||
Asset Management and Strategic Holdings | |||||||
Cash and Cash Equivalents | $ | $ | $ | $ | |||
Restricted Cash and Cash Equivalents | |||||||
Investments | |||||||
Other Assets | |||||||
Insurance | |||||||
Cash and Cash Equivalents | |||||||
Investments | |||||||
Other Assets | |||||||
Total Assets | $ | $ | $ | $ | |||
Liabilities | |||||||
Asset Management and Strategic Holdings | |||||||
Debt Obligations | $ | $ | $ | $ | |||
Accrued Expenses and Other Liabilities | |||||||
Insurance | |||||||
Debt Obligations | |||||||
Accrued Expenses and Other Liabilities | |||||||
Total Liabilities | $ | $ | $ | $ | |||
See notes to financial statements.
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KKR & CO. INC. CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
(Amounts in Thousands, Except Share and Per Share Data) | |||||
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Revenues | |||||
Asset Management and Strategic Holdings | |||||
Fees and Other | $ | $ | $ | ||
Capital Allocation-Based Income (Loss) | |||||
Insurance | |||||
Net Premiums | |||||
Policy Fees | |||||
Net Investment Income | |||||
Net Investment-Related Gains (Losses) | ( | ( | ( | ||
Other Income | |||||
Total Revenues | |||||
Expenses | |||||
Asset Management and Strategic Holdings | |||||
Compensation and Benefits | |||||
Occupancy and Related Charges | |||||
General, Administrative and Other | |||||
Insurance | |||||
Net Policy Benefits and Claims (including market risk benefit (gain) loss of $ loss on policy liabilities: $( | |||||
Amortization of Policy Acquisition Costs | |||||
Interest Expense | |||||
Insurance Expenses | |||||
General, Administrative and Other | |||||
Total Expenses | |||||
Investment Income (Loss) - Asset Management and Strategic Holdings | |||||
Net Gains (Losses) from Investment Activities | |||||
Dividend Income | |||||
Interest Income | |||||
Interest Expense | ( | ( | ( | ||
Total Investment Income (Loss) | |||||
Income (Loss) Before Taxes | |||||
Income Tax Expense (Benefit) | |||||
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KKR & CO. INC. CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED) | |||||
(Amounts in Thousands, Except Share and Per Share Data) | |||||
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Net Income (Loss) | |||||
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests | ( | ||||
Net Income (Loss) Attributable to Noncontrolling Interests | |||||
Net Income (Loss) Attributable to KKR & Co. Inc. | |||||
Series C Mandatory Convertible Preferred Stock Dividends | |||||
Series D Mandatory Convertible Preferred Stock Dividends | |||||
Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders | $ | $ | $ | ||
Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock | |||||
Basic | $ | $ | $ | ||
Diluted | $ | $ | $ | ||
Weighted Average Shares of Common Stock Outstanding | |||||
Basic | |||||
Diluted | |||||
See notes to financial statements.
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KKR & CO. INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in Thousands)
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Net Income (Loss) | $ | $ | $ | ||
Other Comprehensive Income (Loss), Net of Tax: | |||||
Unrealized Gains (Losses) on Available-For-Sale Securities and Other | ( | ||||
Net effect of changes in discount rates and instrument-specific credit risk on policy liabilities | ( | ( | |||
Foreign Currency Translation Adjustments | ( | ( | |||
Comprehensive Income (Loss) | |||||
Comprehensive Income (Loss) Attributable to Redeemable Noncontrolling Interests | ( | ||||
Comprehensive Income (Loss) Attributable to Noncontrolling Interests | |||||
Comprehensive Income (Loss) Attributable to KKR & Co. Inc. | $ | $ | $ | ||
See notes to financial statements.
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KKR & CO. INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Amounts in Thousands, Except Share and Per Share Data) | |||
Year Ended December 31, 2025 | |||
Amounts | Shares | ||
Series D Mandatory Convertible Preferred Stock | |||
Beginning of Period | $ | ||
Issuance of Series D Mandatory Convertible Preferred Stock (net of issuance costs) | |||
End of Period | |||
Series I Preferred Stock | |||
Beginning of Period | — | ||
End of Period | — | ||
Common Stock | |||
Beginning of Period | |||
Net Delivery of Common Stock (Equity Incentive Plan) | |||
Repurchases of Common Stock | — | ( | |
Clawback of Transfer Restricted Shares | — | ( | |
Exchange of KKR Restricted Holdings Units | |||
Private Placement Share Issuance | — | ||
End of Period | |||
Additional Paid-In Capital | |||
Beginning of Period | |||
Net Delivery of Common Stock (Equity Incentive Plan) | ( | ||
Repurchases of Common Stock | ( | ||
Equity-Based Compensation (Non-Cash Contribution) | |||
Change in KKR & Co. Inc.'s Ownership Interest (See Note 22) | |||
Tax Effects of Changes in Ownership and Other | |||
End of Period | |||
Retained Earnings | |||
Beginning of Period | |||
Net Income (Loss) Attributable to KKR & Co. Inc. | |||
Series D Mandatory Convertible Preferred Stock Dividends ($ | ( | ||
Common Stock Dividends ($ | ( | ||
End of Period | |||
Accumulated Other Comprehensive Income (Loss) (net of tax) | |||
Beginning of Period | ( | ||
Other Comprehensive Income (Loss) | |||
Change in KKR & Co. Inc.'s Ownership Interest (See Note 22) | |||
End of Period | ( | ||
Total KKR & Co. Inc. Stockholders' Equity | |||
Noncontrolling Interests (See Note 22) | |||
Total Equity | $ | ||
Redeemable Noncontrolling Interests (See Note 23) | $ | ||
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KKR & CO. INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED) (Amounts in Thousands, Except Share and Per Share Data) | |||
Year Ended December 31, 2024 | |||
Amounts | Shares | ||
Series I Preferred Stock | |||
Beginning of Period | $ | ||
End of Period | |||
Common Stock | |||
Beginning of Period | |||
Net Delivery of Common Stock (Equity Incentive Plan) | |||
Private Placement Share Issuance | — | ||
Exchange of KKR Restricted Holdings Units | — | ||
Clawback of Transfer Restricted Shares | — | ( | |
End of Period | |||
Additional Paid-In Capital | |||
Beginning of Period | |||
Net Delivery of Common Stock (Equity Incentive Plan) | ( | ||
Compensation Modification | |||
Compensation Modification - Issuance of Holdings III Units | ( | ||
2024 GA Acquisition - Issuance of Holdings III Units (See Note 1) | ( | ||
Equity-Based Compensation (Non-Cash Contribution) | |||
Change in KKR & Co. Inc.'s Ownership Interest - 2024 GA Acquisition | |||
Change in KKR & Co. Inc.'s Ownership Interest (See Note 22) | |||
Tax Effects of Changes in Ownership and Other | |||
End of Period | |||
Retained Earnings | |||
Beginning of Period | |||
Net Income (Loss) Attributable to KKR & Co. Inc. | |||
Common Stock Dividends ($ | ( | ||
End of Period | |||
Accumulated Other Comprehensive Income (Loss) (net of tax) | |||
Beginning of Period | ( | ||
Other Comprehensive Income (Loss) | ( | ||
Change in KKR & Co. Inc.'s Ownership Interest - 2024 GA Acquisition | ( | ||
Change in KKR & Co. Inc.'s Ownership Interest (See Note 22) | |||
End of Period | ( | ||
Total KKR & Co. Inc. Stockholders' Equity | |||
Noncontrolling Interests (See Note 22) | |||
Total Equity | $ | ||
Redeemable Noncontrolling Interests (See Note 23) | $ | ||
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KKR & CO. INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED) (Amounts in Thousands, Except Share and Per Share Data) | |||
Years Ended December 31, 2023 | |||
Amounts | Shares | ||
Series C Mandatory Convertible Preferred Stock | |||
Beginning of Period | $ | ||
Conversion of Series C Mandatory Convertible Preferred Stock | ( | ( | |
End of Period | |||
Series I Preferred Stock | |||
Beginning of Period | — | ||
End of Period | — | ||
Common Stock | |||
Beginning of Period | |||
Clawback of Transfer Restricted Shares | — | ( | |
Net Delivery of Common Stock (Equity Incentive Plan) | |||
Conversion of Series C Mandatory Convertible Preferred Stock | |||
Repurchases of Common Stock | ( | ( | |
End of Period | |||
Additional Paid-In Capital | |||
Beginning of Period (as previously reported for the prior period) | |||
Adoption of New Accounting Standard | |||
Beginning of Period (as revised for the prior period) | |||
Conversion of Series C Mandatory Convertible Preferred Stock | |||
Excise Tax on Repurchases of Common Stock | ( | ||
Net Delivery of Common Stock (Equity Incentive Plan) | ( | ||
Repurchases of Common Stock | ( | ||
Equity-Based Compensation (Non-Cash Contribution) | |||
Change in KKR & Co. Inc.'s Ownership Interest (See Note 22) | |||
Tax Effects of Changes in Ownership and Other | |||
End of Period | |||
Retained Earnings | |||
Beginning of Period (as previously reported for the prior period) | |||
Adoption of New Accounting Standard | |||
Beginning of Period (as revised for the prior period) | |||
Net Income (Loss) Attributable to KKR & Co. Inc. | |||
Series C Mandatory Convertible Preferred Stock Dividends ($ | ( | ||
Common Stock Dividends ($ | ( | ||
End of Period | |||
Accumulated Other Comprehensive Income (Loss) (net of tax) | |||
Beginning of Period (as previously reported for the prior period) | ( | ||
Adoption of New Accounting Standard | |||
Beginning of Period (as revised for the prior period) | ( | ||
Other Comprehensive Income (Loss) | |||
Change in KKR & Co. Inc.'s Ownership Interest (See Note 22) | ( | ||
End of Period | ( | ||
Total KKR & Co. Inc. Stockholders' Equity | |||
Noncontrolling Interests (See Note 22) | |||
Total Equity | $ | ||
Redeemable Noncontrolling Interests (See Note 23) | $ | ||
See notes to financial statements.
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KKR & CO. INC. CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(Amounts in Thousands) | |||||
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Operating Activities | |||||
Net Income (Loss) | $ | $ | $ | ||
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided (Used) by Operating Activities: | |||||
Equity-Based Compensation | |||||
Net Realized (Gains) Losses – Asset Management and Strategic Holdings | ( | ( | |||
Change in Unrealized (Gains) Losses – Asset Management and Strategic Holdings | ( | ( | ( | ||
Capital Allocation-Based (Income) Loss – Asset Management and Strategic Holdings | ( | ( | ( | ||
Net Investment and Policy Liability-Related (Gains) Losses – Insurance | |||||
Net Accretion and Amortization | ( | ( | |||
Interest Credited to Policyholder Account Balances (net of Policy Fees) – Insurance | |||||
Other Non-Cash Amounts | |||||
Cash Flows Due to Changes in Operating Assets and Liabilities: | |||||
Reinsurance Transactions and Acquisitions, Net of Cash Provided – Insurance | |||||
Change in Premiums, Notes Receivable and Reinsurance Recoverable, Net of Reinsurance Premiums Payable – Insurance | |||||
Change in Deferred Policy Acquisition Costs – Insurance | ( | ( | ( | ||
Change in Policy Liabilities and Accruals, Net – Insurance | ( | ( | |||
Change in Consolidation | ( | ( | |||
Change in Due from / to Affiliates | ( | ( | |||
Change in Other Assets | ( | ( | |||
Change in Accrued Expenses and Other Liabilities | |||||
Investments Purchased – Asset Management and Strategic Holdings | ( | ( | ( | ||
Proceeds from Investments – Asset Management and Strategic Holdings | |||||
Net Cash Provided (Used) by Operating Activities | ( | ||||
Investing Activities | |||||
Acquisitions, Net | ( | ||||
Purchases of Fixed Assets | ( | ( | ( | ||
Investments Purchased – Insurance | ( | ( | ( | ||
Proceeds from Investments – Insurance | |||||
Other Investing Activities, Net | |||||
Net Cash Provided (Used) by Investing Activities | ( | ( | ( | ||
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KKR & CO. INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) | |||||
(Amounts in Thousands) | |||||
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Financing Activities | |||||
Series C Mandatory Convertible Preferred Stock Dividends | ( | ||||
Series D Mandatory Convertible Preferred Stock Dividends | ( | ||||
Common Stock Dividends | ( | ( | ( | ||
Distributions to Redeemable Noncontrolling Interests | ( | ( | ( | ||
Contributions from Redeemable Noncontrolling Interests | |||||
Distributions to Noncontrolling Interests | ( | ( | ( | ||
Contributions from Noncontrolling Interests | |||||
Issuance of Series D Mandatory Convertible Preferred Stock (net of issuance costs) | |||||
2024 GA Acquisition - Cash consideration | ( | ||||
Net Delivery of Common Stock (Equity Incentive Plan) | ( | ( | ( | ||
Repurchases of Common Stock | ( | ( | |||
Proceeds from Debt Obligations | |||||
Repayment of Debt Obligations | ( | ( | ( | ||
Financing Costs Paid | ( | ( | ( | ||
Additions to Contractholder Deposit Funds – Insurance | |||||
Withdrawals from Contractholder Deposit Funds – Insurance | ( | ( | ( | ||
Reinsurance Transactions, Net of Cash Provided – Insurance | |||||
Other Financing Activity, Net | ( | ||||
Net Cash Provided (Used) by Financing Activities | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ||||
Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash | $ | $( | $ | ||
Cash, Cash Equivalents and Restricted Cash, Beginning of Period | |||||
Cash, Cash Equivalents and Restricted Cash, End of Period | $ | $ | $ | ||
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KKR & CO. INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) | |||||
(Amounts in Thousands) | |||||
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Cash, Cash Equivalents and Restricted Cash are comprised of the following: | |||||
Beginning of the Period | |||||
Asset Management and Strategic Holdings | |||||
Cash and Cash Equivalents | $ | $ | $ | ||
Restricted Cash and Cash Equivalents | |||||
Total Asset Management and Strategic Holdings | |||||
Insurance | |||||
Cash and Cash Equivalents | $ | $ | $ | ||
Restricted Cash and Cash Equivalents | |||||
Total Insurance | |||||
Cash, Cash Equivalents and Restricted Cash, Beginning of Period | $ | $ | $ | ||
End of the Period | |||||
Asset Management and Strategic Holdings | |||||
Cash and Cash Equivalents | $ | $ | $ | ||
Restricted Cash and Cash Equivalents | |||||
Total Asset Management and Strategic Holdings | |||||
Insurance | |||||
Cash and Cash Equivalents | $ | $ | $ | ||
Restricted Cash and Cash Equivalents | |||||
Total Insurance | |||||
Cash, Cash Equivalents and Restricted Cash, End of Period | $ | $ | $ | ||
Supplemental Disclosures of Cash Flow Information | |||||
Payments for Interest | $ | $ | $ | ||
Payments for Income Taxes, Net of Refunds | $ | $ | $ | ||
Payments for Operating Lease Liabilities | $ | $ | $ | ||
Supplemental Disclosures of Non-Cash Investing and Financing Activities | |||||
Non-Cash Contribution from Noncontrolling Interests | $ | $ | $ | ||
Non-Cash Distribution to Noncontrolling Interests | $ | $ | $( | ||
Non-Cash Distribution to Redeemable Noncontrolling Interests | $( | $ | $ | ||
Non-Cash Repayment of Debt Obligations | $( | $ | $ | ||
Debt Obligations - Net Gains (Losses), Translation and Other | $( | $ | $( | ||
Investments Acquired through Reinsurance Agreements | $ | $ | $ | ||
Contractholder Deposit Funds Acquired through Reinsurance Agreements | $ | $ | $ | ||
Change in Consolidation | |||||
Investments - Asset Management and Strategic Holdings | $ | $( | $( | ||
Investments - Insurance | $ | $ | $( | ||
Other Assets | $( | $ | $( | ||
Debt Obligations | $ | $( | $ | ||
Accrued Expenses and Other Liabilities | $( | $ | $( | ||
Noncontrolling Interests | $ | $ | $( | ||
Redeemable Noncontrolling Interests | $ | $ | $( |
See notes to financial statements.
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KKR & CO. INC.
NOTES TO FINANCIAL STATEMENTS
(All Amounts in Thousands, Except Share and Per Share Data, and Except Where Noted)
1. ORGANIZATION
KKR & Co. Inc. (NYSE: KKR), through its subsidiaries (collectively, "KKR"), is a leading global investment firm that offers
alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment
returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in
its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit, and real assets
and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life, and reinsurance
products under the management of The Global Atlantic Financial Group LLC ("TGAFG" and, together with its insurance
companies and other subsidiaries, "Global Atlantic").
KKR & Co. Inc. is the parent company of KKR Group Co. Inc., which in turn owns KKR Group Holdings Corp., which is the
general partner of KKR Group Partnership L.P. ("KKR Group Partnership"). KKR & Co. Inc. both indirectly controls KKR Group
Partnership and indirectly holds Class A partner interests in KKR Group Partnership ("KKR Group Partnership Units")
representing economic interests in KKR's business. As of December 31, 2025, KKR & Co. Inc. held indirectly approximately
through restricted holdings units representing an ownership interest in KKR Group Partnership Units, which may be
exchanged for shares of common stock of KKR & Co. Inc. ("exchangeable securities"). As limited partner interests, these KKR
Group Partnership Units are non-voting and do not entitle anyone other than KKR to manage its business and affairs. KKR
Group Partnership also has outstanding limited partner interests that provide for a carry pool provided by KKR Associates
Holdings L.P. ("Associates Holdings") and outstanding preferred units with economic terms that mirror the KKR & Co. Inc.
KKR’s insurance business is operated by Global Atlantic, in which KKR acquired a majority controlling interest on February
1, 2021 and of which KKR acquired all the remaining equity interests in Global Atlantic on January 2, 2024 (the “2024 GA
Acquisition”).
In this report, references to "KKR," refer to KKR & Co. Inc. and its subsidiaries, including Global Atlantic, unless the context
requires otherwise, especially in sections where "KKR" is intended to refer to the asset management and strategic holdings
businesses only. References to our "funds," "vehicles" or "investment vehicles" refer to a wide array of investment funds,
vehicles, and accounts that are advised, managed or sponsored by one or more subsidiaries of KKR, including collateralized
loan obligations ("CLOs"), certain operating companies and business development companies ("BDCs"), unless the context
requires otherwise.
Reorganization Agreement
On October 8, 2021, KKR entered into a Reorganization Agreement (the "Reorganization Agreement") with KKR Holdings
L.P. ("KKR Holdings"), KKR Management LLP (which holds the sole outstanding share of Series I preferred stock), Associates
Holdings, and the other parties thereto. Pursuant to the Reorganization Agreement, the parties agreed to undertake a series
of integrated transactions to effect a number of transformative structural and governance changes, some of which were
completed on May 31, 2022, and other changes to be completed in the future. On May 31, 2022, KKR completed the merger
transactions ("Reorganization Mergers") contemplated by the Reorganization Agreement pursuant to which KKR acquired KKR
Holdings (which changed its name to KKR Group Holdings L.P.) and all of the KKR Group Partnership Units held by it.
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Pursuant to the Reorganization Agreement, the following transactions will occur in the future on the Sunset Date (as
defined below):
i.the control of KKR & Co. Inc. by KKR Management LLP and the Series I Preferred Stock held by it will be eliminated,
ii.the voting rights for all common stock of KKR & Co. Inc., including with respect to the election of directors, will be
established on a one vote per share basis, and
iii.KKR will acquire control of Associates Holdings, the entity providing for the allocation of carry proceeds to KKR
employees, also known as the carry pool.
The “Sunset Date” will be the earlier of (i) December 31, 2026 and (ii) the six-month anniversary of the first date on which
the death or permanent disability of both Mr. Henry Kravis and Mr. George Roberts (collectively, "Co-Founders") has occurred
(or any earlier date consented to by KKR Management LLP in its sole discretion). In addition, KKR Management LLP agreed not
to transfer its ownership of the sole share of Series I Preferred Stock, and, the changes to occur effective on the Sunset Date
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements (referred to hereafter as the "financial statements") have been
prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Certain prior
period amounts in the accompanying notes have been reclassified to conform to the current period’s presentation, including the
realignment of prior period investment categories to the current year investment category presentation within Notes 4, 7, 9,
and 10.
KKR consolidates the financial results of KKR Group Partnership and its consolidated entities, which include the accounts of
KKR's investment management and capital markets companies, the general partners of certain unconsolidated investment
funds, general partners of consolidated investment funds, and their respective consolidated investment funds, Global Atlantic’s
insurance companies, and certain other entities including CFEs. References to Global Atlantic hereafter includes the insurance
companies of Global Atlantic, which are consolidated by KKR starting on February 1, 2021 (the "2021 GA Acquisition Date").
The presentations in the consolidated statement of financial condition and consolidated statement of operations reflect the
significant industry diversification of KKR by its acquisition of Global Atlantic. Global Atlantic operates an insurance business, and
KKR operates an asset management business, which manages the operations of the Strategic Holdings segment (see Note 21
"Segment Reporting"), each of which possess distinct characteristics. As a result, KKR developed a two-tiered approach for the
financial statements presentation, where Global Atlantic's insurance operations are presented separately from KKR's asset
management business. KKR believes that these separate presentations provide a more informative view of the consolidated
financial position and results of operations than traditional aggregated presentations and that reporting Global Atlantic’s
insurance operations separately is appropriate given, among other factors, the relative significance of Global Atlantic’s policy
liabilities, which are not obligations of KKR & Co. Inc. (other than the insurance companies that issued them). If a traditional
aggregate presentation were to be used, KKR would expect to eliminate or combine several identical or similar captions, which
would condense the presentations, but would also reduce the level of information presented. KKR also believes that using a
traditional aggregate presentation would result in no new line items compared to the two-tier presentation included in the
financial statements in this report.
The summary of the significant accounting policies has been organized considering the two-tiered approach and includes a
section for common accounting policies and an accounting policy section for each of the two tiers when a policy is specific to
one of the tiers.
In the ordinary course of business, KKR’s Asset Management business, Strategic Holdings business, and Insurance business
enter into transactions with each other, which may include transactions pursuant to their investment management agreements
and certain financing arrangements. The borrowings from these financing arrangements are non-recourse to KKR beyond the
assets designated to support such borrowings. All of the investment management and financing arrangements amongst KKR
businesses are eliminated in consolidation.
All intercompany transactions and balances have been eliminated.
SIGNIFICANT ACCOUNTING POLICIES – OVERALL
The preparation of the financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the recognition and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues, expenses, investment income (loss),
and income taxes during the reporting periods. Such estimates include but are not limited to (i) the valuation of investments and
financial instruments, (ii) the determination of the income tax provision, (iii) the impairment of goodwill and intangible assets,
(iv) the impairment of available-for-sale investments, (v) the valuation of insurance policy liabilities, including market risk
benefits, (vi) the valuation of embedded derivatives in policy liabilities and funds withheld, and (vii) the determination of the
allowance for loan losses.
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Certain events particular to each industry and country or region in which the portfolio companies conduct their operations,
as well as general market, economic, political and geopolitical, regulatory, and natural disasters and catastrophes, including
public health crises, may have a significant negative impact on KKR’s investments and profitability. Such events are beyond KKR’s
control, and the likelihood that they may occur and the effect on KKR's use of estimates cannot be predicted. Actual results
The types of entities KKR assesses for consolidation include (i) subsidiaries, including management companies, broker-
dealers and general partners of investment funds that KKR manages, (ii) entities that have the attributes of an investment
company, like investment funds, (iii) CFEs, (iv) Global Atlantic and its insurance companies, and (v) other entities. Each of these
entities is assessed for consolidation on a case by case basis depending on the specific facts and circumstances surrounding that
entity.
Pursuant to its consolidation policy, KKR first considers whether an entity is considered a VIE and therefore whether to
apply the consolidation guidance under the VIE model. Entities that do not qualify as VIEs are assessed for consolidation as
voting interest entities ("VOEs") under the voting interest model. Most of KKR's investment funds are categorized as VIEs.
KKR's funds are, for GAAP purposes, investment companies and therefore are not required to consolidate their investments
in portfolio companies even if majority-owned and controlled. Rather, the consolidated funds and vehicles reflect their
investments at fair value as described below in "—Fair Value Measurements."
An entity in which KKR holds a variable interest is a VIE if any one of the following conditions exist: (a) the total equity
investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial
support, (b) the holders of the equity investment at risk (as a group) lack either the direct or indirect ability through voting rights
or similar rights to make decisions about a legal entity's activities that have a significant effect on the success of the legal entity
or the obligation to absorb the expected losses or right to receive the expected residual returns, or (c) the voting rights of some
investors are disproportionate to their obligation to absorb the expected losses of the legal entity, their rights to receive the
expected residual returns of the legal entity, or both and substantially all of the legal entity's activities either involve or are
conducted on behalf of an investor with disproportionately few voting rights. Limited partnerships and other similar entities
where unaffiliated limited partners have not been granted (i) substantive participatory rights or (ii) substantive rights to either
dissolve the partnership or remove the general partner ("kick-out rights") are VIEs. KKR's investment funds (i) are generally
limited partnerships, (ii) generally provide KKR with operational discretion and control, and (iii) generally have fund investors
with no substantive rights to impact ongoing governance and operating activities of the fund, including the ability to remove the
general partner, and, as such, the limited partners do not have kick-out rights.
KKR consolidates all VIEs in which it is the primary beneficiary. A reporting entity is determined to be the primary
beneficiary if it holds a controlling financial interest in a VIE. A controlling financial interest is defined as (a) the power to direct
the activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of
the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be
significant to the VIE. The consolidation guidance requires an analysis to determine (i) whether an entity in which KKR holds a
variable interest is a VIE and (ii) whether KKR's involvement, through holding interests directly or indirectly in the entity or
contractually through other variable interests (for example, management and performance income), would give it a controlling
financial interest. Performance of that analysis requires the exercise of judgment. Fees earned by KKR that are customary and
commensurate with the level of effort required to provide those services, and where KKR does not hold other economic
interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity,
would not be considered to be variable interests. KKR factors in all economic interests including interests held through related
parties, to determine if it holds a variable interest. KKR determines whether it is the primary beneficiary of a VIE at the time it
becomes involved with a VIE and reconsiders that conclusion when facts and circumstances change.
For entities that are determined not to be VIEs, these entities are generally considered VOEs and are evaluated under the
voting interest model. KKR consolidates VOEs it controls through a majority voting interest or through other means.
The consolidation assessment, including the determination as to whether an entity qualifies as a VIE or VOE, depends on
the facts and circumstances for each entity, and therefore certain of KKR's investment funds may qualify as VIEs whereas others
may qualify as VOEs.
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With respect to CLOs (which are generally VIEs), in KKR's role as collateral manager, KKR generally has the power to direct
the activities of the CLO that most significantly impact the economic performance of the entity. In some, but not all cases, KKR,
through its residual interest in the CLO may have variable interests that represent an obligation to absorb losses of, or a right to
receive benefits from, the CLO that could potentially be significant to the CLO. In cases where KKR has both the power to direct
the activities of the CLO that most significantly impact the CLO's economic performance and the obligation to absorb losses of
the CLO or the right to receive benefits from the CLO that could potentially be significant to the CLO, KKR is deemed to be the
primary beneficiary and consolidates the CLO.
Global Atlantic has formed certain VIEs to hold investments, including investments in real assets, consumer and other loans
and fixed maturity securities. These VIEs issue beneficial interests primarily to Global Atlantic’s insurance companies, and Global
Atlantic maintains the power to direct the activities of the VIEs that most significantly impact their economic performance and
bears the obligation to absorb losses or receive benefits from the VIEs that could potentially be significant. Accordingly, Global
Atlantic is the primary beneficiary of these VIEs, which are consolidated in Global Atlantic’s results.
For certain consolidated renewable energy partnerships consolidated by Global Atlantic's insurance companies, Global
Atlantic uses a hypothetical liquidation at book value ("HLBV") method to allocate income and cash flows based on third-party
investors’ claim to net assets, including those for the noncontrolling interests and redeemable noncontrolling interests.
KKR classifies certain noncontrolling interests with redemption features that are not solely within the control of KKR outside
of permanent equity on its consolidated statements of financial condition. These redeemable noncontrolling interests are
reported using the greater of the carrying value at each reporting date as determined by the HLBV method or the estimated
redemption value in each reporting period.
Noncontrolling Interests
Noncontrolling interests in consolidated entities of KKR represent the non-redeemable ownership interests that are held
primarily by:
(i)third party fund investors in KKR's consolidated funds and certain other entities;
(ii)third parties in KKR's Capital Markets business line;
(iii)certain current and former employees who hold exchangeable securities; and
(iv)third-party investors in certain of Global Atlantic's consolidated entities.
Generally KKR considers all liquid short‑term investments with original maturities of three months or less when purchased
to be cash equivalents. Cash and cash equivalents includes cash held at consolidated entities, which represents cash that,
although not legally restricted, is not available generally to fund liquidity needs of KKR, as the use of such funds is generally
limited to the investment activities of KKR's investment funds and CFEs. The carrying values of cash and cash equivalents are
considered to be reasonable estimates of their fair values.
Restricted cash and cash equivalents primarily represent amounts that are held by third parties under certain of KKR's
financing and derivative transactions. The duration of this restricted cash generally matches the duration of the related
financing or derivative transaction. Global Atlantic’s restricted cash principally includes certain cash and cash equivalents held in
trusts formed for the benefit of ceding companies or held in connection with open derivative transactions. The carrying values
of restricted cash and cash equivalents are considered to be reasonable estimates of their fair values.
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Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date under current market conditions. Where available, fair value is based on
observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not
available, valuation techniques are applied. These valuation techniques involve varying levels of management estimation and
judgment, the degree of which is dependent on a variety of factors.
GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability
used in measuring financial instruments at fair value. Market price observability is affected by a number of factors, including the
type of financial instrument, the characteristics specific to the financial instrument and the state of the marketplace, including
the existence and transparency of transactions between market participants. Financial instruments with readily available quoted
prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used
in measuring fair value.
Investments and financial instruments measured and reported at fair value are classified and disclosed based on the
observability of inputs used in the determination of fair values, as follows:
Level I - Pricing inputs are unadjusted, quoted prices in active markets for identical assets or liabilities as of the
measurement date. The types of financial instruments included in this category are publicly-listed equities, U.S.
government and agencies securities, and securities sold short.
Level II - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable
as of the measurement date, and fair value is determined through the use of models or other valuation methodologies.
The types of financial instruments included in this category are credit investments, fixed-income securities held by
consolidated insurance companies, investments and debt obligations of consolidated CLO entities, convertible debt
securities indexed to publicly-listed securities, less liquid and restricted equity securities, certain funds withheld
payable at interest, and certain over-the-counter derivatives such as foreign currency option and forward contracts.
Level III - Pricing inputs are unobservable for the financial instruments and include situations where there is little, if
any, market activity for the financial instrument. The inputs into the determination of fair value require significant
management judgment or estimation. The types of financial instruments generally included in this category are private
portfolio companies, real assets investments, certain credit investments, equity method investments for which the fair
value option was elected, certain fixed-income and structured securities held by the consolidated insurance
subsidiaries, reinsurance recoverables carried at fair value, certain insurance policy liabilities carried at fair value, and
certain embedded derivatives related to (i) certain funds withheld payable at interest, and (ii) annuities and indexed
universal life products, which contain equity-indexed features.
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases,
the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on
the lowest level input that is significant to the fair value measurement in its entirety. KKR's assessment of the significance of a
particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the
asset.
A significant decrease in the volume and level of activity for the asset or liability is an indication that transactions or quoted
prices may not be representative of fair value because in such market conditions there may be increased instances of
transactions that are not orderly. In those circumstances, further analysis of transactions or quoted prices is needed, and a
significant adjustment to the transactions or quoted prices may be necessary to estimate fair value.
The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of
factors, including, for example, the type of instrument, whether the instrument has recently been issued, whether the
instrument is traded on an active exchange or in the secondary market, and current market conditions. To the extent that
valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value
requires additional judgment. Accordingly, the degree of judgment exercised by KKR in determining fair value is greatest for
instruments categorized in Level III. The variability and availability of the observable inputs affected by the factors described
above may cause transfers between Levels I, II, and III, which KKR recognizes at the beginning of the reporting period.
Investments and other financial instruments that have readily observable market prices (such as those traded on a
securities exchange) are stated at the last quoted sales price as of the reporting date. KKR does not adjust the quoted price for
these investments, even in situations where KKR holds a large position and a sale could reasonably affect the quoted price.
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Management's determination of fair value is based upon the methodologies and processes described below and may
incorporate assumptions that are management's best estimates after consideration of a variety of internal and external factors.
For certain investments where the fair value is not readily determinable, net asset value (“NAV”) is applied as a practical
expedient.
Level II Valuation Methodologies
Credit Investments, U.S. Municipal Securities, Corporate Bonds and Structured Securities: These financial instruments
generally have bid and ask prices that can be observed in the marketplace. Bid prices reflect the highest price that KKR and
others are willing to pay for an instrument. Ask prices represent the lowest price that KKR and others are willing to accept for an
instrument. For financial instruments whose inputs are based on bid-ask prices obtained from third party pricing services, fair
value may not always be a predetermined point in the bid-ask range. KKR's policy is generally to allow for mid-market pricing
and adjusting to the point within the bid-ask range that meets KKR's best estimate of fair value. KKR may also use model-derived
valuations whose inputs are observable or whose significant value drivers are observable.
Investments and Debt Obligations of Consolidated CLO Vehicles: Investments of consolidated CLO vehicles are reported
within Investments of Consolidated CFEs and are valued using the same valuation methodology as described above for credit
investments. KKR measures CLO debt obligations on the basis of the fair value of the financial assets of the CLO.
Securities Indexed to Publicly-Listed Securities: These securities are typically valued using standard convertible security
pricing models. The key inputs into these models that require some amount of judgment are the credit spreads utilized and the
volatility assumed. To the extent the company being valued has other outstanding debt securities that are publicly-traded, the
implied credit spread on the company's other outstanding debt securities would be utilized in the valuation. To the extent the
company being valued does not have other outstanding debt securities that are publicly-traded, the credit spread will be
estimated based on the implied credit spreads observed in comparable publicly-traded debt securities. In certain cases, an
additional spread will be added to reflect an illiquidity discount due to the fact that the security being valued is not publicly-
traded. The volatility assumption is based upon the historically observed volatility of the underlying equity security into which
the convertible debt security is convertible and/or the volatility implied by the prices of options on the underlying equity
security.
Equity Securities: The valuation of certain equity securities is based on (i) an observable price for an identical security
adjusted for the effect of a restriction or leverage that collateralized the equity securities and (ii) quoted prices for identical or
similar instruments in markets that are not active.
Derivatives: The valuation incorporates observable inputs comprising yield curves, foreign currency rates, interest rate
volatility and credit spreads.
Level III Valuation Methodologies
Private Equity Investments: KKR generally employs two valuation methodologies when determining the fair value of a
private equity investment. The first methodology is typically a market comparables analysis that considers key financial inputs,
which may take into account recent public and private transactions and other available measures. The second methodology
utilized is typically a discounted cash flow analysis, which incorporates significant assumptions and judgments. Estimates of key
inputs used in this methodology include the weighted average cost of capital for the investment and assumed inputs used to
calculate terminal values, such as exit EBITDA multiples. The results of the discounted cash flow approach can be significantly
impacted by these estimates. Other inputs are also used in both methodologies. In addition, when a definitive agreement has
been executed to sell an investment, KKR generally considers a significant determinant of fair value to be the consideration to
be received by KKR pursuant to the executed definitive agreement.
Upon completion of the valuations conducted using these methodologies, a weighting is ascribed to each method. When
determining the weighting ascribed to each valuation methodology, KKR considers, among other factors, the availability of
direct market comparables, the applicability of a discounted cash flow analysis, the expected hold period and manner of
realization for the investment, and in the case of investments being sold pursuant to an executed definitive agreement, an
estimated probability of such sale being completed. These factors can result in different weightings among investments in the
portfolio and in certain instances may result in up to a 100 % weighting to a single methodology.
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KKR seeks to take a uniform approach across each asset class with respect to liquidity considerations for its investment
valuations, including considering if factors exist that could make it more challenging to monetize the investment, such as (i) the
nature of KKR's governance rights, (ii) whether the portfolio company is undergoing significant restructuring activity or similar
factors, and (iii) characteristics about the portfolio company regarding its size and/or whether the portfolio company is
experiencing, or expected to experience, a significant decline in earnings. These factors generally make it more likely that the
price a portfolio company is sold or publicly offered in the near term may need to reflect factors such as these, and others,
relating to the liquidity of an investment. These factors tend to reduce the number of opportunities to sell an investment and/or
increase the time horizon over which an investment may be monetized. Depending on the applicability of these factors, KKR’s
valuation methodologies take into account impacts to valuations relating to liquidity, and during the time KKR holds the
investment, the impact of liquidity considerations on an investment’s valuation may be increased or decreased, from time to
time, based on changes to these factors. The impact of liquidity considerations on an investment is based on the facts and
circumstances of each individual investment. Accordingly, liquidity considerations ultimately considered by a market participant
upon the realization of any investment may be higher or lower than that implied by KKR in its valuations.
Real Asset Investments: Real asset investments primarily consist of infrastructure and real estate investments and are
generally valued using one or a combination of the discounted cash flow analysis, market comparables analysis and direct
income capitalization methods, which in each case incorporates significant assumptions and judgments. Key Inputs used in
these methodologies can include inputs such as the weighted average cost of capital and assumed inputs used to calculate
terminal values, including capitalization rates, and exit EBITDA multiples. Certain real asset investments are valued by KKR based
on ranges of valuations determined by independent valuation firms.
Credit Investments: Credit investments, including certain fixed-income and structured securities, are valued using values
obtained from dealers or market makers, and where these values are not available, credit investments are generally valued by
KKR based on ranges of valuations determined by an independent valuation firm. Valuation models are based on discounted
cash flow analyses, for which the key inputs are determined based on market comparables, which incorporate similar
instruments from similar issuers.
Real Estate Mortgage Loans: Real estate mortgage loans are illiquid, structured investments that are specific to the
property and its operating performance. KKR engages an independent valuation firm to estimate the fair value of each loan. KKR
reviews the quarterly loan valuation estimates provided by the independent valuation firm. These loans are generally valued
using a discounted cash flow model using discount rates derived from observable market data applied to the capital structure of
the respective sponsor and estimated property value.
Other Investments: KKR generally employs the same valuation methodologies as described above for private equity, credit
investments and real assets investments when valuing these other investments.
Funds withheld at interest: The funds withheld receivables and payables at interest carried at fair value are primarily valued
based on the fair value of the underlying investments, which have quoted prices or other observable inputs to pricing. A portion
of the funds withheld receivable and payables at interest carried at fair value represent embedded derivatives and are generally
valued as the difference between the fair value of the underlying assets and the carrying value of the host contract at the
balance sheet date.
Reinsurance recoverables: Reinsurance recoverables carried at fair value are valued using present value techniques that
consider inputs including mortality and surrender rates for the associated policies, as well as estimates of policy expenses and
the cost of capital held in support of the related closed block policy liabilities.
Insurance policy liabilities, insurance embedded derivatives, and market risk benefits: Certain insurance policy liabilities that
are carried at fair value are valued using present value techniques that discount estimated liability cash flows at a rate that
reflects the variability of those cash flows and also consider policyholder behavior (including lapse rates, surrender rates and
mortality).
Closed block policy liabilities carried at fair value are valued using present value techniques that consider inputs including
mortality and surrender rates for the respective policies, as well as estimates of policy expenses and the cost of capital held in
support of the liabilities.
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Insurance embedded derivative liabilities are related to our fixed-indexed annuity, variable annuity and indexed universal
life products, which contain equity-indexed features. These embedded derivative liabilities are calculated as the present value of
future projected benefits in excess of the projected guaranteed benefits, using an option budget as the indexed account value
growth rate and considering an adjustment to reflect the risk of nonperformance on our obligation and inputs such as projected
withdrawal and surrender activity, and mortality. KKR calculates nonperformance risk using a blend of observable peer company
credit spreads, adjusted to reflect the claims paying ability of our insurance entities, as well as an adjustment to reflect the
priority of policyholder claims.
Market risk benefits include certain contract features on fixed annuity and variable annuity products. These features include
minimum guarantees to policyholders, such as guaranteed minimum death benefits (GMDBs), guaranteed minimum withdrawal
benefits (GMWBs), and long-term care benefits (which are capped at the return of account value plus one or two times the
account value). Market risk benefits are measured at fair value using a non-option and option valuation approach based on
current net amounts at risk, market data, experience, and other factors.
Key unobservable inputs that have a significant impact on KKR's Level III valuations as described above are included in
Note 9 "Fair Value Measurements." KKR utilizes several unobservable pricing inputs and assumptions in determining the fair
value of its Level III financial instruments. These unobservable pricing inputs and assumptions may differ by financial
instruments and in the application of KKR's valuation methodologies. KKR's reported fair value estimates could vary materially if
KKR had chosen to incorporate different unobservable pricing inputs and other assumptions or, for certain applicable
investments, if KKR only used either the discounted cash flow methodology or the market comparables methodology instead of
assigning a weighting to both methodologies.
There is inherent uncertainty involved in the valuation of Level III financial instruments and there is no assurance that, upon
liquidation or sale, KKR will realize the values reflected in our valuations. Our valuations may differ significantly from the values
that would have been used had an active market for the financial instruments existed, and it is reasonably possible that the
KKR accounts for business combinations using the acquisition method of accounting, under which the purchase price of the
acquisition is allocated to the assets acquired and liabilities assumed using the fair values determined by management as of the
Goodwill represents the excess of acquisition cost over the fair value of net tangible and intangible assets acquired in
connection with an acquisition. Goodwill is assessed for impairment annually in the third quarter of each fiscal year or more
frequently if circumstances indicate impairment may have occurred. Goodwill and Intangible Assets are recorded in Other
Assets in the accompanying consolidated statements of financial condition.
In accordance with GAAP, KKR has the option to either (i) perform a quantitative impairment test or (ii) first perform a
qualitative assessment (commonly known as "step zero") to determine whether it is more likely than not that the fair value of a
reporting unit is less than its carrying amount, in which case the quantitative test would then be performed. When performing a
quantitative impairment test, KKR compares the fair value of a reporting unit with its carrying amount, including goodwill. If the
fair value of the reporting unit is less than its carrying amount, the goodwill impairment loss is equal to the excess of the
carrying value over the fair value, limited to the carrying amount of goodwill allocated to that reporting unit. The estimated fair
values of the reporting units are derived based on valuation techniques KKR believes market participants would use for each
respective reporting unit. The estimated fair values are generally determined by utilizing a discounted cash flow methodology
and methodologies that incorporate market multiples of certain comparable companies.
KKR tests goodwill for impairment at the reporting unit level, which is generally at the level of or one level below its
reportable segments, on an annual basis, or, when an event occurs or circumstances change that would more likely than not
reduce the fair value of a reporting unit below its carrying amount.
Goodwill recorded as a result of the acquisition of Global Atlantic has been allocated to the insurance segment, and
goodwill recorded as a result of the acquisitions of KJR Management ("KJRM") and Healthcare Royalty Management, LLC has
been allocated to the asset management segment.
During the third quarter of 2025, KKR performed its annual impairment analysis for the goodwill recorded at the asset
management, strategic holdings and insurance reporting units.
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KKR elected to perform step zero for the purposes of its impairment analysis for the goodwill recorded at its reporting units.
Based upon these assessments, no goodwill impairment charges were recorded. Factors considered in the qualitative
assessment included macroeconomic conditions, industry and market considerations, cost factors, current and projected
financial performance, changes in management or strategy and market capitalization.
KKR tests indefinite-lived intangible assets for impairment at the aggregate level of management contracts. KKR has the
option to either (i) perform a quantitative impairment test or (ii) first perform a qualitative assessment to determine whether it
is more likely than not that the fair value is less than its carrying amount, in which case, the quantitative test would be
performed.
Additionally, during the third quarter of 2025 KKR performed its annual impairment analysis on investment management
contracts recorded at KKR’s asset management business, which were determined to have indefinite useful lives and are not
subject to amortization. KKR elected to perform a qualitative assessment for the purposes of its impairment analysis. Based
upon this assessment, no impairment charges were recorded. Factors considered in the qualitative assessment included
macroeconomic conditions, industry and market considerations, cost factors, and current and projected financial performance.
Fixed assets consist primarily of corporate real estate, leasehold improvements, furniture and computer hardware. Such
amounts are recorded at cost less accumulated depreciation and amortization and are included in Other Assets within the
accompanying consolidated statements of financial condition. Depreciation and amortization are calculated using the
straight‑line method over the assets' estimated economic useful lives, which for leasehold improvements are the lesser of the
lease term or the life of the asset, for KKR's owner occupied corporate real estate is up to 40 years, and 3 to 7 years for other
Consolidated entities that have a functional currency that differs from KKR's reporting currency are (i) KKR's investment
management and capital markets companies located outside the United States and (ii) certain CFEs. Foreign currency
denominated assets and liabilities are translated using the exchange rates prevailing at the end of each reporting period. Results
of foreign operations are translated at the weighted average exchange rate for each reporting period. Translation adjustments
are included as a component of accumulated other comprehensive income (loss) until realized. Foreign currency income or
expenses resulting from transactions outside of the functional currency of a consolidated entity are recorded as incurred in
general, administrative and other expense in the consolidated statements of operations.
At contract inception, KKR determines if an arrangement contains a lease by evaluating whether (i) the identified asset has
been deployed in the contract explicitly or implicitly and (ii) KKR obtains substantially all of the economic benefits from the use
of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. Additionally, at
contract inception KKR will evaluate whether the lease is an operating or finance lease. Right-of-use ("ROU") assets represent
KKR’s right to use an underlying asset for the lease term and lease liabilities represent KKR’s obligation to make lease payments
arising from the lease.
ROU assets and the associated lease liabilities are recognized at the commencement date based on the present value of the
future minimum lease payments over the lease term. The discount rate implicit in the lease is generally not readily
determinable. Consequently, KKR uses its incremental borrowing rate based on the information available including, but not
limited to, collateral assumptions, the term of the lease, and the economic environment in which the lease is denominated at
the commencement date in determining the present value of the future lease payments. The ROU assets are recognized as the
initial measurement of the lease liabilities plus any initial direct costs and any prepaid lease payments less lease incentives
received, if any. The lease terms may include options to extend or terminate the lease which are accounted for when it is
reasonably certain that KKR will exercise that option. Certain leases that include lease and non-lease components are accounted
for as one single lease component. In addition to contractual rent payments, occupancy lease agreements generally include
additional payments for certain costs incurred by the landlord, such as building expenses and utilities. To the extent these are
fixed or determinable, they are included as part of the lease payments used to measure the operating lease liability.
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Operating lease expense is recognized on a straight-line basis over the lease term and is recorded within Occupancy and
Related Charges in the accompanying consolidated statements of operations. The ROU assets are included in Other Assets and
the lease liabilities are included in Accrued Expenses and Other Liabilities in the accompanying consolidated statements of
financial condition. See Note 14 "Other Assets and Accrued Expenses and Other Liabilities."
In addition to the cash-based compensation and carry pool allocations, employees may receive equity awards. Most of
these awards are subject to service-based vesting typically over a three to five-year period from the date of grant, while in
certain cases vesting is subject to the achievement of market conditions or business performance conditions. Certain of these
awards are subject to transfer restrictions and minimum retained ownership requirements. KKR considers both historical
volatility and implied volatility in estimating expected volatility. All these awards are equity-classified and the related expense is
recognized in Compensation and Benefits.
The total tax benefit recognized in the consolidated statements of operations for equity based compensation for the years
ended December 31, 2025, 2024, and 2023 was $124 million, $127 million and $51 million, respectively, and was recognized as
an income tax benefit in the consolidated statements of operations.
Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and
other events and circumstances, excluding those resulting from contributions from and distributions to owners. In the
accompanying consolidated financial statements, comprehensive income is recorded net of income taxes and is comprised of (i)
Net Income (Loss), as presented in the consolidated statements of operations, (ii) unrealized gains (losses) on available-for-sale
securities and other (iii) net effect of changes in discount rates and instrument-specific credit risk on policy liabilities and (iv)
foreign currency translation.
The tax benefit (expense) related to items of other comprehensive income was $(546 ) million, $(30 ) million, and $(339 )
million for the years ended December 31, 2025, 2024, and 2023, respectively.
KKR & Co. Inc. is a domestic corporation for U.S. federal income tax purposes and is subject to U.S. federal, state and local
income taxes at the corporate level on its share of taxable income. In addition, KKR Group Partnership and certain of its
subsidiaries operate as partnerships for U.S. federal tax purposes but as taxable entities for certain state, local or non-U.S. tax
purposes. Moreover, certain corporate subsidiaries of KKR, including certain subsidiaries of Global Atlantic, are domestic
corporations for U.S. federal income tax purposes and are subject to U.S. federal, state, and local income taxes.
Deferred Income Taxes
Income taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets
and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets
and liabilities and their respective tax basis, using tax rates in effect for the year in which the differences are expected to
reverse. The effect on deferred assets and liabilities of a change in tax rates is recognized in the consolidated statements of
operations in the period when the change is enacted.
Deferred tax assets, which are recorded in Other Assets within the consolidated statements of financial condition, are
reduced by a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion
or all of the deferred tax assets will not be realized. When evaluating the realizability of the deferred tax assets, all evidence,
both positive and negative, is considered. Items considered when evaluating the need for a valuation allowance include the
ability to carry back losses, future reversals of existing temporary differences, tax planning strategies, and expectations of future
earnings.
For a particular tax‑paying component of an entity and within a particular tax jurisdiction, deferred tax assets and liabilities
are offset and presented as a single amount within Other Assets or Accrued and Other Liabilities, as applicable, in the
accompanying statements of financial condition.
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Uncertain Tax Positions
KKR analyzes its tax filing positions in all of the U.S. federal, state and local tax jurisdictions and foreign tax jurisdictions
where it is required to file income tax returns, as well as for all open tax years in these jurisdictions. If, based on this analysis,
KKR determines that uncertainties in tax positions exist, a reserve is established. The reserve for uncertain tax positions is
recorded in Accrued and Other Liabilities in the accompanying statements of financial condition. KKR recognizes accrued
interest and penalties related to uncertain tax positions within the provision for income taxes in the consolidated statements of
operations.
KKR records uncertain tax positions on the basis of a two‑step process: (a) determination is made whether it is more likely
than not that the tax positions will be sustained based on the technical merits of the position and (b) those tax positions that
meet the more‑likely‑than‑not threshold are recognized as the largest amount of tax benefit that is greater than 50 percent
likely to be realized upon ultimate settlement with the related tax authority.
Net Income (Loss) attributable to KKR per share of common stock (Basic) is computed by dividing earnings (losses)
attributable to KKR common stockholders by the weighted average number of common shares outstanding for the period. Net
Income (Loss) attributable to KKR per share of common stock (Diluted) reflects the assumed conversion of all dilutive securities.
For further information on net income (loss) per common share, see Note 13 "Net Income (Loss) Attributable to
KKR & Co. Inc. per Share of Common Stock."
SIGNIFICANT ACCOUNTING POLICIES – ASSET MANAGEMENT AND STRATEGIC HOLDINGS
The significant accounting policies applicable to KKR’s asset management and strategic holdings businesses are described
below.
Investments consist primarily of private equity, credit, investments of consolidated CFEs, real assets, equity method and
other investments. Investments denominated in currencies other than the entity's functional currency are valued based on the
spot rate of the respective currency at the end of the reporting period with changes related to exchange rate movements
reflected in the consolidated statements of operations. Security and loan transactions are recorded on a trade date basis.
Further disclosure on investments is presented in Note 7 "Investments."
The following describes the types of securities held within each investment class.
Private Equity - Consists primarily of equity investments in operating businesses, including growth equity investments.
Credit - Consists primarily of investments in below investment grade corporate debt securities (primarily high yield bonds
and syndicated bank loans), originated, distressed and opportunistic credit, real estate mortgage loans, and interests in
unconsolidated CLOs.
Investments of Consolidated CFEs - Consists primarily of investments in below investment grade corporate debt securities
(primarily high yield bonds and syndicated bank loans) held directly by the consolidated CLOs.
Real Assets - Consists primarily of investments in (i) infrastructure assets, (ii) real estate, principally residential and
commercial real estate assets and businesses, and (iii) energy related assets, principally oil and natural gas properties.
Equity Method - Capital Allocation-Based Income - Consists primarily of (i) the capital interest KKR holds as the general
partner in certain investment funds, which are not consolidated and (ii) the carried interest component of the general
partner interest, which are accounted for as a single unit of account.
Other - Consists primarily of investments in common stock, preferred stock, warrants and options of companies that are not
private equity, real assets, credit or investments of consolidated CFEs.
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Investments held by Consolidated Investment Funds
The consolidated investment funds are, for GAAP purposes, investment companies and reflect their investments and other
financial instruments, including portfolio companies that are majority-owned and controlled by KKR's investment funds, at fair
value. KKR has retained this specialized accounting for the consolidated investment funds in consolidation. Accordingly, the
unrealized gains and losses resulting from changes in fair value of the investments and other financial instruments held by the
consolidated investment funds are reflected as a component of Net Gains (Losses) from Investment Activities in the
consolidated statements of operations.
Fair Value Option
For certain investments and other financial instruments, KKR has elected the fair value option. Such election is irrevocable
until the occurrence of certain qualifying events as defined in ASC 825, when KKR has, in addition to the ability to elect or the
option to cease applying the fair value option to an eligible item to which it was previously applied and is applied on a financial
instrument by financial instrument basis at initial recognition. KKR has elected the fair value option for certain private equity,
real assets, credit, investments of consolidated CFEs, equity method - other and other financial instruments not held through a
consolidated investment fund. Accounting for these investments at fair value is consistent with how KKR accounts for its
investments held through consolidated investment funds. Changes in the fair value of such instruments are recognized in Net
Gains (Losses) from Investment Activities in the consolidated statements of operations. Interest income on interest bearing
credit securities on which the fair value option has been elected is based on stated coupon rates adjusted for the accretion of
purchase discounts and the amortization of purchase premiums. This interest income is recorded within Interest Income in the
consolidated statements of operations.
Equity Method
For certain investments in entities over which KKR exercises significant influence but which do not meet the requirements
for consolidation and for which KKR has not elected the fair value option, KKR uses the equity method of accounting. The
carrying value of equity method investments, for which KKR has not elected the fair value option, is determined based on the
amounts invested by KKR, adjusted for the equity in earnings or losses of the investee allocated based on KKR's respective
ownership percentage, less distributions.
For equity method investments for which KKR has not elected the fair value option, KKR records its proportionate share of
the investee's earnings or losses based on the most recently available financial information of the investee, which in certain
cases may lag the date of KKR's financial statements by no more than three calendar months. As of December 31, 2025, equity
method investees for which KKR reports financial results on a lag include Marshall Wace LLP (“Marshall Wace”).
KKR evaluates its equity method investments for which KKR has not elected the fair value option for impairment whenever
events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.
The carrying value of investments classified as Equity Method - Capital Allocation-Based Income approximates fair value,
because the underlying investments of the unconsolidated investment funds are reported at fair value.
Financial Instruments held by Consolidated CFEs
KKR measures both the financial assets and financial liabilities of the consolidated CFEs in its financial statements using the
more observable of the fair value of the financial assets and the fair value of the financial liabilities which results in KKR's
consolidated net income (loss) reflecting KKR's own economic interests in the consolidated CFEs including (i) changes in the fair
value of the beneficial interests retained by KKR and (ii) beneficial interests that represent compensation for services rendered.
For the consolidated CLOs, KKR has determined that the fair value of the financial assets of the consolidated CLOs is more
observable than the fair value of the financial liabilities of the consolidated CLOs. As a result, the financial assets of the
consolidated CLOs are being measured at fair value and the financial liabilities are being measured in consolidation as: (1) the
sum of the fair value of the financial assets and the carrying value of any nonfinancial assets that are incidental to the
operations of the CLOs less (2) the sum of the fair value of any beneficial interests retained by KKR (other than those that
represent compensation for services) and KKR's carrying value of any beneficial interests that represent compensation for
services. The resulting amount is allocated to the individual financial liabilities (other than the beneficial interests retained by
KKR).
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KKR considers its principals and their related entities, unconsolidated investment funds and the portfolio companies of its
funds to be affiliates for accounting purposes. Receivables from and payables to affiliates are recorded at their current
settlement amount.
Freestanding derivatives are instruments that KKR's asset management business and certain of its consolidated funds have
entered into as part of their overall risk management and investment strategies. These derivative contracts are not designated
as hedging instruments for accounting purposes. Such contracts may include forward, swap and option contracts related to
foreign currencies and interest rates to manage foreign exchange risk and interest rate risk arising from certain assets and
liabilities. All derivatives are recognized in Other Assets or Accrued Expenses and Other Liabilities and are presented on a gross
basis in the consolidated statements of financial condition and measured at fair value with changes in fair value recorded in Net
Gains (Losses) from Investment Activities in the accompanying consolidated statements of operations. KKR's derivative financial
instruments contain credit risk to the extent that its counterparties may be unable to meet the terms of the agreements. KKR
Whether part of a hedging transaction or a transaction in its own right, securities sold short represent obligations of KKR to
deliver the specified security at the contracted price at a future point in time, and thereby create a liability to repurchase the
security in the market at the prevailing prices. The liability for such securities sold short, which is recorded in Accrued Expenses
and Other Liabilities in the statement of financial condition, is marked to market based on the current fair value of the
underlying security at the reporting date with changes in fair value recorded as unrealized gains or losses in Net Gains (Losses)
from Investment Activities in the accompanying consolidated statements of operations. These transactions may involve market
risk in excess of the amount currently reflected in the accompanying consolidated statements of financial condition.
Fees and Other, as detailed above, are accounted for as contracts with customers. Under ASC 606, Revenue from Contracts
with Customers ("ASC 606"), KKR is required to (i) identify the contract(s) with a customer, (ii) identify the performance
obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance
obligations in the contract, and (v) recognize revenue when (or as) KKR satisfies its performance obligation. In determining the
transaction price, KKR has included variable consideration only to the extent that it is probable that a significant reversal in the
amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is
resolved.
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Revenue Type | Customer | Performance Obligation | Performance Obligation Satisfied Over Time or Point In Time (1) | Variable or Fixed Consideration | Payment Terms | Subject to Return Once Recognized | Classification of Uncollected Amounts (2) |
Management Fees | Investment funds, CLOs and other vehicles | Investment management services | Over time as services are rendered | Variable consideration since varies based on fluctuations in the basis of the management fee over time | Typically quarterly or annually in arrears | No | Due from Affiliates |
Transaction Fees | Portfolio companies and third party companies | Advisory services and debt and equity arranging and underwriting | Point in time when the transaction (e.g. underwriting) is completed | Fixed consideration | Typically paid on or shortly after transaction closes | No | Due from Affiliates (portfolio companies) Other Assets (third parties) |
Monitoring Fees | |||||||
Recurring Fees | Portfolio companies | Monitoring services | Over time as services are rendered | Variable consideration since varies based on fluctuations in the basis of the recurring fee | Typically quarterly in arrears | No | Due from Affiliates |
Termination Fees | Portfolio companies | Monitoring services | Point in time when the termination is completed | Fixed consideration | Typically paid on or shortly after termination occurs | No | Due from Affiliates |
Incentive Fees | Investment funds and other vehicles | Investment management services that result in achievement of minimum investment return levels | Over time as services are rendered | Variable consideration since contingent upon the investment fund and other vehicles achieving more than stipulated investment return hurdles | Typically paid shortly after the end of the performance measuremen t period | No | Due from Affiliates |
Expense Reimbursements | Investment funds and portfolio companies | Investment management and monitoring services | Point in time when the related expense is incurred | Fixed consideration | Typically shortly after expense is incurred | No | Due from Affiliates |
Consulting Fees | Portfolio companies and other companies | Consulting and other services | Over time as services are rendered | Fixed consideration | Typically quarterly in arrears | No | Due from Affiliates |
(1)For performance obligations satisfied at a point in time, there were no significant judgments made in evaluating when a customer obtains control of the
promised service.
(2)For amounts classified in Other Assets, see Note 14 "Other Assets and Accrued Expenses and Other Liabilities." For amounts classified in Due from Affiliates,
see Note 20 "Related Party Transactions."
Management Fees
KKR provides investment management services to investment funds, CLOs, and other vehicles and entities in exchange for a
management fee. Management fees are generally determined quarterly based on an annual rate and are generally based upon
a percentage of the capital committed, capital invested or net asset value during the investment period, if applicable.
Thereafter, management fees are generally based on a percentage of remaining invested capital, net asset value, gross assets or
as otherwise defined in the respective contractual agreements. Since some of the factors that cause the fees to fluctuate are
outside of KKR's control, management fees are considered to be constrained and are therefore not included in the transaction
price. Revenue recognized for the investment management services provided is generally determined at the end of the period
because these management fees are payable on a regular basis (typically quarterly) and the uncertainty for that period is
resolved.
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Management fees earned from KKR's consolidated investment funds and other vehicles and entities are eliminated in
consolidation. However, because these amounts are funded by, and earned from, noncontrolling interests, KKR's allocated share
of the net income from the consolidated investment funds and other vehicles is increased by the amount of fees that are
eliminated. Accordingly, net income (loss) attributable to KKR and KKR’s stockholder’s equity would be unchanged, if such
investment funds and other vehicles were not consolidated.
Management fee calculations based on committed capital or invested capital are mechanical in nature and therefore do not
require the use of significant estimates or judgments. Management fee calculations based on net asset value, total assets, or
investment fair value depend on the fair value of the underlying investments within the investment vehicle.
Fee Credits
Under the terms of the management agreements with certain of its investment funds, KKR is required to share with such
funds an agreed upon percentage of certain fees, including monitoring and transaction fees earned from portfolio companies
("Fee Credits"). Investment funds earn Fee Credits only with respect to monitoring and transaction fees that are allocable to the
fund's investment in the portfolio company and not, for example, any fees allocable to capital invested through co-investment
vehicles. Fee Credits are calculated after deducting certain costs incurred in connection with pursuing potential investments that
do not result in completed transactions ("broken-deal expenses") and generally amount to 80 % for older funds formed on or
prior to January 1, 2015, or 100 % for newer funds, of allocable monitoring and transaction fees after broken-deal expenses are
recovered, although the actual percentage may vary from fund to fund. Fee Credits are recognized and owed to investment
funds concurrently with the recognition of monitoring fees, transaction fees and broken-deal expenses. Since Fee Credits are
payable to investment funds, amounts owed are generally applied as a reduction of the management fee that is otherwise billed
to the investment fund. Fee credits are recorded as a reduction of revenues in the consolidated statement of operations. Fee
Credits owed to investment funds are recorded in Due to Affiliates on the consolidated statements of financial condition. See
Note 20 "Related Party Transactions."
Transaction Fees
KKR (i) arranges debt and equity financing, places and underwrites securities offerings, and provides other types of capital
markets services for companies seeking financing in its Capital Markets business line and (ii) provides advisory services in
connection with successful Private Equity, Real Assets, and Credit and Liquid Strategies business line portfolio company
investment transactions, in each case, in exchange for a transaction fee. Transaction fees are separately negotiated for each
transaction and are generally based on (i) for Capital Markets business line transactions, a percentage of the overall transaction
size and (ii) for Private Equity, Real Assets, and Credit and Liquid Strategies business line transactions, a percentage of either
total enterprise value of an investment or a percentage of the aggregate price paid for an investment. After the contract is
established, there are no significant judgments made when determining the transaction price.
Monitoring Fees
KKR provides services in connection with monitoring portfolio companies in exchange for a fee. Recurring monitoring fees
are separately negotiated for each portfolio company. In addition, certain monitoring fee arrangements may provide for a
termination payment following an initial public offering or change of control as defined in the contractual terms of the related
agreement. These termination payments are recognized in the period when the related transaction closes. After the contract is
established, there are no significant judgments made when determining the transaction price.
Incentive Fees
KKR provides investment management services to certain investment funds, CLOs and other vehicles in exchange for a
management fee as discussed above and, in some cases an incentive fee when KKR is not entitled to a carried interest. Incentive
fee rates generally range from 5 % to 20 % of investment gains. Incentive fees are considered a form of variable consideration as
these fees are subject to reversal, and therefore the recognition of such fees is deferred until the end of each fund's
measurement period when the performance-based incentive fees become fixed and determinable. Incentive fees are generally
paid within 90 days of the end of the investment vehicles' measurement period. After the contract is established, there are no
significant judgments made when determining the transaction price.
Incentive fees earned from KKR's consolidated investment funds, CLOs, and other vehicles are eliminated in consolidation.
However, because these amounts are funded by, and earned from, noncontrolling interests, KKR's allocated share of the net
income from the consolidated investment funds, CLOs, and other vehicles is increased by the amount of fees that are
eliminated. Accordingly, net income (loss) attributable to KKR would be unchanged if such investment funds and other vehicles
were not consolidated.
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Expense Reimbursements
Providing investment management services to investment funds and monitoring KKR’s portfolio companies require KKR to
arrange for services on behalf of them. In those situations where KKR is acting as an agent on behalf of its investment funds or
portfolio companies, it presents the cost of services on a net basis as a reduction of Revenues. In all other situations, KKR is
primarily responsible for fulfilling the services and is therefore acting as a principal for those arrangements for accounting
purposes. As a result, the expense and related reimbursement associated with those services is presented on a gross basis.
Costs incurred are classified within Expenses and reimbursements of such costs are classified as Expense Reimbursements
within Revenues on the consolidated statements of operations. After the contract is established, there are no significant
judgments made when determining the transaction price.
Consulting Fees
KKR provides consulting and other services to portfolio companies and other companies in exchange for a consulting fee.
Consulting fees are separately negotiated with each company for which services are provided. After the contract is established,
there are no significant judgments made when determining the transaction price.
Capital Allocation-Based Income (Loss)
Capital allocation-based income (loss) is earned from those arrangements where KKR has a general partner capital interest
and is entitled to a disproportionate allocation of investment income (referred to hereafter as "carried interest"). KKR accounts
for its general partner interests in capital allocation-based arrangements as financial instruments under ASC 323, Investments -
Equity Method and Joint Ventures ("ASC 323") since the general partner has significant governance rights in the investment
funds in which it invests, which demonstrates significant influence. In accordance with ASC 323, KKR records equity method
income based on the proportionate share of the income of the investment fund, including carried interest, assuming the
investment fund was liquidated as of each reporting date pursuant to each investment fund's governing agreements.
Accordingly, these general partner interests are accounted for outside of the scope of ASC 606. Other arrangements
surrounding contractual incentive fees through an advisory contract are separate and distinct and accounted for in accordance
with ASC 606. In these incentive fee arrangements, accounted for in accordance with ASC 606, KKR’s economics in the entity do
not involve an allocation of capital. See "Incentive Fees" above.
Carried interest is allocated to the general partner based on cumulative fund performance to date, and where applicable,
subject to a preferred return to the funds' limited partners. At the end of each reporting period, KKR calculates the carried
interest that would be due to KKR for each investment fund, pursuant to the fund agreements, as if the fair value of the
underlying investments were realized as of such date, irrespective of whether such amounts have been realized. As the fair
value of underlying investments varies between reporting periods, it is necessary to make adjustments to amounts recorded as
carried interest to reflect either (a) positive performance resulting in an increase in the carried interest allocated to the general
partner or (b) negative performance that would cause the amount due to KKR to be less than the amount previously recognized,
resulting in a negative adjustment to carried interest allocated to the general partner. In each case, it is necessary to calculate
the carried interest on cumulative results compared to the carried interest recorded to date and to make the required positive
or negative adjustments. KKR ceases to record negative carried interest allocations once previously recognized carried interest
allocations for an investment fund have been fully reversed. KKR is not obligated to make payments for guaranteed returns or
hurdles and, therefore, cannot have negative carried interest over the life of an investment fund. Accrued but unpaid carried
interest as of the reporting date is reflected in Investments in the consolidated statements of financial condition.
Compensation and Benefits expense includes (i) base cash compensation consisting of salaries and wages, (ii) benefits, (iii)
carry pool allocations, (iv) equity-based compensation, and (v) discretionary cash bonuses.
To supplement base cash compensation, benefits, carry pool allocations, and equity-based compensation, KKR typically
pays discretionary cash bonuses, which are included in Compensation and Benefits expense in the consolidated statements of
operations, based principally on the level of segment (i) management fees and other fee revenues (including incentive fees), (ii)
realized performance income and (iii) realized investment income earned during the year. The amounts paid as discretionary
cash bonuses, if any, are at KKR’s sole discretion and vary by individual to individual and from period to period, including having
no cash bonus. KKR accrues discretionary cash bonuses when payment becomes probable and reasonably estimable which is
generally in the period when KKR makes the decision to pay discretionary cash bonuses and is based upon a number of factors
including the recognition of segment fee revenues, realized performance income, realized investment income and other factors
determined during the year.
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KKR decides whether to pay a discretionary cash bonus and determines the percentage of applicable revenue components
to pay compensation only upon the occurrence of the realization event. There is no contractual or other binding obligation that
requires KKR to pay a discretionary cash bonus to its employees, except in limited circumstances.
Carry Pool Allocation
With respect to our funds that provide for carried interest, KKR allocates a portion of the realized and unrealized carried
interest that KKR earns to Associates Holdings, which is referred to as the carry pool, from which KKR's asset management
employees and certain other carry pool participants are eligible to receive a carried interest allocation. The allocation is
determined based upon a fixed arrangement between Associates Holdings and KKR, and KKR does not exercise discretion on
whether to make an allocation to the carry pool upon a realization event. KKR refers to the portion of carried interest that KKR
allocates to the carry pool as the carry pool percentage.
As of December 31, 2023, the carry pool percentage was fixed at 40 %, 43 % or 65 % by investment fund, depending on the
fund’s vintage. For funds that closed after December 31, 2020 but before December 31, 2023, the carry pool percentage was
fixed at 65 %. For funds that closed after June 30, 2017 but before December 31, 2020, the carry pool percentage was fixed at
2024, KKR applies a carry pool percentage of up to 80 % for all funds.
This increase to the carry pool percentage was approved by a majority of KKR's independent directors, and the carry pool
percentage may not be increased above 80 % without the further approval of a majority of KKR's independent directors. For
funds that closed after December 31, 2023, the carry pool percentage is fixed at 80 %. For funds that closed prior to December
31, 2023, the carry pool percentage is calculated at a fixed percentage of 40 %, 43 % or 65 % (depending on the fund’s vintage) for
carried interest realized up to a high water mark, which was established based on the unrealized carried interest balance that
existed on January 2, 2024, plus an additional percentage amount up to 80 % based on a formulaic allocation, only if the
unrealized carried interest balance at any period end exceeds the high water mark. This imposes a limitation of the carry pool
allocation for such funds based on the amount of cumulative unrealized carried interest income earned subsequent to
December 31, 2023.
For funds that closed before December 31, 2023, if the cumulative carried interest subsequent to December 31, 2023 is not
sufficient to fund this formulaic allocation, the allocation of carried interest reverts to the carry pool percentage in effect before
this modification. As such, upon modification of the carry pool percentage effective on January 2, 2024, the cumulative
unrealized carried interest was not sufficient to fund the additional formulaic allocation percentage in excess of the pre-existing
pool percentage applicable for all funds that closed prior to December 31, 2023 will not be less than their applicable carry pool
percentages of 40 %, 43 % or 65 % prior to December 31, 2023, and will not be more than 80 %. The intent of this modification is
that for all funds that closed prior to January 2, 2024, upon the final liquidation of each fund, realized carried interest distributed
will equal the historical fund carry pool allocations up to the high water mark and only distributions of realized carried interest
in excess of the high water mark will be distributed at 80 percent if and only if the unrealized carried interest balance at any
period end exceeds the high water mark. Under no circumstance would a distribution of carried interest exceed 80 % of the total
allocable carried interest at any time.
KKR accounts for the carry pool as a compensatory profit-sharing arrangement in Accrued Expenses and Other Liabilities
within the accompanying consolidated statements of financial condition in conjunction with the related carried interest income
and it is recorded as compensation expense. The liability that is recorded in each period reflects the legal entitlement of
Associates Holdings at each point in time should the total unrealized carried interest be realized at the value recorded at each
reporting date. Upon a reversal of carried interest income, the related carry pool allocation, if any, is also reversed. Accordingly,
such compensation expense is subject to both positive and negative adjustments.
Profit Sharing Plan
KKR provides certain profit sharing programs for KKR employees. In particular, KKR provides a 401(k) plan for eligible
employees in the United States. For certain employees who are participants in the 401(k) plan, KKR may, in its discretion,
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General, administrative and other expense consists primarily of professional fees paid to legal advisors, accountants,
advisors and consultants, insurance costs, travel and related expenses, communications and information services, depreciation
and amortization charges, broken-deal expenses, placement fees and other general operating expenses. A portion of these
general administrative and other expenses, in particular broken-deal expenses, are borne by fund investors.
Investment income consists primarily of the net impact of:
i.Realized and unrealized gains and losses on investments, securities sold short, derivatives and debt obligations of
consolidated CFEs which are recorded in Net Gains (Losses) from Investment Activities. Upon disposition of an
investment, previously recognized unrealized gains or losses are reversed and a realized gain or loss is recognized.
ii.Foreign exchange gains and losses relating to mark‑to‑market activity on foreign exchange forward contracts, foreign
currency options and foreign denominated debt which are recorded in Net Gains (Losses) from Investment Activities.
iii.Dividends, which are recognized on the ex‑dividend date, or, in the absence of a formal declaration of a record date, on
the date it is received.
iv.Interest income, which is recognized as earned.
SIGNIFICANT ACCOUNTING POLICIES – INSURANCE
The significant accounting policies applicable to KKR’s insurance business, which is conducted by Global Atlantic, are
described below.
In the normal course of business, Global Atlantic enters into transactions involving various types of investments.
Investments include the following: U.S. government and agency obligations; commercial mortgage-backed securities
("CMBS"); residential mortgage-backed securities ("RMBS"); CLOs; asset-backed securities (“ABS”) and other structured
securities, (collectively, “structured securities”); corporate bonds; state and political subdivision obligations; foreign government
obligations; equity securities; mortgage and other loan receivables; policy loans; and other non-derivative investments.
Available-For-Sale Fixed Maturity Securities
Global Atlantic primarily accounts for its fixed maturity securities (including bonds, structured securities and redeemable
preferred stock) as available-for-sale ("AFS"). AFS fixed maturity securities are generally recorded on a trade-date basis and are
carried at fair value. Impairment associated with AFS fixed maturity securities is recognized as an allowance for credit losses.
The allowance for credit losses is established either by a charge to net investment-related losses in the consolidated statements
of operations, for securities identified as credit impaired after purchase, or by a gross-up recognition of an initial allowance for
purchased credit deteriorated ("PCD") securities.
PCD securities are those purchased by Global Atlantic that were assessed at acquisition as having experienced a more-than-
insignificant deterioration in credit quality since their origination. Global Atlantic considers an AFS fixed maturity security to be
PCD if there are indicators of a credit loss at the acquisition date or, in the case of structured securities, if there is a significant
difference between contractual cash flows and expected cash flows at acquisition. PCD securities also include those AFS fixed
maturity securities previously held by Global Atlantic that were similarly assessed at the time when KKR acquired a majority
controlling interest in Global Atlantic on February 1, 2021 (the "2021 GA Acquisition"). The initial amortized cost for a PCD
security equals the purchase price plus the initial allowance for credit losses. The initial allowance for credit losses is determined
using a discounted cash flow method based on the best estimate of the present value of cash flows expected to be collected.
After purchase, the accounting for a PCD security is generally consistent with that applied to all other securities.
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Unrealized gains and losses on AFS fixed maturity securities, net of tax and insurance intangible amortization, are reported
in accumulated other comprehensive income ("AOCI") in the consolidated statements of financial condition. Realized
investment gains and losses are recognized on a first-in first-out ("FIFO") basis and are reported in net investment-related gains
(losses) in the consolidated statements of operations. The amortized cost of fixed maturity securities is adjusted for impairment
charge-offs, amortization of premiums and accretion of discounts. Such amortization and accretion is calculated using the
effective yield method and included in net investment income in the consolidated statements of operations.
For structured securities, Global Atlantic recognizes interest income using a constant effective yield based on estimated
cash flows generated from internal models utilizing interest rate, default and prepayment assumptions. Effective yields for
structured securities that are not of high credit quality are recalculated and adjusted prospectively based on changes in
expected undiscounted future cash flows, after consideration of any appropriate recognition or release of an allowance for
credit losses. For structured securities that are of high credit quality, effective yields are recalculated based on payments
received and updated prepayment expectations, and amortized cost is adjusted to the amount that would have existed had the
new effective yield been applied since acquisition with a corresponding charge or credit to net investment income. Prepayment
fees are recorded when earned in net investment income in the consolidated statements of operations.
Global Atlantic generally suspends accrual of interest for securities that are more than 90 days past due and reverses any
related accrued interest to net investment income in the consolidated statements of operations. When a security is in non-
accrual status, coupon payments are recognized as interest income as cash is received, subject to consideration as to the overall
collectibility of the security. A security is returned to accrual status when Global Atlantic determines that the collection of
amounts due is probable. The allowance for credit losses excludes accrued interest from the amortized cost basis for which
losses are estimated.
Trading Fixed Maturity Securities
Global Atlantic accounts for certain fixed maturity securities as trading at acquisition, based on intent or via the election of
the fair value option. Trading securities are generally recorded on a trade-date basis and are carried at fair value, with realized
and unrealized gains and losses reported in net investment-related gains (losses) in the consolidated statements of operations.
Interest income from these securities is reported in net investment income. Trading securities, which are primarily used to
match asset and liability accounting, back funds withheld payable at interest where the investment performance is ceded to
reinsurers under the terms of the respective reinsurance agreements.
Equity Securities
Global Atlantic accounts for its investments in equity securities (including common stock and non-redeemable preferred
stock) that do not require equity method accounting or result in consolidation, at fair value. Realized and unrealized investment
gains and losses are reported in net investment-related gains (losses) in the consolidated statements of operations.
Mortgage and Other Loan Receivables
Global Atlantic purchases and originates mortgage and other loan receivables, and the majority of these loans are carried at
cost, less the allowance for credit losses and as adjusted for amortization/accretion of premiums/discounts. Loan premiums or
discounts are amortized or accreted using the effective yield method. The allowance for credit losses is established either by a
charge to net investment-related losses in the consolidated statements of operations or, for PCD mortgage and other loan
receivables, by a gross-up recognition of the initial allowance in the consolidated statements of financial condition.
PCD mortgage and other loan receivables are those purchased by Global Atlantic that were assessed at acquisition as having
experienced a more-than-insignificant deterioration in credit quality since their origination. PCD mortgage and other loan
receivables also include those mortgage and other loan receivables previously held by Global Atlantic that were similarly
assessed at the time of the 2021 GA Acquisition. The initial amortized cost for a PCD mortgage or other loan receivable equals
the purchase price plus the initial allowance for credit losses. The initial allowance for credit losses is determined using a
method consistent with that used for other similar loans. See further discussion of allowance methods below. After purchase,
the accounting for a PCD mortgage or other loan receivable is consistent with that applied to all other mortgage and other loan
receivables.
Global Atlantic has elected the fair value option for certain mortgage and other loan receivables, when purchased or
originated. Changes in the fair value of these mortgage and other loan receivables are reported in net investment related gains
(losses) in the consolidated statements of operations.
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Interest income is accrued on the principal balance of each loan based on its contractual interest rate. The accrual of
interest is generally suspended when the collection of interest is no longer probable or the collection of any portion of principal
is doubtful. Global Atlantic generally suspends accrual of interest for loans that are more than 90 days past due and reverses any
related accrued interest to net investment income in the consolidated statements of operations. When a loan is in non-accrual
status, coupon payments are generally recognized as interest income as cash is received, subject to consideration as to the
overall collectibility of the loan. A loan is returned to accrual status when Global Atlantic determines that the collection of
amounts due is probable. The allowance for credit losses for loans carried at amortized cost excludes accrued interest from the
amortized cost basis for which losses are estimated.
Policy Loans
Policy loans are loans policyholders take out against their life insurance policies. Each policy loan is fully collateralized by the
cash surrender value of the policyholder’s life insurance policy. Policy loans are carried at unpaid principal balances. Interest
income on such loans is recognized as earned using the contractually agreed upon interest rate and reflected in net investment
income in the consolidated statements of operations. Generally, interest is capitalized on the associated policy’s anniversary
date.
Real Assets and Other Investments
Real assets consist primarily of investments in real estate assets, transportation assets, energy-related assets (principally
renewable energy properties), and infrastructure assets. Other investments include equity securities, limited partnership
interests, investments in Federal Home Loan Bank ("FHLB") common stock, and other interests.
Real assets and other investments in the consolidated statements of financial condition include investments in investment
partnerships, for which Global Atlantic does not have voting control or power to direct activities. These investments are
accounted for using the equity method of accounting unless Global Atlantic’s interest is so minor that it has virtually no
influence over partnership operating or financial policies. The equity method of accounting requires that the investments be
initially recorded at cost and the carrying amount of the investment subsequently be adjusted to recognize Global Atlantic’s
share of the earnings and losses of the investee. In applying the equity method, Global Atlantic uses financial information
provided by the investee, generally on a one to three month lag due to the timing of the receipt of related financial statements.
The income from Global Atlantic’s equity method investments is included in net investment income in the consolidated
statements of operations. In limited circumstances, Global Atlantic elects to apply the fair value option to investment
partnerships, which are carried at fair value with unrealized gains and losses reported in net investment-related gains (losses) in
the consolidated statements of operations. Distributions from investment partnerships that apply equity method accounting are
classified as either investing or operating activities within the consolidated statements of cash flows based on the nature of the
distributions.
Global Atlantic consolidates investment partnerships and other entities when it has a controlling financial interest. The
results of certain consolidated investment entities are reported on a one to three month lag and intervening events are
evaluated for materiality and recognition by disclosure or otherwise, as appropriate.
Included in real assets are Global Atlantic’s investments in renewable energy entities, including partnerships and limited
liability companies. Respective investments are consolidated when Global Atlantic has a controlling financial interest, or are
accounted for using the equity method of accounting when Global Atlantic has the ability to exercise significant influence but
not control. These investments involve tiered capital structures that facilitate a waterfall of returns and allocations to ensure the
efficient use of tax credits. A conventional income statement oriented approach to the equity method of accounting, or to the
recognition of noncontrolling interests (when Global Atlantic is consolidating the investment), based on ownership percentages
does not accurately reflect the proper allocation of income and cash flows for these investments. Instead, Global Atlantic uses
the HLBV which is a balance sheet oriented approach to the equity method of accounting and to the recognition of
noncontrolling interests that allocates income and cash flows based on changes to each investor’s claim to net assets assuming a
liquidation of the investee as of each reporting date, including an assessment of the likelihood of liquidation in determining the
contractual provisions to utilize when applying the HLBV method.
The income, net of the depreciation and other expenses associated with consolidated real assets is reported in net
investment income in the consolidated statements of operations. Income on real assets is generally earned from the lease of the
assets or, in the case of energy-related assets, from the contracted sale of the energy generated. Real assets carried at
depreciated cost, excluding land, are depreciated on a straight-line basis over their estimated useful lives. As appropriate,
depreciation is recognized to the estimated salvage value of the respective asset.
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Global Atlantic has certain investments in real estate held in consolidated investment companies that account for such real
estate at fair value under investment company accounting, and this specialized accounting is retained in consolidation. Changes
in the fair value of real estate in consolidated investment companies are recognized in net investment-related gains (losses) in
the consolidated statements of operations.
Investments in equity securities are carried at fair value, with changes recognized in net investment related gains (losses) in
the consolidated statements of operations. Investments in FHLB common stock are accounted at cost.
Derivatives are instruments that derive their values from underlying asset prices, indices, foreign exchange rates, reference
rates and other inputs or a combination of these factors. Derivatives may be privately negotiated contracts, which are usually
referred to as over-the-counter ("OTC") derivatives, or they may be listed and traded on an exchange ("exchange-traded").
Global Atlantic’s derivative instruments are primarily used to hedge certain risks, including interest rate risk, equity market risk
and foreign exchange risk. Where certain criteria are met, some of these hedging arrangements may achieve hedge accounting.
Derivative instruments are recognized at estimated fair value in either funds withheld receivable at interest, other assets,
funds withheld payable at interest or accrued expenses and other liabilities in the consolidated statements of financial
condition, with changes in fair value recorded in net investment-related gains (losses) in the consolidated statements of
operations. Where certain qualifying criteria are met, some derivative instruments are designated as accounting hedges and are
recognized at estimated fair value in derivative assets or accrued expenses and other liabilities in the consolidated statements of
financial condition. For derivative instruments designated as fair value hedges, changes in fair value are recognized in the
consolidated statements of operations, in the same line where the hedged item is reported. For derivative instruments
designated as cash flow hedges, changes in fair value are initially recognized in accumulated other comprehensive income (loss)
in the consolidated statements of financial condition and subsequently reclassified to the consolidated statements of operations
when the hedged item affects earnings, in the same line item where the hedged item is reported. For derivative instruments
designated as net investment hedges, changes in fair value are recognized in accumulated other comprehensive income (loss) in
the consolidated statements of financial condition, consistent with the translation adjustment for the hedged investment.
Derivative receivables and payables with a counterparty that are subject to an International Swaps and Derivatives
Association Master Agreement ("ISDA") or other similar agreement that provides a legal right of setoff, are presented at their
net amounts. Where the legal right of setoff exists, Global Atlantic also offsets the fair value of cash collateral received or posted
Available-For-Sale Fixed Maturity Securities
One of the significant estimates related to AFS securities is the evaluation of those investments for credit losses. The
evaluation of investments for credit losses is a quantitative and qualitative quarterly process that is subject to risks and
uncertainties and involves significant estimates and judgments by management. Changes in the estimates and judgments used
in such analysis can have a significant impact on the consolidated statements of operations. Considerations relevant to the
evaluation of credit losses may include the severity of any loss position, as well as changes in market interest rates, changes in
business climate, management changes, litigation, government actions, and other similar factors that may impact an issuer’s
ability to meet current and future principal and interest obligations. Indicators of credit impairment may also include changes in
credit ratings, the frequency of late payments, pricing levels and deterioration in any, or a combination of, key financial ratios,
financial statements, revenue forecasts and cash flow projections.
For AFS fixed maturity securities in an unrealized loss position, Global Atlantic first considers the intent to sell a security, or
whether it is more-likely-than-not that it will be required to sell the security, before the recovery of its amortized cost. If Global
Atlantic intends to sell an AFS fixed maturity security with an unrealized loss or it is more-likely-than-not that it will be required
to sell an AFS fixed maturity security with an unrealized loss before recovery of its amortized cost basis, the amortized cost is
written down to fair value and a corresponding charge is recognized to net investment-related losses.
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For AFS fixed maturity securities in an unrealized loss position that Global Atlantic does not intend to sell, and will not be
required to sell, Global Atlantic bifurcates the impairment into two components: credit impairment and non-credit impairment.
Credit impairments are measured as the difference between the security’s cost or amortized cost and its estimated recoverable
value, which is the present value of its expected future cash flows discounted at the current effective interest rate. The
estimated recoverable value is subject to a floor equal to the fair value of the security. The remaining difference between the
security’s fair value and the recoverable value, if any, is the non-credit impairment. Credit impairments are recognized in the
allowance for credit losses on AFS fixed maturity securities, which is established via a charge to net investment-related losses in
the consolidated statements of operations, and non-credit impairments are charged to accumulated other comprehensive
income in the consolidated statements of financial condition.
In determining the estimated recoverable value, the review of expected future cash flows for structured securities includes
assumptions about key systemic risks (e.g., unemployment rates, housing prices) and loan-specific information (e.g.,
delinquency rates, loan-to-value ratios). Estimating future cash flows is a quantitative and qualitative process that incorporates
information received from third parties, along with assumptions and judgments about the future performance of the underlying
collateral. For corporate and government bonds the recoverable value is determined using cash flow estimates that consider
facts and circumstances relevant to the security and the issuer, including overall financial strength and secondary sources of
repayment as well as pending restructuring or disposition of assets.
In periods subsequent to the initial recognition of an allowance for credit losses on a fixed maturity security, whether for a
PCD security or a security impaired since purchase, Global Atlantic continues to monitor credit loss expectations. Deterioration
in the estimated recoverable value of a credit impaired security is recognized as an addition to the allowance for credit losses, as
limited by the amount by which the security’s fair value is less than amortized cost. Improvements in the estimated recoverable
value of a credit impaired security or improvements in the fair value of a credit impaired security that limit the amount of the
allowance result in reductions in the allowance for credit losses, which are recognized as a credit to net investment-related
gains (losses) in the consolidated statements of income.
Amounts are charged off against the allowance for credit losses when deemed uncollectible or when Global Atlantic
determines that it intends to sell, or more likely than not will be required to sell, the security. Charge-offs are reflected as a
decrease in the allowance and a direct write down in the amortized cost of the security. If Global Atlantic recovers all or a
portion of an amount previously written off on a credit impaired security, the recovery is recognized as a realized investment
gain.
Mortgage and Other Loan Receivables
Global Atlantic updates its estimate of the expected credit losses on its investments in mortgage and other loan receivables
carried at amortized cost each quarter. For loans that share similar risk characteristics, expected credit losses are measured on a
pool basis. For loans that do not share similar risk characteristics, expected credit losses are measured individually. Loans
subject to individual evaluation include those loans that are collateral dependent, where the borrower is experiencing financial
difficulty. For these collateral dependent loans, expected credit losses are measured as the difference between the fair value of
the collateral (less costs to sell, where the collateral is to be sold) and the amortized cost basis of the loan.
For commercial mortgage loans, the current expected credit losses are estimated using a model that evaluates the
probability that each loan will default and estimates the amount of loss given the occurrence of such a default over the life of
each loan in the portfolio. The model incorporates historical and current data on the relevant property market and projects
potential future paths for each loan’s collateral, considering both the net income to be generated by the collateral real estate
and its market value. The model considers how macroeconomic forecasts (such as gross domestic product, unemployment, and
interest rates) influence commercial real estate market factors (including vacancy rates, rental and income growth rates,
property value changes), and in turn how commercial real estate market conditions, in combination with loan specific
information (including debt service coverage and loan to value), drive commercial mortgage loan credit risk.
For residential mortgage loans and consumer loans, the current expected credit losses are primarily estimated using a
discounted cash flow model. The model considers loan-specific information as well as current, historical and forecasted data
relevant to the respective loans, including home prices, interest rates and unemployment. Expected cash flows are projected for
each loan and are discounted using the effective interest rate of the respective loan. Any shortfalls between the discounted cash
flows and the amortized cost of each individual loan are aggregated to determine the total allowances on the residential
mortgage loan and consumer loan portfolios. For certain residential mortgage loans secured by single-family rental properties,
current expected credit losses are determined using a model consistent with that described above for commercial mortgage
loans.
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With regard to the use of forecasts in the determination of Global Atlantic’s current expected credit losses, the reversion of
forecasts to historical data is based on reversion dynamics that depend on the specific variable and its interaction with the other
parameters of the respective model; however, the forecasts generally tend to revert to a long-term equilibrium trend within two
to three years from the forecast start date.
For the investment in other loan receivables, a variety of methodologies are used to estimate the respective current
expected credit losses. These methodologies consider the terms specific to each loan, including the value of any collateral, and
evaluate the risk of loss over the life of these loans.
Global Atlantic also assesses and measures an allowance for credit losses arising from off-balance sheet commitments,
including loan commitments, that are not unconditionally cancellable by Global Atlantic. This allowance for credit losses for off-
balance sheet commitments is determined using methods consistent with those used for the associated mortgage and other
loan receivable class, as described above, and is recognized in other liabilities in the consolidated statements of financial
condition, since there is no funded asset for the committed amount.
When all or a portion of a loan is deemed uncollectible, the uncollectible portion of the carrying amount of the loan is
charged off against the allowance. If Global Atlantic recovers all or a portion of an amount previously written off on a credit
impaired loan, the recovery is recognized as a realized investment gain.
Real Assets and Other Investments
The determination of the amount of impairment on other classes of investments also requires significant judgment and is
based upon a periodic evaluation and assessment of known and inherent risks associated with the respective asset class. Such
assessments are revised as conditions change and new information becomes available.
Impairment of consolidated real assets carried at depreciated cost is assessed whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. When indicators of impairment are present, a recoverability test is
performed to determine if the sum of the estimated undiscounted future cash flows attributable to the assets is greater than
the carrying amount. If the undiscounted estimated future cash flows are less than the carrying amount, an impairment loss is
recognized based on the amount by which the carrying amount exceeds its estimated fair value.
Impairment of investments subject to the equity method of accounting is assessed whenever events or circumstances
suggest that the carrying amount may not be recoverable. An impairment charge is recognized in earnings for a decline in value
that is determined to be other than temporary and is measured as the difference between the carrying amount and the fair
value of the equity method investment as of the balance sheet date.
Deferrals
Deferred policy acquisition costs ("DAC") consist of commissions and other costs that are directly related to the successful
acquisition of new or renewal life insurance or annuity contracts. DAC is estimated using a group approach, instead of on an
individual contract level. DAC groups, or cohorts, are by product type and issue year and consistent with the groups used in
estimating the associated insurance liability. DAC is recorded in insurance intangibles in the consolidated statements of financial
condition.
Value of business acquired ("VOBA") represents the difference between the carrying value of the purchased insurance
contract liabilities at the time of the business combination and the estimated fair value of insurance and reinsurance contracts.
VOBA can be either positive or negative. Positive VOBA is recorded in insurance intangibles. Negative VOBA is recorded in the
same financial statement line in the consolidated statements of financial condition as the associated reserves.
For limited-payment products (e.g., payout annuities), gross premiums received in excess of net premiums are deferred at
initial recognition as a deferred profit liability (“DPL”). DPL is measured using assumptions consistent with those used in the
measurement of the liability for future policy benefits, including discount rate, mortality, lapses, and expenses. DPL is recorded
in policy liabilities in the consolidated statements of financial condition.
For certain preneed contracts, the gross premium is in excess of the benefit reserve plus additional insurance liability. An
unearned front-end load ("UFEL") is established to defer the recognition of this front-end load. UFEL is recorded in policy
liabilities in the consolidated statements of financial condition.
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Amortization
DAC is amortized on a constant level basis for the grouped contracts over the expected economic life of the related
contracts. Global Atlantic amortizes DAC for all products on a constant level basis based on policy count, except for DAC for
traditional life products that are amortized on a constant level basis based on face amount. The constant level bases used for
amortization are projected using mortality and lapse assumptions that are based on Global Atlantic's experience, industry data,
and other factors and are consistent with those used for the liability for future policy benefits. If those projected assumptions
change in future periods, they will be reflected in the cohort level amortization basis at that time. Unexpected lapses, due to
higher mortality and lapse experience than expected, are recognized in the current period as a reduction of the capitalized
balances.
Amortization of DAC is included in amortization of policy acquisition costs in the consolidated statements of operations.
VOBA is generally amortized using the same methodology and assumptions used to amortize DAC.
DPL is amortized and recognized in proportion to insurance in-force for life insurance contracts and expected future benefit
payments for annuity contracts. Interest is accreted on the balance of the DPL using the discount rate determined at contract
issuance. Global Atlantic reviews and updates its estimates of cash flows for the DPL at the same time as the estimates of cash
flows for the liability for future policy benefits. When cash flows are updated, the updated estimates are used to recalculate the
DPL at contract issuance. The recalculated DPL as of the beginning of the current reporting period is compared to the carrying
amount of the DPL as of the beginning of the current reporting period, and any difference is recognized as either a charge or
credit to net policy benefits and claims.
UFEL is amortized consistent with the amortization of DAC on preneed contracts.
The key assumptions used in the calculation of the amortization of these balances are reviewed quarterly and updated if
actual experience or other evidence suggests that current assumptions should be revised. In addition, Global Atlantic formally
reviews assumptions annually as part of the assumptions review process. The effects of changes in assumptions are recorded in
net income in the period in which the changes are made.
Internal Replacements
An internal replacement is a modification in product benefits, features, rights, or coverages that occurs by the legal
extinguishment of one contract and the issuance of another contract (a contract exchange), or by amendment, endorsement, or
rider to a contract, or by the election of a benefit, feature, right, or coverage within a contract. If the modification does not
substantially change the contract, the unchanged contract is viewed as a prospective revision and the unamortized DAC is
adjusted prospectively. As such, unamortized DAC and other associated balances from the unchanged contract are retained and
acquisition costs incurred to modify the contract are not deferred but expensed as incurred. Other balances associated with the
unchanged contract, such as any liability for future policyholder benefit or market risk benefits, should similarly be accounted
for as if the unchanged contract is a continuation of the original contract. If an internal replacement represents a substantial
change, the original contract is considered to be extinguished and any related DAC or other policy balances are charged or
Separate account assets and liabilities represent segregated funds administered and invested by Global Atlantic for the
benefit of variable annuities and variable universal life insurance contractholders and certain pension funds. Global Atlantic
reports separately, as assets and liabilities, investments held in the separate accounts and liabilities of separate accounts if: (i)
such separate accounts are legally recognized; (ii) assets supporting the contract liabilities are legally insulated from Global
Atlantic’s general account liabilities; (iii) investments are directed by the contract owner or participant; and (iv) all investment
performance, net of contract fees and assessments, is passed through to the contract owner.
Separate account assets consist principally of mutual funds at fair value. The investment income and gains and losses of
these accounts generally accrue to the contractholders and therefore, are not included in Global Atlantic’s net income.
However, Global Atlantic’s net income reflects fees assessed and earned on fund values of these contracts which are presented
as a component of policy fees in the consolidated statements of operations. Realized investment gains and losses related to
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Policy liabilities, or collectively, “reserves,” are the portion of past premiums or assessments received that are set aside to
meet future policy and contract obligations as they become due. Interest accrues on these reserves and on future premiums,
which may also be available to pay for future obligations. Global Atlantic establishes reserves to pay future policyholder
benefits, claims, and certain expenses for its life policies and annuity contracts.
Reserves are estimates based on models that include many actuarial assumptions and projections. These assumptions and
projections, which are inherently uncertain, involve significant judgment, including assumptions as to the levels and/or timing of
premiums, benefits, claims, expenses, interest credits, investment results (including equity market returns), mortality, longevity,
and persistency.
The assumptions on which reserves are based are intended to represent an estimation of experience for the period that
policyholder benefits are payable. The adequacy of these reserves and the assumptions underlying those reserves are reviewed
at least annually. Global Atlantic cannot, however, determine with precision the amount or the timing of actual policyholder
benefit payments. If actual experience is better than or equal to the assumptions, then reserves would be adequate to provide
for future policyholder benefits and expenses. If experience is worse than the assumptions, additional reserves may be required
to meet future policy and contract obligations. This would result in a charge to Global Atlantic’s net income during the period in
which excess policyholder benefits are paid or an increase in reserves occurs.
For a majority of Global Atlantic’s in-force policies, including its universal life policies and most annuity contracts, the base
policy reserve is equal to the account value. For these products, the account value represents Global Atlantic’s obligation to
repay to the policyholder the amounts held on deposit. However, there are several significant blocks of business where
additional policyholder reserves are explicitly calculated, including fixed-indexed annuities, variable annuities, universal life with
secondary guarantees, indexed universal life and preneed policies.
Annuity Contracts
Fixed Indexed Annuities ("FIA")
Policy liabilities for fixed-indexed annuities earning a fixed rate of interest and certain other fixed-rate annuity products are
computed under a retrospective deposit method and represent policyholder account balances before applicable surrender
charges. For certain fixed-rate annuity products, an additional reserve was established for above market interest rate
guarantees upon acquisition. These reserves are amortized on a straight-line basis over the remaining guaranteed interest rate
period.
Certain of Global Atlantic’s fixed-indexed annuity products enable the policyholder to allocate contract value between a
fixed crediting rate and strategies which reflect the change in the value of an index, such as the S&P 500 Index or other indices.
These products are accounted for as investment-type contracts. The liability for these products consists of a combination of the
underlying account value and an embedded derivative value. The liability for the underlying account value is primarily based on
policy guarantees and its initial value is the difference between the premium payment and the fair value of the embedded
derivative. Thereafter, the account value liability is determined in a manner consistent with the accounting for a deposit liability
under the “effective yield method.” All future host balances are determined as: (i) the initial host balance; (ii) plus interest; (iii)
less applicable policyholder benefits. The interest rate used in the prior roll forward is re-determined on each valuation date,
per the effective yield method. The embedded derivative component’s fair value is based on an estimate of the policyholders’
expected participation in future increases in the relevant index. The fair value of this embedded derivative component includes
assumptions, including those about future interest rates and investment yields, future costs for options used to hedge the
contract obligations, projected withdrawal and surrender activity, benefit utilization and the level and limits on contract
participation in any future increases in the respective index option. The account value liability and embedded derivative are
recorded in policy liabilities in the consolidated statements of financial condition, with changes in value of the liabilities
recorded in policy benefits and claims in the consolidated statements of operations.
Contractholder deposit funds reserves for certain assumed blocks of fixed-indexed and fixed-rate annuity products are
accounted for as investment-type contracts. A net liability (consisting of the benefit reserve plus deferred revenue liability less
ceding commission paid between a ceding and assuming reinsurance company) is established at inception and amortized under
the effective yield method.
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Global Atlantic issues registered index-linked annuity ("RILA") contracts, which are similar to FIAs in offering the
policyholder the opportunity to participate in the performance of a market index, subject to a cap or adjusted for a participation
rate. In contrast to the FIA, the RILA enables policyholders to earn higher returns but with the risk of loss to principal and related
earnings. In particular, if performance of the market indices is negative, the policyholder may potentially absorb losses, subject
to downside protection in the form of either a "buffer" or a "floor" specified in the contract. A "buffer" is protection from
downside performance up to a certain percentage, typically 10 percent, with uncapped losses thereafter. A "floor" is protection
from downside performance in excess of the "floor," e.g., if the floor is 10% then the policyholder absorbs losses up to 10% but
not in excess.
The RILA is accounted for similar to the FIA. The RILA host contract is calculated at the inception of the contract as the value
of the initial premium minus the value of the index option, which is an embedded derivative. That initial host value is then
accreted to the guaranteed surrender value at the end of the surrender charge period. The RILA index option, which is an
embedded derivative, is required to be measured at fair value. Fair value represents the policyholders’ expected participation in
future increases in the relevant index and is calculated as the excess cash flows from the indexed crediting feature above the
guaranteed cash flows. The excess cash flows are based on the option budget methodology whereby the indexed account is
projected to grow by the option budget. A key difference from a standard FIA product is that the RILA policyholder can lose
principal on this investment. Therefore, it is possible that the embedded derivative can become negative. The option budget will
be calculated depending on the product type and strategy. The growth in the indexed account will be projected based on the
value of the options dependent upon the strategy and associated hedge construction. The fair value of this embedded derivative
component includes assumptions, including those about future interest rates and investment yields, future costs for options
used to hedge the contract obligations, projected withdrawal and surrender activity, benefit utilization and the level and limits
on contract participation in any future increases in the respective index option. The account value liability and embedded
derivative are recorded in policy liabilities in the consolidated statements of financial condition, with changes in value of the
liabilities recorded in policy benefits and claims in the consolidated statements of operations.
Variable Annuities
Global Atlantic issues and assumes variable annuity contracts for which the liabilities are included in policy liabilities in the
consolidated statements of financial condition. The change in the liabilities for these benefits is included in policy benefits and
claims in the consolidated statements of operations. Variable annuity contracts may have certain guarantees that are accounted
for as market risk benefits, which are discussed in more detail below.
Funding Agreements
Global Atlantic issues funding agreements to certain unaffiliated special purpose entities that have issued debt securities for
which payment of interest and principal is secured by such funding agreements. Global Atlantic also has similar obligations to
Federal Home Loan Banks. Global Atlantic’s funding agreements are considered investment type contracts and liabilities are net
deposits plus accrued and unpaid interest. Global Atlantic's obligation is reported in policy liabilities in the consolidated
statements of financial condition. Interest expense is calculated using the effective interest method and recorded in policy
benefits and claims in the consolidated statements of operations.
Interest-Sensitive Life Products
For universal life policies, the base policy reserve is the policyholder account value.
Policy liabilities for indexed universal life with returns linked to the performance of a specified market index are equal to
the sum of two components: (i) the fair value of the embedded derivative; and (ii) the host (or guaranteed) component. The fair
value of the embedded derivative component is based on the fair value of the policyholders’ expected participation in future
increases in the relevant index over the life of the contract. The fair value of this embedded derivative component includes
assumptions, including those about future interest rates and investment yields, future costs for options used to hedge the
contract obligations, projected benefits, benefit utilization and the level and limits on contract participation in any future
increases in the respective index option.
The initial host balance is established at the time of premium payment and is equal to the total account value less the
embedded derivative component. Thereafter, the balance of the host component is determined in a manner consistent with the
accounting for a deposit liability under the “effective yield method.” All future host balances are determined as: (i) the initial
host balance; (ii) plus interest; (iii) less applicable policyholder benefits. The interest rate used in the prior roll forward is re-
determined on each valuation date, per the effective yield method.
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Preneed Policies
Preneed insurance contracts that feature death benefits with variable growth rates are accounted for as universal life-type
contracts, which requires that the retrospective deposit method be used. This includes contracts where Global Atlantic has the
discretion to adjust death benefit growth rates up or down, or where death benefit growth rates are tied to inflation as
measured by the U.S. Consumer Price Index. The retrospective deposit method establishes a liability for policyholder benefits in
an amount determined by the account or contract balance that accrues to the benefit of the policyholder. This account value is
deemed to be equal to the contract’s statutory cash surrender value. In addition to the account balance, Global Atlantic
establishes an additional reserve for expected future discretionary benefits which is reflected as policy liabilities in KKR's
consolidated statements of financial condition.
Preneed insurance contracts without a discretionary death benefit growth rate have death benefits which are fixed and
guaranteed. For these contracts, Global Atlantic recognizes a liability for future policy benefits.
Traditional and Limited Payment Contracts
Liability for Future Policy Benefits
A liability for future policy benefits, which is the present value of estimated future policy benefits to be paid to or on behalf
of policyholders and certain related expenses less the present value of estimated future net premiums to be collected from
policyholders, is accrued as premium revenue is recognized. The liability is estimated using current assumptions that include
mortality, morbidity, lapses, and expenses. These current assumptions are based on judgments that consider Global Atlantic’s
historical experience, industry data, and other factors.
For nonparticipating traditional and limited-payment contracts, contracts are grouped into cohorts by contract type and
issue year. The liability is adjusted for differences between actual and expected experience. With the exception of the expense
assumption, Global Atlantic reviews its historical and future cash flow assumptions quarterly and updates the net premium ratio
used to calculate the liability each time the assumptions are changed. Global Atlantic has elected to use expense assumptions
that are locked in at contract inception and are not subsequently reviewed or updated.
Each quarter, Global Atlantic updates its estimate of cash flows expected over the entire life of a group of contracts using
actual historical experience and current future cash flow assumptions. These updated cash flows are discounted using the
discount rate or curve on the original contract issue date to calculate the revised net premiums and net premium ratio, which
are used to derive an updated liability for future policy benefits. This amount is then compared to the carrying amount of the
liability before the updating of cash flow assumptions to determine the current period change in liability estimate. This current
period change in the liability is the liability remeasurement gain or loss and is presented parenthetically as a separate
component of benefit expense in the consolidated statements of operations.
For nonparticipating traditional and limited-payment contracts, the discount rate assumption is a spot rate yield curve that
is derived based on upper medium grade (low credit risk) fixed-income instruments with similar duration to the liability. Global
Atlantic uses one or more external indices of corporate credit issues as its proxy for these instruments. The discount rate
assumption is updated quarterly and used to remeasure the liability at the reporting date, with the resulting change in the
discount rate reflected in other comprehensive income. For liability cash flows between two market observable points on the
yield curve, Global Atlantic interpolates the effective yield by holding the marginal rates constant. For liability cash flows that
are projected beyond the last market-observable point on the yield curve, Global Atlantic uses the last market-observable yield
level.
Payout Annuities
Payout annuities include single premium immediate annuities, annuitizations of deferred annuities, pension risk transfer
and structured settlements. These contracts subject the insurer to risks over a period that extends beyond the period or periods
in which premiums are collected. These contracts may be either non-life contingent or life contingent. Non-life contingent
annuities are accounted for as investment contracts. For life contingent annuities, Global Atlantic records a liability at the
present value of future annuity payments and estimated future expenses calculated using expected mortality and costs, and
expense assumptions. Any gross premiums received in excess of the net premium is the DPL and is recognized separately in
income in a constant relationship with the discounted amount of the insurance in-force or expected future benefit payments.
These liabilities are recorded in policy liabilities in the consolidated statements of financial condition.
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Also included under payout annuities are liabilities for disability income benefits which pertain primarily to disability income
policies that are already in claim payout status. Liabilities for disability income benefits are calculated as the present value of
future disability payments and estimated future expenses using expected mortality and costs, and interest assumptions. The
liabilities are recorded in policy liabilities in the consolidated statements of financial condition.
Whole and Term Life
Global Atlantic has established liabilities for amounts payable under insurance policies, including whole life insurance and
term life insurance policies. These policies provide death benefits in exchange for a guaranteed level premium for a specified
period of time and, in the case of whole life, a guaranteed minimum cash surrender value. Generally, liabilities for these policies
are calculated as the present value of future expected benefits to be paid, reduced by the present value of future expected net
premiums. Current assumptions are used in the establishment of liabilities for future policyholder benefits including mortality,
policy lapse, renewal, investment returns, inflation, expenses and other contingent events as appropriate for the respective
product. Each quarter, Global Atlantic updates its estimate of cash flows using actual historical experience and current future
cash flow assumptions. These updated cash flows are discounted using the discount rate or curve on the original contract issue
date to calculate the revised net premiums and net premium ratio, which are used to derive an updated liability for future policy
benefits. This amount is then compared to the carrying amount of the liability before the updating of cash flow assumptions to
determine the current period change in liability estimate. This current period change in the liability is the liability
remeasurement gain or loss and is presented parenthetically as a separate component of benefit expense in the consolidated
statements of operations.
Policy liabilities for participating whole life insurance policies are equal to the aggregate of: (i) net level premium reserves
for death and endowment policyholder benefits (calculated based upon the non-forfeiture interest rate, and mortality rated
guarantee in calculating the cash surrender values described in such contracts); and (ii) the liability for terminal dividends.
Long-Term Care
Long-term care policies are purchased by individuals to pay for specified personal care costs, typically in the later stage of
life at the onset of a loss of ability to perform certain basic activities of daily living. Policyholders pay ongoing premiums to keep
the policy in force and receive benefits in the event their health becomes impaired. Global Atlantic has established liabilities for
future policyholder benefits payable under its long-term care policies reinsured. Liabilities for long-term care benefits are
calculated as the present value of future expected benefits to be paid reduced by the present value of future expected net
premiums. Principal assumptions used in the establishment of liabilities for future policyholder benefits are mortality, morbidity
(claim incidence and continuation), lapse, and future interest rates.
Long-term care insurance risks assumed by Global Atlantic have been retroceded to a third-party reinsurer in exchange for
fixed cash flows. Net of this reinsurance, the long-term care block has the economic profile of a period certain annuity.
Product Guarantees
Market Risk Benefits
Market risk benefits are contracts or contract features that both provide protection to the policyholder from other-than-
nominal capital market risk and expose Global Atlantic to other-than-nominal capital market risk.
Market risk benefits include certain contract features on fixed annuity and variable annuity products. These features include
minimum guarantees to policyholders, such as guaranteed minimum death benefits (“GMDBs”), guaranteed minimum
withdrawal benefits (“GMWBs”), and long-term care benefits (which are capped at the return of account value plus one or two
times the account value). Market risk benefits are measured at fair value using a non-option and option valuation approach
based on current net amounts at risk, market data, experience, and other factors. Changes in fair value are recognized in net
income each period with the exception of the portion of the change in fair value due to a change in the instrument-specific
credit risk, which is recognized in other comprehensive income.
Additional Liability for Annuitization, Death, or Other Insurance Benefits
Global Atlantic establishes additional liabilities for contracts or contract features that provide for potential benefits in
addition to the account balance but are not market risk benefits or embedded derivatives. These benefits include annuitization
benefits and death or other insurance benefits (e.g., universal life secondary guarantees). For these benefits, the liability is the
sum of the current benefit ratio multiplied by cumulative assessments and accreted interest, less excess payments.
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In particular, Global Atlantic holds additional liabilities for universal life products with secondary guarantees, sometimes
referred to as no-lapse guarantees. The additional liabilities are measured using the benefit ratio approach where excess
benefits are spread over the life of the contract based on assessments collected from the policyholder. Generally, total expected
excess benefit payments are the aggregate of death claims after the policyholder account value is exhausted. The exception is
when the cost of insurance charges are insufficient to produce consistently positive earnings in the future. In this case, all death
benefits are deemed to be excess benefits. For annuitization benefits, the benefit ratio is the present value of expected
annuitization payments to be made less the accrued account balance at the expected annuitization date divided by the present
value of expected assessments during the accumulation phase of the contract, discounted at the contract rate. Expected
annuitization payments and related incremental claim adjustment expenses, expected assessments, and expected excess
payments are calculated using discount rate, mortality, lapse, and expense assumptions.
Global Atlantic recognizes a shadow reserve adjustment for the additional insurance liabilities when unrealized gains and
losses are included in the investment margin while calculating the present value of expected assessments for the benefit ratios.
Shadow reserve adjustments are recognized in other comprehensive income.
For additional liabilities for death or other insurance benefits, the discount rate assumption is based on the contract rate at
inception. The mortality, lapse, and expense assumptions are based on Global Atlantic’s experience, industry data, and other
factors. Assumptions are reviewed and updated, if necessary, at least annually. When those assumptions are updated, the
benefit ratio and the liability are remeasured, with the resulting gain or loss reflected in total benefits expense.
Outstanding claims include amounts payable relating to in course of settlement and incurred but not reported claim
liabilities. In course of settlement, claim liabilities are established for policies when Global Atlantic is notified of the death of the
policyholder, but the claim has not been paid as of the reporting date. Incurred but not reported claim liabilities are determined
using studies of past experience and are estimated using actuarial assumptions of historical claims expense, adjusted for current
trends and conditions. These estimates are continually reviewed, and the ultimate liability may vary significantly from the
amounts initially recognized, which are reflected in net income in the period in which they are determined. Changes in
Through its insurance companies, Global Atlantic has acquired several closed blocks of participating life insurance policies.
Global Atlantic has elected to account for the closed block policy liabilities using the fair value option.
The assets and cash flow generated by the closed blocks inure solely to the benefit of the holders of policies included in the
closed blocks. All closed block assets will ultimately be paid out as policyholder benefits and through policyholder dividends. In
the event that the closed blocks’ assets are insufficient to meet the benefits of the closed blocks' benefits, general assets of
Global Atlantic would be used to meet the contractual benefits to the closed blocks’ policyholders.
The closed block liabilities are measured at fair value, which comprises the fair value of the closed block assets plus the
present value of projected expenses including commissions and the cost of capital charges associated with the closed blocks. In
calculating the present value, Global Atlantic used a discount rate based on current U.S. Treasury rates, with a risk margin to
Consistent with the overall business strategy, Global Atlantic assumes certain policy risks written by other insurance
companies on a coinsurance, modified coinsurance or funds withheld coinsurance basis. Reinsurance accounting is applied for
these ceded and assumed transactions when risk transfer provisions have been met. To meet risk transfer requirements, a long-
duration reinsurance contract must transfer mortality or morbidity risks, and subject the reinsurer to a reasonable possibility of
a significant loss. Those contracts that do not meet risk transfer requirements are accounted for using deposit accounting.
Global Atlantic seeks to diversify risk and limits its overall financial exposure through reinsurance.
With respect to ceded reinsurance, Global Atlantic values reinsurance recoverables on reported claims at the time the
underlying claim is recognized in accordance with contract terms. For future policyholder benefits, Global Atlantic estimates the
amount of reinsurance recoverables based on the terms of the reinsurance contracts and historical reinsurance recovery
information. The reinsurance recoverables are based on what Global Atlantic believes are reasonable estimates and the balance
is reported as an asset in the consolidated statements of financial condition. However, the ultimate amount of the reinsurance
recoverable is not known until all claims are settled.
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The cost of reinsurance, which is the difference between the amount paid for a reinsurance contract and the amount of the
liabilities for policy benefits relating to the underlying reinsured contracts, is deferred and amortized over the reinsurance
contract period for short-duration contracts, or over the terms of the reinsured policies on a basis consistent with the reporting
of those policies for long-duration contracts. Generally, Global Atlantic amortizes cost of reinsurance based on policy count or
effective yield method, retrospectively calculated based on actual and projected future cash flows. Cost of reinsurance assets
and liabilities are reported in insurance intangibles and policy liabilities in the consolidated statements of financial condition,
respectively. Reinsurance contracts do not relieve Global Atlantic from its obligations to policyholders, and failure of reinsurers
to honor their obligations could result in losses to Global Atlantic; consequently, allowances are established for expected credit
losses, via a charge to policy benefits and claims in the consolidated statements of operations. Global Atlantic’s funds withheld
receivable at interest and reinsurance recoverable assets are reviewed for expected credit losses by considering credit ratings
for each reinsurer, historical insurance industry specific default rate factors, rights of offset, expected recovery rates upon
default and the impact of other terms specific to the reinsurance arrangement.
For funds withheld and modified coinsurance agreements, Global Atlantic has the right to receive or obligation to pay the
total return on assets supporting the funds withheld receivable at interest or funds withheld payable at interest. This indirectly
exposes Global Atlantic to the credit risk of the underlying assets. As a result, funds withheld coinsurance and modified
coinsurance agreements are viewed as total return swaps and accounted for as embedded derivatives. Embedded derivatives
are required to be separated from the host contracts and measured at fair value with changes in fair value recognized in net
income. Generally, the embedded derivative is measured as the difference between the fair value of the underlying assets and
the carrying value of the host contract at the balance sheet date. The fair value of the embedded derivative is included in the
funds withheld receivable at interest or the funds withheld payable at interest on the consolidated statements of financial
condition. Changes in the fair value of the embedded derivative are reported in operating activities on the consolidated
statements of cash flows.
Premiums related to whole life and term life insurance contracts and payout contracts with life contingencies are
recognized in premiums in the consolidated statements of operations when due from the contractholders.
Amounts received as payment for universal life and investment-type contracts are reported as deposits to contractholder
account balances and recorded in policy liabilities in the consolidated statements of financial condition. Amounts received as
payment for Global Atlantic’s fixed fund variable annuities are reported as a component of policy liabilities in the consolidated
statements of financial condition. Revenues from these contracts consist primarily of fees assessed against the contractholder
account balance for mortality, policy administration, separate account administration and surrender charges, and are reported
in policy fees in the consolidated statements of operations. Additionally, Global Atlantic earns investment income from the
investment of contract deposits in Global Atlantic’s insurance companies' general account portfolio, which is reported in net
investment income in the consolidated statements of operations.
Fees assessed that represent compensation to Global Atlantic for benefits to be provided in future periods and certain
other fees are established as an unearned revenue reserve liability and amortized into revenue over the expected life of the
related contracts in a manner consistent with DAC for these contracts. Unearned revenue reserves are reported in policy
liabilities in the consolidated statements of financial condition and amortized into policy fees in the consolidated statements of
operations. Benefits and expenses for these products include claims in excess of related account balances, expenses for contract
administration and interest credited to contractholder account balances in the consolidated statements of operations.
Global Atlantic primarily earns revenues from premiums, policy fees, income from investments, and other administration,
management, and distribution fees. For the year ended December 31, 2025, Global Atlantic’s revenue was sourced in its entirety
from the Americas (100 %), based on the geographic region of the reporting subsidiary company. Due to a large block
reinsurance transaction during the year ended December 31, 2024, Global Atlantic recognized more than 10% of KKR's total
consolidated revenues with one reinsurance counterparty in the period. Predominantly all of Global Atlantic’s fixed assets are
located in the United States.
Other income is primarily comprised of expense allowances on ceded reinsurance, administration fees, management fees
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Insurance expenses are primarily comprised of commissions expense, premium taxes, amortization of acquired distribution
General, administrative and other expenses are primarily comprised of employee compensation and benefit expenses,
Global Atlantic measured compensation cost for certain legacy deferred or cash-based compensation plans that were in
place prior to 2024 using an intrinsic value method, beginning on the date of grant, and remeasured the value at each reporting
period until the awards are settled. Accrued compensation expense is recognized in general, administrative and other expenses
in the consolidated statements of operations and within accrued expenses and other liabilities in the consolidated statements of
Scope Application of Profits Interest and Similar Awards
In March 2024, the FASB issued ASU 2024–01, “Compensation—Stock Compensation (Topic 718): Scope Application of
Profits Interest and Similar Awards” (“ASU 2024–01”). ASU 2024–01 amends the guidance in Accounting Standard Codification
718 (“ASC 718”) by adding an illustrative example to demonstrate and clarify how to apply the scope guidance to determine
whether profits interests and similar awards should be accounted for as a share-based payment arrangement under ASC 718 or
another standard. KKR adopted this accounting standard effective for the year ended December 31, 2025, and its adoption did
not have a material impact on KKR’s consolidated financial statements.
Income Tax Disclosure Improvements
In December 2023, the FASB issued ASU 2023–09, "Income Taxes (Topic 740): Improvements to Income Tax
Disclosures" ("ASU 2023–09"). ASU 2023–09 intends to enhance the transparency and decision usefulness of income tax
disclosures, requiring disaggregated information about an entity’s effective tax rate reconciliation as well as income taxes paid.
KKR adopted this accounting standard effective for the year ended December 31, 2025 on a prospective basis and its adoption
did not have a material impact on KKR's consolidated financial statements. Refer to Note 18 "Income Taxes" for the expanded
disclosures.
Future Application of Accounting Standards
Expense Disaggregation Disclosures
In November 2024, the FASB issued ASU 2024–03, “Income Statement—Reporting Comprehensive Income—Expense
Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024–03”). ASU 2024–03
requires a public business entity to provide disaggregated disclosures of certain categories of expenses on an annual and interim
basis including employee compensation, depreciation, and intangible asset amortization for each income statement expense
line item that contains those expenses. The update will be effective for annual periods beginning after December 15, 2026 and
interim periods beginning after December 15, 2027. KKR is currently evaluating the impact of adopting this guidance on its
consolidated financial statements and disclosures.
Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity
In May 2025, the FASB issued ASU 2025–03, “Business Combinations (Topic 805) and Consolidation (Topic 810):
Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity” (“ASU 2025–03”). ASU 2025–03 requires an
entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a
variable interest entity (“VIE”) that meets the definition of a business to consider certain factors to determine which entity is the
accounting acquirer. The update will be effective for annual periods and interim periods in annual reporting periods beginning
after December 15, 2026. KKR does not expect the adoption to have a material impact on its consolidated financial statements
or disclosures.
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Measurement of Credit Losses for Accounts Receivable and Contract Assets
In July 2025, the FASB issued ASU 2025–05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit
Losses for Accounts Receivable and Contract Assets” (“ASU 2025–05”). ASU 2025–05 simplifies the application of the current
expected credit loss model for current accounts receivable and current contract assets under ASC 606. The update will be
effective for annual periods and interim periods in annual reporting periods beginning after December 15, 2025. Early adoption
is permitted. KKR is currently evaluating the impact of adopting this guidance on its consolidated financial statements and
disclosures.
Targeted Improvements to the Accounting for Internal-Use Software
In September 2025, the FASB issued ASU 2025–06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic
350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025–06”). ASU 2025–06 eliminates
accounting consideration of software project development stages; requires capitalizing software costs when (i) management has
authorized and committed to funding the project and (ii) it is ‘probable’ the project will be completed and the software used to
perform its intended function (the ‘probable-to-complete’ threshold). ASU 2025–06 also enhances the guidance around the
‘probable-to-complete’ threshold. The update will be effective for annual periods and interim periods in annual reporting
periods beginning after December 15, 2027. KKR is currently evaluating the impact of adopting this guidance on its consolidated
financial statements and disclosures.
Financial Instruments—Credit Losses (Topic 326): Purchased Loans
In November 2025, the FASB issued ASU 2025-08, Financial Instruments - Credit Losses (Topic 326) - Purchased Loans. ASU
2025-08 expands the population of purchased financial assets subject to the gross-up approach in Topic 326. As a result of this
update, loans (excluding credit cards) acquired without credit deterioration and deemed “seasoned” as defined in the ASU will
follow the gross-up approach at acquisition and the initial allowance for credit losses is added to the purchase price to
determine the amortized cost basis of the loans. The update is effective for fiscal years beginning after December 15, 2026,
including interim periods within those fiscal years, and is to be applied prospectively to loans acquired on or after adoption;
early adoption is permitted. KKR is currently evaluating the impact of adopting this guidance on its consolidated financial
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3. REVENUES – ASSET MANAGEMENT AND STRATEGIC HOLDINGS
revenues consisted of the following:
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Management Fees | $ | $ | $ | ||
Fee Credits | ( | ( | ( | ||
Transaction Fees | |||||
Monitoring Fees | |||||
Incentive Fees | |||||
Expense Reimbursements | |||||
Consulting Fees | |||||
Total Fees and Other | |||||
Carried Interest | |||||
General Partner Capital Interest | |||||
Total Capital Allocation-Based Income (Loss) | |||||
Total Revenues | $ | $ | $ | ||
KKR earns management fees, incentive fees, and capital allocation-based income (loss) from investment funds, CLOs, and
other vehicles whose primary focus is making investments in specified geographical locations and KKR also earns transaction,
monitoring, and consulting fees from portfolio companies located in varying geographies. For the years ended December 31,
2025, 2024, and 2023, over 10% of KKR's total Asset Management and Strategic Holdings consolidated revenues were earned
in the United States.
For the year ended December 31, 2025, $2.5 billion, $0.8 billion, and $0.7 billion of total fees and other were generated in
the Americas, Europe/Middle East, and Asia-Pacific, respectively. For the year ended December 31, 2024, $2.2 billion,
$0.8 billion, and $0.7 billion of total fees and other were generated in the Americas, Europe/Middle East, and Asia-Pacific,
respectively. For the year ended December 31, 2023, $1.8 billion, $0.6 billion, and $0.6 billion of total fees and other were
generated in the Americas, Europe/Middle East, and Asia-Pacific, respectively. The determination of the geographic region
was based on the geographic focus of the associated investment vehicle or where the portfolio company is headquartered.
For the year ended December 31, 2025, $2.1 billion, $0.5 billion, and $1.1 billion of total capital allocation-based income
(loss) were generated in the Americas, Europe/Middle East, and Asia-Pacific, respectively. For the year ended December 31,
2024, $2.2 billion, $0.4 billion, and $0.9 billion of total capital allocation-based income (loss) were generated in the Americas,
Europe/Middle East, and Asia-Pacific, respectively. For the year ended December 31, 2023, $1.5 billion, $0.4 billion, and
$0.9 billion of total capital allocation-based income (loss) were generated in the Americas, Europe/Middle East, and Asia-
Pacific, respectively. The determination of the geographic region was based on the geographic focus of the associated
investment vehicle.
For the year ended December 31, 2025, none of KKR’s flagship private equity funds contributed more than 10% of KKR's
total Asset Management and Strategic Holdings consolidated revenues. For the year ended December 31, 2024, revenues
from one of KKR’s flagship private equity funds contributed more than 10% of KKR's total Asset Management and Strategic
Holdings revenues representing approximately $0.9 billion. For the year ended December 31, 2023, revenues from one of
KKR’s flagship private equity funds contributed more than 10% of KKR's total Asset Management and Strategic Holdings
revenues representing approximately $1.0 billion.
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4. NET GAINS (LOSSES) FROM INVESTMENT ACTIVITIES – ASSET MANAGEMENT AND
STRATEGIC HOLDINGS
Net Gains (Losses) from Investment Activities in the consolidated statements of operations consist primarily of the
realized and unrealized gains and losses on investments (including foreign exchange gains and losses attributable to foreign
denominated investments and related activities) and other financial instruments, including those for which the fair value
option has been elected. Unrealized gains or losses result from changes in the fair value of these investments and other
financial instruments during a period. Upon disposition of an investment or financial instrument, previously recognized
unrealized gains or losses are reversed and an offsetting realized gain or loss is recognized in the current period.
For the Year Ended December 31, 2025 | |||||
Net Realized Gains (Losses) | Net Unrealized Gains (Losses) | Total | |||
Private Equity (1) | $ | $ | $ | ||
Credit (1) | ( | ||||
Investments of Consolidated CFEs (1) | ( | ( | ( | ||
Real Assets (1) | ( | ||||
Other Investments (1) | ( | ||||
Foreign Exchange Forward Contracts and Options (2) | ( | ( | |||
Securities Sold Short (2) | ( | ( | ( | ||
Other Derivatives (2) | ( | ( | ( | ||
Debt Obligations and Other (3) | |||||
Net Gains (Losses) From Investment Activities (4) | $ | $ | $ | ||
For the Year Ended December 31, 2024 | |||||
Net Realized Gains (Losses) | Net Unrealized Gains (Losses) | Total | |||
Private Equity (1) | $ | $ | $ | ||
Credit (1) | ( | ( | |||
Investments of Consolidated CFEs (1) | ( | ||||
Real Assets (1) | ( | ||||
Other Investments (1) | ( | ||||
Foreign Exchange Forward Contracts and Options (2) | |||||
Securities Sold Short (2) | ( | ( | |||
Other Derivatives (2) | ( | ( | |||
Debt Obligations and Other (3) | |||||
Net Gains (Losses) From Investment Activities (4) | $ | $ | $ | ||
For the Year Ended December 31, 2023 | |||||
Net Realized Gains (Losses) | Net Unrealized Gains (Losses) | Total | |||
Private Equity (1) | $( | $ | $ | ||
Credit (1) | ( | ||||
Investments of Consolidated CFEs (1) | ( | ||||
Real Assets (1) | ( | ( | |||
Other Investments (1) | ( | ||||
Foreign Exchange Forward Contracts and Options (2) | ( | ( | |||
Securities Sold Short (2) | ( | ( | |||
Other Derivatives (2) | |||||
Debt Obligations and Other (3) | ( | ( | |||
Net Gains (Losses) From Investment Activities (4) | $( | $ | $ | ||
(1)See Note 7 "Investments."
(2)See Note 8 "Derivatives" and Note 14 "Other Assets and Accrued Expenses and Other Liabilities."
(3)See Note 16 “Debt Obligations.”
(4)As of December 31, 2025, 2024, and 2023, net gains from Equity Method Investments were $1,298.1 million, $1,016.1 million, and $913.7 million.
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5. NET INVESTMENT INCOME – INSURANCE
Net investment income for Global Atlantic is comprised primarily of (i) interest income, including amortization of
premiums and accretion of discounts, (ii) dividend income from common and preferred stock, (iii) earnings from investments
accounted for under equity method accounting, and (iv) lease income on real assets.
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Fixed Maturity Securities | $ | $ | $ | ||
Mortgage and Other Loan Receivables | |||||
Real Assets | |||||
Short-Term and Other Investment Income | |||||
Income Assumed from Funds Withheld Receivable at Interest | |||||
Policy Loans | |||||
Income Ceded to Funds Withheld Payable at Interest | ( | ( | ( | ||
Total Investment Income (Losses) | |||||
Less Investment Expenses: | |||||
Investment Management and Administration | |||||
Real Asset Depreciation and Maintenance | |||||
Interest Expense on Derivative Collateral and Repurchase Agreements | |||||
Net Investment Income | $ | $ | $ | ||
6. NET INVESTMENT-RELATED GAINS (LOSSES) – INSURANCE
Net investment-related gains (losses) from insurance operations primarily consist of (i) realized gains (losses) from the
disposal of investments, (ii) unrealized gains (losses) from investments held for trading, equity securities, real estate
investments accounted for under investment company accounting, and investments with fair value remeasurements
recognized in earnings as a result of the election of a fair-value option, (iii) unrealized gains (losses) on funds withheld
receivable and payable at interest, (iv) unrealized gains (losses) from derivatives (excluding certain derivatives designated as
hedge accounting instruments), and (v) allowances for credit losses, and other impairments of investments.
Years Ended December 31, | ||||||
2025 | 2024 | 2023 | ||||
Realized Gains (Losses) on Available-For-Sale Fixed Maturity Securities | $( | $( | $( | |||
Credit Loss Allowances on Available-For-Sale Securities | ( | ( | ( | |||
Credit Loss Allowances on Mortgage and Other Loan Receivables | ( | ( | ( | |||
Credit Loss Allowances on Unfunded Commitments | ( | |||||
Impairment of Available-for-Sale Fixed Maturity Securities Due to Intent to Sell | ( | |||||
Unrealized Gains (Losses) on Fixed Maturity Securities Classified as Trading | ( | |||||
Unrealized Gains (Losses) on Other Investments Recognized Under the Fair-Value Option and Equity Investments | ( | |||||
Unrealized Gains (Losses) on Real Assets | ( | ( | ||||
Realized Gains on Real Assets | ||||||
Net Gains (Losses) on Derivative Instruments | ( | |||||
Realized Gains (Losses) on Funds Withheld at Interest Payable Portfolio | ||||||
Realized Gains (Losses) on Funds Withheld at Interest Receivable Portfolio | ( | ( | ( | |||
Foreign Exchange Gains (Losses) on Non-USD Denominated Investments | ( | |||||
Other Realized Gains (Losses) | ( | |||||
Net Investment-Related Gains (Losses) | $( | $( | $( | |||
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Allowance for Credit Losses
Available-For-Sale Fixed Maturity Securities
Global Atlantic:
Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||||||
Corporate | Structured | Total | Corporate | Structured | Total | ||||||
Balance, as of Beginning of Period | $ | $ | $ | $ | $ | $ | |||||
Initial Credit Loss Allowance Recognized on Securities with No Previously Recognized Allowance | |||||||||||
Accretion of Initial Credit Loss Allowance on PCD Securities | |||||||||||
Reductions Due to Sales (or Maturities, Pay Downs or Prepayments) During the Period of Securities with a Previously Recognized Credit Loss Allowance | ( | ( | ( | ( | ( | ( | |||||
Net Additions / Reductions for Securities with a Previously Recognized Credit Loss Allowance | ( | ||||||||||
Balances Charged Off | ( | ( | ( | ( | ( | ||||||
Recoveries of credit losses previously written-off | |||||||||||
Balance, as of End of Period | $ | $ | $ | $ | $ | $ | |||||
Year Ended December 31, 2023 | |||||
Corporate | Structured | Total | |||
Balance, as of Beginning of Period | $ | $ | $ | ||
Initial Credit Loss Allowance Recognized on Securities with No Previously Recognized Allowance | |||||
Accretion of Initial Credit Loss Allowance on PCD Securities | |||||
Reductions Due to Sales (or Maturities, Pay Downs or Prepayments) During the Period of Securities with a Previously Recognized Credit Loss Allowance | ( | ( | ( | ||
Net Additions / Reductions for Securities with a Previously Recognized Credit Loss Allowance | ( | ||||
Balances Charged Off | ( | ( | |||
Balance, as of End of Period | $ | $ | $ | ||
Mortgage and Other Loan Receivables
summarized below:
Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||||||||||
Commercial Mortgage Loans | Residential Mortgage Loans | Consumer and Other Loan Receivables | Total | Commercial Mortgage Loans | Residential Mortgage Loans | Consumer and Other Loan Receivables | Total | ||||||||
Balance, as of Beginning of Period | $ | $ | $ | $ | $ | $ | $ | $ | |||||||
Net Provision (Release) | ( | ||||||||||||||
Charge-Offs | ( | ( | ( | ( | ( | ( | ( | ( | |||||||
Recoveries of Amounts Previously Charged-Off | |||||||||||||||
Balance, as of End of Period | $ | $ | $ | $ | $ | $ | $ | $ | |||||||
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Year Ended December 31, 2023 | |||||||
Commercial Mortgage Loans | Residential Mortgage Loans | Consumer and Other Loan Receivables | Total | ||||
Balance, as of Beginning of Period | $ | $ | $ | $ | |||
Net Provision (Release) | ( | ||||||
Charge-offs | ( | ( | ( | ( | |||
Recoveries of amounts previously charged-off | |||||||
Balance, as of End of Period | $ | $ | $ | $ | |||
Proceeds and Gross Gains and Losses from Voluntary Sales
maturity securities were as follows:
Years Ended December 31, | ||||||
2025 | 2024 | 2023 | ||||
AFS Fixed Maturity Securities: | ||||||
Proceeds from Voluntary Sales | $ | $ | $ | |||
Gross Gains | $ | $ | $ | |||
Gross Losses | $( | $( | $( | |||
7. INVESTMENTS
December 31, 2025 | December 31, 2024 | ||
Asset Management and Strategic Holdings | |||
Private Equity | $ | $ | |
Credit | |||
Investments of Consolidated CFEs | |||
Real Assets | |||
Equity Method - Capital Allocation-Based Income | |||
Other Investments | |||
Investments – Asset Management and Strategic Holdings (7) | $ | $ | |
Insurance | |||
Fixed Maturity Securities, Available-For-Sale, at Fair Value (1) | $ | $ | |
Mortgage and Other Loan Receivables | |||
Fixed Maturity Securities, Trading, at Fair Value (2) | |||
Real Assets (3)(4) | |||
Other Investments (4)(5) | |||
Funds Withheld Receivable at Interest | |||
Policy Loans | |||
Investments – Insurance (6) | $ | $ | |
Total Investments | $ | $ |
(1)Amortized cost of $96.7 billion and $85.6 billion, net of credit loss allowances of $288.7 million and $275.3 million as of December 31, 2025 and
December 31, 2024, respectively.
(2)Amortized cost of $27.2 billion and $23.8 billion as of December 31, 2025 and December 31, 2024, respectively. Trading fixed maturity securities are
primarily held to back funds withheld payable at interest. The investment performance on these investments is ceded to third-party reinsurers.
(3)Net of accumulated depreciation of $782.2 million and $623.1 million as of December 31, 2025 and December 31, 2024, respectively.
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(4)Real assets of $1.1 billion and $1.0 billion as of December 31, 2025 and December 31, 2024, respectively, and other investments of $855.0 million and
$682.9 million as of December 31, 2025 and December 31, 2024, respectively, are accounted for using the equity method of accounting. In addition,
Global Atlantic has investments that would otherwise require the equity method of accounting for which the fair value option has been elected. The
carrying amount of real assets and other investments for which the fair value option has been elected was $730.7 million and $436.3 million, respectively,
as of December 31, 2025, and the carrying amount of these investments was $471.5 million and $4.8 million, respectively, as of December 31, 2024.
Global Atlantic's maximum exposure to loss related to equity method investments, including those which fair value has been elected, is limited to the
carrying value of these investments plus unfunded commitments of $447.2 million and $23.0 million as of December 31, 2025 and December 31, 2024,
respectively.
(5)Other investments include equity securities, limited partnership interests, investments in FHLB common stock, and other interests.
(6)From time to time, Global Atlantic makes investments with counterparties that are managed by or are affiliates of KKR. As of December 31, 2025 and
December 31, 2024, the carrying value reflects the elimination for the portion of applicable investments that are held in Asset Management and Strategic
Holdings consolidated investment vehicles and other entities.
(7)As of December 31, 2025 and December 31, 2024, investments of $11.5 billion and $8.3 billion, respectively, were accounted for using the equity method
of accounting.
As of December 31, 2025 and 2024, there were no investments which represented greater than 5
Equity Method
KKR evaluates its equity method investments for which KKR has not elected the fair value option for impairment
whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be
recoverable. During the years ended December 31, 2025, 2024, and 2023, there were no impairment charges related to equity
method investments.
Summarized Financial Information
KKR evaluates each of its equity method investments to determine if any are significant as defined in the regulations
promulgated by the U.S. Securities and Exchange Commission (the "SEC"). As of and for the years ended December 31, 2025,
2024, and 2023, no individual equity method investment held by KKR met the significance criteria. As such, KKR is not required
to present separate financial statements for any of its equity method investments.
KKR's equity method investments assuming 100
December 31, 2025 | December 31, 2024 | ||
Asset Management and Strategic Holdings | |||
Total Assets | $ | $ | |
Total Liabilities | $ | $ | |
Total Equity | $ | $ | |
Insurance | |||
Total Assets | $ | $ | |
Total Liabilities | $ | $ | |
Total Equity | $ | $ |
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The following table shows summarized financial information relating to the statements of operations for all of KKR's
equity method investments assuming 100
For the Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Asset Management and Strategic Holdings | |||||
Investment Related Revenues | $ | $ | $ | ||
Other Revenues | |||||
Investment Related Expenses | |||||
Other Expenses | |||||
Net Realized and Unrealized Gains (Losses) from Investments | |||||
$ | $ | $ | |||
Insurance | |||||
Revenues | $ | $ | $ | ||
Expenses | |||||
$ | $( | $( | |||
Net Income (Loss) | $ | $ | $ | ||
Fixed Maturity Securities
Cost or Amortized Cost | Allowance for Credit Losses (1)(2) | Gross Unrealized | Fair Value | ||||||
As of December 31, 2025 | Gains | Losses | |||||||
AFS Fixed Maturity Securities Portfolio by Type: | |||||||||
U.S. Government and Agencies | $ | $ | $ | $( | $ | ||||
U.S. State, Municipal and Political Subdivisions | ( | ||||||||
Corporate | ( | ( | |||||||
Residential Mortgage-Backed Securities, or “RMBS” | ( | ( | |||||||
Commercial Mortgage-Backed Securities, or “CMBS” | ( | ( | |||||||
CLOs | ( | ( | |||||||
Asset-Backed Securities, or “ABSs”and Other Structured Securities | ( | ( | |||||||
Total AFS Fixed Maturity Securities | $ | $( | $ | $( | $ | ||||
(1)Represents the cumulative amount of credit impairments that have been recognized in the consolidated statements of operations (as net investment
gains (losses)) or that were recognized as a gross-up of the purchase price of PCD securities. Amount excludes unrealized losses related to non-credit
impairment.
(2)Includes credit loss allowances on purchase-credit deteriorated fixed maturity securities of $(5.8 ) million.
Cost or Amortized Cost | Allowance for Credit Losses (1)(2) | Gross Unrealized | Fair Value | ||||||
As of December 31, 2024 | Gains | Losses | |||||||
AFS Fixed Maturity Securities Portfolio by Type: | |||||||||
U.S. Government and Agencies | $ | $ | $ | $( | $ | ||||
U.S. State, Municipal and Political Subdivisions | ( | ||||||||
Corporate | ( | ( | |||||||
RMBS | ( | ( | |||||||
CMBS | ( | ( | |||||||
CLOs | ( | ( | |||||||
ABSs and other structured securities | ( | ( | |||||||
Total AFS Fixed Maturity Securities | $ | $( | $ | $( | $ | ||||
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(1)Represents the cumulative amount of credit impairments that have been recognized in the consolidated statements of operations (as net investment
gains (losses)) or that were recognized as a gross-up of the purchase price of PCD securities. Amount excludes unrealized losses related to non-credit
impairment.
(2)Includes credit loss allowances on purchase-credit deteriorated fixed maturity securities of $(9.2 ) million.
Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties, or Global Atlantic may have the right to put or sell the obligations
back to the issuers. Structured securities are shown separately as they have periodic payments and are not due at a single
maturity.
As of December 31, 2025 | Cost or Amortized Cost (Net of Allowance) | Fair Value | |
Due in One Year or Less | $ | $ | |
Due After One Year Through Five Years | |||
Due After Five Years Through Ten Years | |||
Due After Ten Years | |||
Subtotal | |||
RMBS | |||
CMBS | |||
CLOs | |||
ABSs and other structured securities | |||
Total AFS Fixed Maturity Securities | $ | $ |
Securities in a Continuous Unrealized Loss Position
loss position:
Less Than 12 Months | 12 Months or More | Total | |||||||||
As of December 31, 2025 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||
AFS Fixed Maturity Securities Portfolio by Type: | |||||||||||
U.S. Government and Agencies | $ | $( | $ | $( | $ | $( | |||||
U.S. State, Municipal and Political Subdivisions | ( | ( | ( | ||||||||
Corporate | ( | ( | ( | ||||||||
RMBS | ( | ( | ( | ||||||||
CMBS | ( | ( | ( | ||||||||
CLOs | ( | ( | ( | ||||||||
ABSs and other structured securities | ( | ( | ( | ||||||||
Total AFS Fixed Maturity Securities in a Continuous Loss Position | $ | $( | $ | $( | $ | $( | |||||
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Less Than 12 Months | 12 Months or More | Total | |||||||||
As of December 31, 2024 | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||
AFS Fixed Maturity Securities Portfolio by Type: | |||||||||||
U.S. Government and Agencies | $ | $( | $ | $( | $ | $( | |||||
U.S. State, Municipal and Political Subdivisions | ( | ( | ( | ||||||||
Corporate | ( | ( | ( | ||||||||
RMBS | ( | ( | ( | ||||||||
CMBS | ( | ( | ( | ||||||||
CLOs | ( | ( | ( | ||||||||
ABSs and other structured securities | ( | ( | ( | ||||||||
Total AFS Fixed Maturity Securities in a Continuous Loss Position | $ | $( | $ | $( | $ | $( | |||||
Unrealized gains and losses can be created by changing interest rates or several other factors, including changing credit
spreads. Global Atlantic had gross unrealized losses on below investment grade AFS fixed maturity securities of $279.7 million
and $557.4 million as of December 31, 2025 and 2024, respectively. The single largest unrealized loss on AFS fixed maturity
securities was $43.8 million and $54.4 million as of December 31, 2025 and 2024, respectively. Global Atlantic had 4,294 and
As of December 31, 2025, AFS fixed maturity securities in an unrealized loss position for 12 months or more consisted of
allowance for credit losses had a fair value and gross unrealized losses of $1.4 billion and $125.5 million, respectively, as of
December 31, 2025. These fixed maturity securities primarily relate to Corporate, RMBS, and U.S. state, municipal and
political subdivisions fixed maturity securities, which have depressed values due primarily to an increase in interest rates since
the purchase of these securities. Unrealized losses were not recognized in net income on these fixed maturity securities since
Global Atlantic neither intends to sell the securities nor does it believe that it is more likely than not that it will be required to
sell these securities before recovery of their cost or amortized cost basis. For securities with significant declines in value,
individual security level analysis was performed utilizing underlying collateral default expectations, market data, and industry
analyst reports.
Mortgage and Other Loan Receivables
December 31, 2025 | December 31, 2024 | ||
Commercial Mortgage Loans(1) | $ | $ | |
Residential Mortgage Loans(1) | |||
Consumer Loans(1) | |||
Other Loan Receivables(1)(2) | |||
Total Mortgage and Other Loan Receivables | $ | $ | |
Allowance for Credit Losses(3) | ( | ( | |
Total Mortgage and Other Loan Receivables, Net of Allowance for Credit Losses | $ | $ |
(1)Includes $11.2 billion and $1.6 billion of loans carried at fair value using the fair value option as of December 31, 2025 and 2024, respectively. These loans
had unpaid principal balances of $11.3 billion and $1.8 billion as of December 31, 2025 and 2024, respectively.
(2)As of December 31, 2025, other loan receivables consisted primarily of business loans, warehouse facility loans backed by agricultural mortgages,
renewable energy development loans, loans collateralized by aircraft, and loans collateralized by residential mortgages, of $415.6 million, $368.5 million,
$347.2 million, $245.7 million, and $200.2 million, respectively. As of December 31, 2024, other loan receivables consisted primarily of renewable energy
development loans, warehouse facility loans backed by agricultural mortgages, loans collateralized by aircraft, and loans collateralized by residential
mortgages of $547.2 million, $503.0 million, $271.2 million, and $200.0 million, respectively.
(3)Includes credit loss allowances on purchase-credit deteriorated mortgage and other loan receivables of $(41.6 ) million and $(72.2 ) million as of December
31, 2025 and 2024, respectively.
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Years | Residential | Commercial | Total Mortgage Loans | ||
2026 | |||||
2027 | |||||
2028 | |||||
2029 | |||||
2030 | |||||
Thereafter | |||||
Total | $ | $ | $ |
Actual maturities could differ from contractual maturities because borrowers may have the right to prepay (with or
without prepayment penalties) and loans may be refinanced.
Global Atlantic diversifies its mortgage loan portfolio by both geographic region and property type to reduce
concentration risk. The following tables present the mortgage loans by geographic region and property type:
Mortgage Loans – Carrying Value by Geographic Region | December 31, 2025 | December 31, 2024 | |||||
South Atlantic | $ | $ | |||||
Pacific | |||||||
Middle Atlantic | |||||||
West South Central | |||||||
Mountain | |||||||
International | |||||||
New England | |||||||
East North Central | |||||||
East South Central | |||||||
West North Central | |||||||
Other Regions | |||||||
Total by Geographic Region | $ | $ | |||||
Mortgage Loans – Carrying Value by Property Type | December 31, 2025 | December 31, 2024 | |||||
Residential | $ | $ | |||||
Multi-Family | |||||||
Industrial | |||||||
Office Building | |||||||
Other Property Types | |||||||
Retail | |||||||
Warehouse | |||||||
Total by Property Type | $ | $ | |||||
As of December 31, 2025 and 2024, Global Atlantic had $318.4 million and $406.9 million of mortgage loans that were 90
days or more past due or are in the process of foreclosure, respectively, and have been classified as non-income producing
(i.e., in a non-accrual status). Global Atlantic ceases accrual of interest on loans that are more than 90 days past due or are in
the process of foreclosure and recognizes income as cash is received.
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Credit Quality Indicators
Mortgage and Consumer Loan Receivable Performance Status
performance status as of December 31, 2025 and 2024:
By Year of Origination | |||||||||||||
Performance Status as of December 31, 2025 | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | Total | ||||||
Commercial Mortgage Loans | |||||||||||||
Gross Charge-Offs for the Year Ended December 31, 2025 | $ | $ | $ | $ | $( | $( | $( | ||||||
Current | $ | $ | $ | $ | $ | $ | $ | ||||||
30 to 59 Days Past Due | |||||||||||||
60 to 89 Days Past Due | |||||||||||||
90 Days or More Past Due or in Process of Foreclosure | |||||||||||||
Total Commercial Mortgage Loans | $ | $ | $ | $ | $ | $ | $ | ||||||
Residential Mortgage Loans | |||||||||||||
Gross Charge-Offs for the Year Ended December 31, 2025 | $ | $( | $( | $( | $( | $( | $( | ||||||
Current | $ | $ | $ | $ | $ | $ | $ | ||||||
30 to 59 Days Past Due | |||||||||||||
60 to 89 Days Past Due | |||||||||||||
90 Days or More Past Due or in Process of Foreclosure | |||||||||||||
Total Residential Mortgage Loans | $ | $ | $ | $ | $ | $ | $ | ||||||
Consumer Loans | |||||||||||||
Gross Charge-Offs for the Year Ended December 31, 2025 | $( | $( | $( | $( | $( | $( | $( | ||||||
Current | $ | $ | $ | $ | $ | $ | $ | ||||||
30 to 59 Days Past Due | |||||||||||||
60 to 89 Days Past Due | |||||||||||||
90 Days or More Past Due or in Process of Foreclosure | |||||||||||||
Total Consumer Loans | $ | $ | $ | $ | $ | $ | $ | ||||||
Total Mortgage and Consumer Loan Receivables | $ | $ | $ | $ | $ | $ | $ | ||||||
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By Year of Origination | |||||||||||||
Performance Status as of December 31, 2024 | 2024 | 2023 | 2022 | 2021 | 2020 | Prior | Total | ||||||
Commercial Mortgage Loans | |||||||||||||
Gross Charge-Offs for the Year Ended December 31, 2024 | $ | $ | $( | $( | $( | $( | $( | ||||||
Current | $ | $ | $ | $ | $ | $ | $ | ||||||
30 to 59 Days Past Due | |||||||||||||
60 to 89 Days Past Due | |||||||||||||
90 Days or More Past Due or in Process of Foreclosure | |||||||||||||
Total Commercial Mortgage Loans | $ | $ | $ | $ | $ | $ | $ | ||||||
Residential Mortgage Loans | |||||||||||||
Gross Charge-Offs for the Year Ended December 31, 2024 | $( | $( | $( | $( | $( | $( | $( | ||||||
Current | $ | $ | $ | $ | $ | $ | $ | ||||||
30 to 59 Days Past Due | |||||||||||||
60 to 89 Days Past Due | |||||||||||||
90 Days or More Past Due or in Process of Foreclosure | |||||||||||||
Total Residential Mortgage Loans | $ | $ | $ | $ | $ | $ | $ | ||||||
Consumer Loans | |||||||||||||
Gross Charge-Offs for the Year Ended December 31, 2024 | $( | $( | $( | $( | $( | $( | $( | ||||||
Current | $ | $ | $ | $ | $ | $ | $ | ||||||
30 to 59 Days Past Due | |||||||||||||
60 to 89 Days Past Due | |||||||||||||
90 Days or More Past Due or in Process of Foreclosure | |||||||||||||
Total Consumer Loans | $ | $ | $ | $ | $ | $ | $ | ||||||
Total Mortgage and Consumer Loan Receivables | $ | $ | $ | $ | $ | $ | $ | ||||||
Loan-to-Value Ratio on Mortgage Loans
The loan-to-value ratio is expressed as a percentage of the current amount of the loan relative to the value of the
underlying collateral. The following table summarizes Global Atlantic's loan-to-value ratios for its commercial mortgage loans
as of December 31, 2025 and 2024:
Loan-to-Value as of December 31, 2025, by Year of Origination | Carrying Value Loan-to-Value 70% and Less | Carrying Value Loan-to-Value 71% - 90% | Carrying Value Loan-to-Value Over 90% | Total Carrying Value | |||
2025 | $ | $ | $ | $ | |||
2024 | |||||||
2023 | |||||||
2022 | |||||||
2021 | |||||||
2020 | |||||||
Prior | |||||||
Total Commercial Mortgage Loans | $ | $ | $ | $ |
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Loan-to-Value as of December 31, 2024, by Year of Origination | Carrying Value Loan-to-Value 70% and Less | Carrying Value Loan-to-Value 71% - 90% | Carrying Value Loan-to-Value Over 90% | Total Carrying Value | |||
2024 | $ | $ | $ | $ | |||
2023 | |||||||
2022 | |||||||
2021 | |||||||
2020 | |||||||
2019 | |||||||
Prior | |||||||
Total Commercial Mortgage Loans | $ | $ | $ | $ |
Changing economic conditions and updated assumptions affect Global Atlantic's assessment of the collectibility of
commercial mortgage loans. Changing vacancies and rents are incorporated into the analysis that Global Atlantic performs to
measure the allowance for credit losses. In addition, Global Atlantic continuously monitors its commercial mortgage loan
portfolio to identify risk. Areas of emphasis are properties that have exposure to specific geographic events or have
deteriorating credit.
The weighted average loan-to-value ratio for Global Atlantic's residential mortgage loans was 64 % and 63 % as of
December 31, 2025 and 2024, respectively.
Loan Modifications
Global Atlantic may modify the terms of a loan when the borrower is experiencing financial difficulties, as a means to
optimize recovery of amounts due on the loan. Modifications may involve temporary relief, such as payment forbearance for
a short period of time (where interest continues to accrue) or may involve more substantive changes to a loan. Changes to the
terms of a loan, pursuant to a modification agreement, are factored into the analysis of the loan’s expected credit losses,
under the allowance model applicable to the loan.
For commercial mortgage loans, modifications for borrowers experiencing financial difficulty are tailored for individual
loans and may include interest rate relief, maturity extensions or, less frequently, principal forgiveness. For both residential
mortgage loans and consumer loans, the most common modifications for borrowers experiencing financial difficulty, aside
from insignificant delays in payment, typically involve deferral of missed payments to the end of the loan term, interest rate
relief, or maturity extensions.
modifications have been granted during the years ended December 31, 2025 and 2024:
Year Ended December 31, 2025 by Loan Type | Deferral of Amounts Due | Interest Rate Relief | Maturity Extension | Combination(1) | Total | Percentage of Total Carrying Value Outstanding | |||||
Commercial Mortgage Loans | $ | $ | $ | $ | $ | ||||||
Residential Mortgage Loans | |||||||||||
Consumer Loans | |||||||||||
Total(2) | $ | $ | $ | $ | $ |
(1)Includes modifications involving a combination of deferral of amounts due, interest rate relief, or maturity extension.
(2)Excludes loans that were modified during the year, but were repaid in full by year end.
Year Ended December 31, 2024 by Loan Type | Deferral of Amounts Due | Interest Rate Relief | Maturity Extension | Combination(1) | Total | Percentage of Total Carrying Value Outstanding | |||||
Commercial Mortgage Loans | $ | $ | $ | $ | $ | ||||||
Residential Mortgage Loans | |||||||||||
Consumer Loans | |||||||||||
Total(2) | $ | $ | $ | $ | $ |
(1)Includes modifications involving a combination of deferral of amounts due, interest rate relief, or maturity extension.
(2)Excludes loans that were modified during the year, but were repaid in full by year end.
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All of the commercial mortgage loans that had a combination of modifications had both interest rate relief and maturity
extensions. For commercial mortgage loans granted interest rate relief, this relief generally involved either a change from a
floating rate or a decrease in fixed rate to a weighted average rate of 4.2 % and 4.9 % for the years ended December 31, 2025
and 2024, respectively. The maturity extensions for commercial mortgage loans added a weighted-average of 1.9 years and
Global Atlantic has commitments to lend additional funds of $16.9 million for the modified commercial mortgage loans
disclosed above.
2025:
Performance Status as of December 31, 2025 by Loan Type | Current | 30-59 Days Past Due | 60-89 Days Past Due | 90 Days or More Past Due or in Process of Foreclosure | Total | ||||
Commercial Mortgage Loans | $ | $ | $ | $ | $ | ||||
Residential Mortgage Loans | |||||||||
Consumer Loans | |||||||||
Total(1) | $ | $ | $ | $ | $ |
(1)Loans may have been modified more than once during the twelve months period; in this circumstance, the loan is only included once in this table.
Modified loans that were subsequently repaid are excluded.
Repurchase Agreement Transactions
As of December 31, 2025 and December 31, 2024, Global Atlantic participated in repurchase agreements with a notional
value of $663.8 million and $261.4 million, respectively. As collateral for these transactions, Global Atlantic typically posts AFS
fixed maturity securities and/or mortgage and other loan receivables, which are included in Insurance – Investments in the
consolidated statements of financial condition. The gross obligation for repurchase agreements is reported in Other Liabilities
in the consolidated statements of financial condition.
of the repurchase agreements as of December 31, 2025 and December 31, 2024 is presented in the following tables:
As of December 31, 2025 | Overnight | <30 Days | 30 - 90 Days | > 90 Days | Total | ||||
Residential Mortgage Loans | $ | $ | $ | $ | $ | ||||
Total Assets Pledged | $ | $ | $ | $ | $ |
As of December 31, 2024 | Overnight | <30 Days | 30 - 90 Days | > 90 Days | Total | ||||
Residential Mortgage Loans | $ | $ | $ | $ | $ | ||||
Total Assets Pledged | $ | $ | $ | $ | $ |
Other Pledges and Restrictions
Certain Global Atlantic subsidiaries are members of regional banks in the Federal Home Loan Banks ("FHLB") system and
such membership requires the members to own stock in these FHLBs. Global Atlantic owns an aggregate of $122.0 million and
$117.8 million (accounted for at cost basis) of stock in FHLBs as of December 31, 2025 and 2024, respectively. In addition,
Global Atlantic insurance company subsidiaries have entered into funding agreements with the FHLB, which require that
Global Atlantic pledge eligible assets, such as fixed maturity securities and mortgage loans, as collateral. Assets pledged as
collateral for these funding agreements had a carrying value of $7.1 billion and $4.6 billion as of December 31, 2025 and 2024,
respectively.
The capital stock of one of Global Atlantic’s equity method investments has been pledged as collateral security for the
due payment and performance of the debt obligations of the investee. Global Atlantic’s investment subject to this pledge had
a carrying value of $873.6 million and $834.4 million as of December 31, 2025 and 2024, respectively.
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Insurance – Statutory Deposits
As of December 31, 2025 and 2024, the carrying value of the assets on deposit with various state and U.S. governmental
authorities were $145.1 million and $141.1 million, respectively.
8. DERIVATIVES
Asset Management and Strategic Holdings
KKR and certain of its consolidated funds have entered into derivative transactions as part of the overall risk management
for their investment strategies. These derivative contracts are not designated as hedging instruments for accounting
purposes. Such contracts may include forward, swap, and option contracts related to foreign currencies and interest rates to
manage foreign exchange risk and interest rate risk arising from certain assets and liabilities. All derivatives are recognized in
Other Assets or Accrued Expenses and Other Liabilities and are presented on a gross basis in the consolidated statements of
financial condition and measured at fair value with changes in fair value recorded in Net Gains (Losses) from Investment
Activities in the accompanying consolidated statements of operations. KKR's derivative financial instruments contain credit
risk to the extent that its counterparties may be unable to meet the terms of the agreements. KKR attempts to reduce this risk
by limiting its counterparties to major financial institutions with strong credit ratings.
Insurance
Global Atlantic holds derivative instruments that are primarily used in its hedge program. Global Atlantic has established
a hedge program that seeks to mitigate economic impacts primarily from interest rate and equity price movements, while
taking into consideration accounting and capital impacts.
Global Atlantic hedges interest rate and equity market risks associated with its insurance liabilities including fixed-indexed
annuities, indexed universal life policies, variable annuity policies, and variable universal life policies, among others. For fixed-
indexed annuities and indexed universal life policies, Global Atlantic generally seeks to use static hedges to offset the
exposure primarily created by changes in its embedded derivative balances. Global Atlantic generally purchases options which
replicate the crediting rate strategies, often in the form of call spreads. Call spreads are the purchase of a call option matched
by the sale of a different call option. For variable annuities and variable universal life policies, Global Atlantic generally seeks
to dynamically hedge its exposure to changes in the value of the guarantee it provides to policyholders. Doing so requires the
active trading of several financial instruments to respond to changes in market conditions. In addition, Global Atlantic enters
into inflation swaps to manage inflation risk associated with inflation-indexed preneed policies.
In the context of specific reinsurance transactions in the institutional channel or acquisitions, Global Atlantic may also
enter into hedges which are designed to limit short-term market risks to the economic value of the target assets. From time to
time, Global Atlantic also enters into hedges designed to mitigate interest rate and credit risk in investment income, interest
expense, and fair value of assets and liabilities. In addition, Global Atlantic enters into currency swaps and forwards to
manage any foreign exchange rate risks that may arise from investments and policy liabilities denominated in foreign
currencies.
Global Atlantic attempts to mitigate the risk of loss due to ineffectiveness under these derivative investments through a
regular monitoring process which evaluates the program’s effectiveness. Global Atlantic monitors its derivative activities by
reviewing portfolio activities and risk levels. Global Atlantic also oversees all derivative transactions to ensure that the types
of transactions entered into and the results obtained from those transactions are consistent with both Global Atlantic's risk
management strategy and its policies and procedures.
The restricted cash which was held in connection with open derivative transactions with exchange brokers was $49.9
million and $135.7 million as of December 31, 2025 and 2024, respectively.
Global Atlantic also has embedded derivatives related to reinsurance contracts that are accounted for on a modified
coinsurance and funds withheld basis. An embedded derivative exists because the arrangement exposes the reinsurer to
third-party credit risk. These embedded derivatives are included in funds withheld receivable and payable at interest in the
consolidated statements of financial condition.
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Credit Risk
Global Atlantic may be exposed to credit-related losses in the event of nonperformance by its counterparties to
derivatives. Generally, the current credit exposure of Global Atlantic’s derivatives is limited to the positive fair value of
derivatives less any collateral received from the counterparty.
Global Atlantic manages the credit risk on its derivatives by entering into derivative transactions with highly rated
financial institutions and other creditworthy counterparties and, where feasible, by trading through central clearing
counterparties. Global Atlantic further manages its credit risk on derivatives via the use of master netting agreements, which
require the daily posting of collateral by the party in a liability position. Counterparty credit exposure and collateral values are
monitored regularly and measured against counterparty exposure limits. The provisions of derivative transactions may allow
for the termination and settlement of a transaction if there is a downgrade to Global Atlantic’s financial strength ratings
below a specified level.
As of December 31, 2025 | Notional Value | Derivative Assets | Derivative Liabilities | ||
Asset Management and Strategic Holdings | |||||
Foreign Exchange Contracts and Options | $ | $ | $ | ||
Other Derivatives | |||||
Total Asset Management and Strategic Holdings | $ | $ | $ | ||
Insurance | |||||
Derivatives Designated as Hedge Accounting Instruments: | |||||
Interest Rate Contracts | $ | $ | $ | ||
Foreign Currency Contracts | |||||
Total Derivatives Designated as Hedge Accounting Instruments | $ | $ | $ | ||
Derivatives Not Designated as Hedge Accounting Instruments: | |||||
Equity Market Contracts | $ | $ | $ | ||
Interest Rate Contracts | |||||
Foreign Currency Contracts | |||||
Other Contracts | |||||
Total Derivatives Not Designated as Hedge Accounting Instruments | $ | $ | $ | ||
Counterparty Netting(2) | — | ( | ( | ||
Cash Collateral | — | ( | ( | ||
Total Insurance(1) | $ | $ | $ | ||
Fair Value Included Within Total Assets and Liabilities | $ | $ | $ |
(1)Excludes embedded derivatives. The fair value of these embedded derivatives related to assets was $78.9 million and the fair value of these embedded
derivatives related to liabilities was $5.6 billion as of December 31, 2025.
(2)Represents netting of derivative exposures covered by qualifying master netting agreements.
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As of December 31, 2024 | Notional Value | Derivative Assets | Derivative Liabilities | ||
Asset Management and Strategic Holdings | |||||
Foreign Exchange Contracts and Options | $ | $ | $ | ||
Other Derivatives | |||||
Total Asset Management and Strategic Holdings | $ | $ | $ | ||
Insurance | |||||
Derivatives Designated as Hedge Accounting Instruments: | |||||
Interest Rate Contracts | $ | $ | $ | ||
Foreign Currency Contracts | |||||
Total Derivatives Designated as Hedge Accounting Instruments | $ | $ | $ | ||
Derivatives Not Designated as Hedge Accounting Instruments: | |||||
Equity Market Contracts | $ | $ | $ | ||
Interest Rate Contracts | |||||
Foreign Currency Contracts | |||||
Other Contracts | |||||
Total Derivatives Not Designated as Hedge Accounting Instruments | $ | $ | $ | ||
Counterparty Netting(2) | — | ( | ( | ||
Cash Collateral | — | ( | ( | ||
Total Insurance(1) | $ | $ | $ | ||
Fair Value Included Within Total Assets and Liabilities | $ | $ | $ |
(1)Excludes embedded derivatives. The fair value of these embedded derivatives related to assets was $125.9 million and the fair value of these embedded
derivatives related to liabilities was $3.2 billion as of December 31, 2024.
(2)Represents netting of derivative exposures covered by qualifying master netting agreements.
Derivatives Designated as Accounting Hedges
Where Global Atlantic has derivative instruments that are designated and qualify as accounting hedges, these derivative
instruments receive hedge accounting.
Fair Value Hedges
Global Atlantic has designated foreign exchange derivative contracts, including forwards and swaps, to hedge the foreign
currency risk associated with foreign currency-denominated bonds in fair value hedges. These foreign currency-denominated
bonds are accounted for as AFS fixed maturity securities. Changes in the fair value of the hedged AFS fixed maturity securities
due to changes in spot exchange rates are reclassified from AOCI to earnings, which offsets the earnings impact of the spot
changes of the foreign exchange derivative contracts, both of which are recognized within investment-related gains (losses).
The effectiveness of these hedges is assessed using the spot method. Changes in the fair value of the foreign exchange
derivative contracts related to changes in the spot-forward difference are excluded from the assessment of hedge
effectiveness and are deferred in AOCI and recognized in earnings using a systematic and rational method over the life of the
foreign exchange derivative contracts. The amortized cost of the AFS fixed maturity securities in qualifying foreign exchange
fair value hedges was $3.7 billion and $2.1 billion as of December 31, 2025 and 2024, respectively.
Global Atlantic has designated interest rate swaps to hedge the interest rate risk associated with certain debt and policy
liabilities. These fair value hedges generally qualify for the shortcut method of assessing hedge effectiveness. The following
table presents the financial statement classification, carrying amount, and cumulative fair value hedging adjustments for
qualifying hedged debt and policy liabilities:
As of December 31, 2025 | As of December 31, 2024 | ||||||
Carrying Amount of Hedged Liabilities | Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Liabilities(1) | Carrying Amount of Hedged Liabilities | Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Liabilities(1) | ||||
Debt | $ | $( | $ | $( | |||
Policy Liabilities | ( | ( | |||||
(1)Includes $154.6 million and $193.3 million of hedging adjustments on discontinued hedging relationships as of December 31, 2025 and 2024, respectively.
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Cash Flow Hedges
Global Atlantic has designated bond forwards to hedge the interest rate risk associated with the planned purchase of AFS
fixed maturity securities in cash flow hedges. These arrangements are hedging purchases through January 2030 and are
expected to affect earnings until 2057. Regression analysis is used to assess the effectiveness of these hedges.
As of December 31, 2025 and 2024, there was a cumulative gain (loss) of $(213.9 ) million and $(249.7 ) million,
respectively, on the currently designated bond forwards recorded in accumulated other comprehensive income (loss).
Amounts deferred in accumulated other comprehensive income (loss) are reclassified to net investment income following the
qualifying purchases of AFS securities, as an adjustment to the yield earned over the life of the purchased securities, using the
effective interest method.
Global Atlantic has designated interest rate swaps to hedge the interest rate risk associated with floating rate
investments, including AFS fixed maturity securities and commercial mortgage loans. Regression analysis is used to assess the
effectiveness of these hedges.
As of December 31, 2025 and 2024, there was a cumulative gain (loss) of $(22.3 ) million and $(60.8 ) million on the
currently designated interest rate swaps recorded in accumulated other comprehensive income (loss), respectively. Amounts
deferred in accumulated other comprehensive gain (loss) are reclassified to net investment income in the same period during
which the hedged investments affect earnings.
Global Atlantic has designated foreign exchange swaps to hedge the foreign exchange risk associated with certain policy
liabilities in cash flow hedges. The critical terms of the swaps match those of the hedged liabilities, such that the respective
hedging relationship is expected to be perfectly effective (pursuant to ASC 815-20-25-84).
As of December 31, 2025, there was a cumulative gain (loss) of $(1.7 ) million on the currently designated foreign
exchange swaps recorded in accumulated other comprehensive loss. Amounts deferred in accumulated other comprehensive
loss are reclassified to net policy benefits and claims in the same period during which the hedged policy liabilities affect
earnings due to changes in spot foreign exchange rates. The amount reclassified from accumulated other comprehensive loss
for the swap designated in the hedge comprises changes in its fair value due to changes in spot exchange rates and an
allocated portion of its initial spot-forward difference.
For all cash flow hedges, Global Atlantic estimates that the amount of gains/losses in accumulated other comprehensive
income (loss) to be reclassified into earnings in the next 12 months will not be material.
Net Investment Hedges
Global Atlantic has designated cross currency swaps to hedge the foreign currency risk associated with certain foreign
currency-denominated equity method investments in net investment hedges. The effectiveness of these hedges is assessed
based on changes in spot rates.
Changes in the fair value of the swaps are recognized in other comprehensive income, consistent with the translation
adjustment for the hedged investment. The component comprising the difference between forward rates and spot rates is
amortized to net investment income over the life of the swaps. As of December 31, 2025 and 2024, the cumulative foreign
currency translation gain (loss) recorded in accumulated other comprehensive income related to net investment hedges was
$(14.1 ) million and $(25.3 ) million, respectively.
Derivative Results
instruments and related hedged items, where applicable. None of the Asset Management and Strategic Holdings derivatives
are designated as hedge accounting instruments. The table below includes only derivatives held by Global Atlantic.
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Year Ended December 31, 2025 | ||||||||||
Net Investment- Related Gains (Losses) | Net Investment Income | Net Policy Benefits and Claims | Interest Expense | Change in AOCI | ||||||
Derivatives Designated as Hedge Accounting Instruments: | ||||||||||
Fair Value Hedges | ||||||||||
Gains (Losses) on Derivatives Designated as Hedge Instruments: | ||||||||||
Interest Rate Contracts | $— | $— | $ | $ | $— | |||||
Foreign Currency Contracts | ( | — | — | |||||||
Total Gains (Losses) on Derivatives Designated as Hedge Instruments | $( | $ | $ | $ | $ | |||||
Gains (Losses) on Hedged Items: | ||||||||||
Interest Rate Contracts | $— | $— | $( | $( | $— | |||||
Foreign Currency Contracts | — | — | — | — | ||||||
Total Gains (Losses) on Hedged Items | $ | $— | $( | $( | $— | |||||
Amortization for Gains (Losses) Excluded from Assessment of Effectiveness: | ||||||||||
Foreign Currency Contracts | $ | $— | $— | $— | $— | |||||
Total Amortization for Gains (Losses) Excluded from Assessment of Effectiveness | $ | $— | $— | $— | $— | |||||
Total Gains (Losses) on Fair Value Hedges, Net of Hedged Items | $ | $ | $— | $— | $ | |||||
Cash Flow Hedges | ||||||||||
Foreign Currency Contracts | $— | $— | $( | $— | $( | |||||
Interest Rate Contracts | ( | — | — | |||||||
Total Gains (Losses) on Cash Flow Hedges | $ | $( | $( | $— | $ | |||||
Net Investment Hedges | ||||||||||
Gains (Losses) on Derivatives Designated as Hedge Instruments | $ | $ | $— | $— | $ | |||||
Total Gains (Losses) on Net Investment Hedges | $ | $ | $— | $— | $ | |||||
Derivatives Not Designated as Hedge Accounting Instruments: | ||||||||||
Insurance | ||||||||||
Embedded Derivatives - Funds Withheld Receivable | $( | $— | $— | $— | $— | |||||
Embedded Derivatives - Funds Withheld Payable | ( | — | — | — | — | |||||
Equity Index Options | — | — | — | — | ||||||
Equity Futures Contracts | ( | — | — | — | — | |||||
Interest Rate Contracts | — | — | — | — | ||||||
Foreign Exchange and Other Derivative Contracts | ( | — | — | — | — | |||||
Total Gains (Losses) on Derivatives Not Designated as Hedge Accounting Instruments from Insurance Activities | $ | $— | $— | $— | $— | |||||
Total | $ | $( | $( | $— | $ | |||||
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Year Ended December 31, 2024 | ||||||||||
Net Investment- Related Gains (Losses) | Net Investment Income | Net Policy Benefits and Claims | Interest Expense | Change in AOCI | ||||||
Derivatives Designated as Hedge Accounting Instruments: | ||||||||||
Fair Value Hedges | ||||||||||
Gains (Losses) on Derivatives Designated as Hedge Instruments: | ||||||||||
Interest Rate Contracts | $— | $— | $( | $( | $— | |||||
Foreign Currency Contracts | — | — | ( | |||||||
Total Gains (Losses) on Derivatives Designated as Hedge Instruments | $ | $ | $( | $( | $( | |||||
Gains (Losses) on Hedged Items: | ||||||||||
Interest Rate Contracts | $— | $— | $ | $ | $— | |||||
Foreign Currency Contracts | ( | — | — | — | — | |||||
Total Gains (Losses) on Hedged Items | $( | $— | $ | $ | $— | |||||
Amortization for Gains (Losses) Excluded from Assessment of Effectiveness: | ||||||||||
Foreign Currency Contracts | $ | $— | $— | $— | $— | |||||
Total Amortization for Gains (Losses) Excluded from Assessment of Effectiveness | $ | $— | $— | $— | $— | |||||
Total Gains (Losses) on Fair Value Hedges, Net of Hedged Items | $ | $ | $— | $— | $( | |||||
Cash Flow Hedges | ||||||||||
Interest Rate Contracts | $ | $( | $— | $— | $( | |||||
Total Gains (Losses) on Cash Flow Hedges | $ | $( | $— | $— | $( | |||||
Net Investment Hedges | ||||||||||
Gains (Losses) on Derivatives Designated as Hedge Instruments | $ | $ | $— | $— | $( | |||||
Total Gains (Losses) on Net Investment Hedges | $ | $ | $— | $— | $( | |||||
Derivatives Not Designated as Hedge Accounting Instruments: | ||||||||||
Insurance | ||||||||||
Embedded Derivatives - Funds Withheld Receivable | $ | $— | $— | $— | $— | |||||
Embedded Derivatives - Funds Withheld Payable | — | — | — | — | ||||||
Equity Index Options | — | — | — | — | ||||||
Equity Futures Contracts | ( | — | — | — | — | |||||
Interest Rate Contracts | ( | — | — | — | — | |||||
Foreign Exchange and Other Derivative Contracts | — | — | — | — | ||||||
Total Gains (Losses) on Derivatives Not Designated as Hedge Accounting Instruments from Insurance Activities | $ | $— | $— | $— | $— | |||||
Total | $ | $( | $ | $— | $( | |||||
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Year Ended December 31, 2023 | ||||||||||
Net Investment- Related Gains (Losses) | Net Investment Income | Net Policy Benefits and Claims | Interest Expense | Change in AOCI | ||||||
Derivatives Designated as Hedge Accounting Instruments: | ||||||||||
Fair Value Hedges | ||||||||||
Gains (Losses) on Derivatives Designated as Hedge Instruments: | ||||||||||
Interest Rate Contracts | $— | $— | $( | $( | $— | |||||
Foreign Currency Contracts | ( | — | — | |||||||
Total Gains (Losses) on Derivatives Designated as Hedge Instruments | $( | $ | $( | $( | $ | |||||
Gains (Losses) on Hedged Items: | ||||||||||
Interest Rate Contracts | $— | $— | $ | $ | $— | |||||
Foreign Currency Contracts | — | — | — | — | ||||||
Total Gains (Losses) on Hedged Items | $ | $— | $ | $ | $— | |||||
Amortization for Gains (Losses) Excluded from Assessment of Effectiveness: | ||||||||||
Foreign Currency Contracts | $ | $— | $— | $— | $— | |||||
Total Amortization for Gains (Losses) Excluded from Assessment of Effectiveness | $ | $— | $— | $— | $— | |||||
Total Gains (Losses) on Fair Value Hedges, Net of Hedged Items | $ | $ | $— | $— | $ | |||||
Cash Flow Hedges | ||||||||||
Interest Rate Contracts | $ | $( | $— | $— | $ | |||||
Total Gains (Losses) on Cash Flow Hedges | $ | $( | $— | $— | $ | |||||
Derivatives Not Designated as Hedge Accounting Instruments: | ||||||||||
Insurance | ||||||||||
Embedded Derivatives - Funds Withheld Receivable | $ | $— | $— | $— | $— | |||||
Embedded Derivatives - Funds Withheld Payable | ( | — | — | — | — | |||||
Equity Index Options | — | — | — | — | ||||||
Equity Future Contracts | ( | — | — | — | — | |||||
Interest Rate and Foreign Exchange Contracts | ( | — | — | — | — | |||||
Other | ( | — | — | — | — | |||||
Total Gains (Losses) on Derivatives Not Designated as Hedge Accounting Instruments from Insurance Activities | $( | $— | $— | $— | $— | |||||
Total | $( | $( | $ | $— | $ | |||||
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Collateral
were as follows:
As of December 31, 2025 | Gross Amount Recognized | Gross Amounts Offset in the Statements of Financial Condition(1) | Net Amounts Presented in the Statements of Financial Condition | Collateral (Received) / Pledged | Net Amount After Collateral | ||||
Derivative Assets (Excluding Embedded Derivatives) | $ | $( | $ | $( | $( | ||||
Derivative Liabilities (Excluding Embedded Derivatives) | $ | $( | $ | $ | $( |
(1)Represents netting of derivative exposures covered by qualifying master netting agreements.
As of December 31, 2024 | Gross Amount Recognized | Gross Amounts Offset in the Statements of Financial Condition(1) | Net Amounts Presented in the Statements of Financial Condition | Collateral (Received) / Pledged | Net Amount After Collateral | ||||
Derivative Assets (Excluding Embedded Derivatives) | $ | $( | $ | $( | $( | ||||
Derivative Liabilities (Excluding Embedded Derivatives) | $ | $( | $ | $ | $( |
(1)Represents netting of derivative exposures covered by qualifying master netting agreements.
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9. FAIR VALUE MEASUREMENTS
hierarchy. Investments classified as Equity Method – Other, for which the fair value option has not been elected, and Equity
Method – Capital Allocation-Based Income have been excluded from the tables below.
Assets, at fair value:
December 31, 2025 | |||||||
Level I | Level II | Level III | Total | ||||
Asset Management and Strategic Holdings | |||||||
Private Equity | $ | $ | $ | $ | |||
Credit | |||||||
Investments of Consolidated CFEs | |||||||
Real Assets | |||||||
Other Investments | |||||||
Total Investments (2) (3) | $ | $ | $ | $ | |||
Foreign Exchange Contracts and Options | |||||||
Other Derivatives | |||||||
Total Assets at Fair Value – Asset Management and Strategic Holdings | $ | $ | $ | $ | |||
Insurance | |||||||
AFS Fixed Maturity Securities: | |||||||
U.S. Government and Agencies | $ | $ | $ | $ | |||
U.S. State, Municipal and Political Subdivisions | |||||||
Corporate | |||||||
Structured Securities | |||||||
Total AFS Fixed Maturity Securities | $ | $ | $ | $ | |||
Trading Fixed Maturity Securities | |||||||
Mortgage and Other Loan Receivables | |||||||
Real Assets | (1) | ||||||
Other Investments | (1) | ||||||
Funds Withheld Receivable at Interest | |||||||
Reinsurance Recoverable | |||||||
Derivative Assets | |||||||
Separate Account Assets | |||||||
Total Assets at Fair Value – Insurance | $ | $ | $ | $ | |||
Total Assets at Fair Value | $ | $ | $ | $ | |||
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December 31, 2024 | |||||||
Level I | Level II | Level III | Total | ||||
Asset Management and Strategic Holdings | |||||||
Private Equity | $ | $ | $ | $ | |||
Credit | |||||||
Investments of Consolidated CFEs | |||||||
Real Assets | |||||||
Other Investments | |||||||
Total Investments (3) | $ | $ | $ | $ | |||
Foreign Exchange Contracts and Options | |||||||
Other Derivatives | |||||||
Total Assets at Fair Value – Asset Management and Strategic Holdings | $ | $ | $ | $ | |||
Insurance | |||||||
AFS Fixed Maturity Securities: | |||||||
U.S. Government and Agencies | $ | $ | $ | $ | |||
U.S. State, Municipal and Political Subdivisions | |||||||
Corporate | |||||||
Structured Securities | |||||||
Total AFS Fixed Maturity Securities | $ | $ | $ | $ | |||
Trading Fixed Maturity Securities | |||||||
Mortgage and Other Loan Receivables | |||||||
Real Assets | (1) | ||||||
Other Investments | (1) | ||||||
Funds Withheld Receivable at Interest | |||||||
Reinsurance Recoverable | |||||||
Derivative Assets | |||||||
Separate Account Assets | |||||||
Total Assets at Fair Value – Insurance | $ | $ | $ | $ | |||
Total Assets at Fair Value | $ | $ | $ | $ | |||
(1)Real assets and other investments excluded from the fair value hierarchy table include certain funds for which fair value is measured at net asset value
per share as a practical expedient. As of December 31, 2025 and December 31, 2024, the fair value of these real assets were $25.3 million and $34.5
million, respectively, and other investments were $334.7 million and $4.3 million, respectively. These fund investments have strategies primarily focused
on real assets (primarily real estate) or other investments and are subject to certain restrictions on redemption. As of both December 31, 2025 and
December 31, 2024, there were $1.3
2024, $5.0 million and $1.5 million associated with these other investments, respectively.
(2)Certain investments that are measured at fair value using NAV as a practical expedient under ASC 820 have not been categorized in the fair value
hierarchy. As of December 31, 2025, the fair value of these assets is $355.1 million. The fair value amounts presented in this table are intended to permit
reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Statements of Financial Condition.
(3)As of December 31, 2025 and December 31, 2024, the fair value of Equity Method investments is $2.3 billion and $1.8 billion, respectively.
(4)Represents netting of derivative exposures covered by qualifying master netting agreements.
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Liabilities, at fair value:
December 31, 2025 | |||||||
Level I | Level II | Level III | Total | ||||
Asset Management and Strategic Holdings | |||||||
Securities Sold Short | $ | $ | $ | $ | |||
Foreign Exchange Contracts and Options | |||||||
Unfunded Revolver Commitments | (1) | ||||||
Debt Obligations of Consolidated CFEs | |||||||
Total Liabilities at Fair Value – Asset Management and Strategic Holdings | $ | $ | $ | $ | |||
Insurance | |||||||
Policy Liabilities (Including Market Risk Benefits) | $ | $ | $ | (3) | $ | ||
Closed Block Policy Liabilities | |||||||
Funds Withheld Payable at Interest | ( | ( | |||||
Derivative Instruments Payable | |||||||
Embedded Derivative – Interest-Sensitive Life Products | |||||||
Embedded Derivative – Annuity Products | |||||||
Total Liabilities at Fair Value – Insurance | $ | $ | $ | $ | |||
Total Liabilities at Fair Value | $ | $ | $ | $ | |||
December 31, 2024 | |||||||
Level I | Level II | Level III | Total | ||||
Asset Management and Strategic Holdings | |||||||
Securities Sold Short | $ | $ | $ | $ | |||
Foreign Exchange Contracts and Options | |||||||
Unfunded Revolver Commitments | (1) | ||||||
Debt Obligations of Consolidated CFEs | |||||||
Total Liabilities at Fair Value – Asset Management and Strategic Holdings | $ | $ | $ | $ | |||
Insurance | |||||||
Policy Liabilities (Including Market Risk Benefits) | $ | $ | $ | (3) | $ | ||
Closed Block Policy Liabilities | |||||||
Funds Withheld Payable at Interest | ( | ( | |||||
Derivative Instruments Payable | |||||||
Embedded Derivative – Interest-Sensitive Life Products | |||||||
Embedded Derivative – Annuity Products | |||||||
Total Liabilities at Fair Value – Insurance | $ | $ | $ | $ | |||
Total Liabilities at Fair Value | $ | $ | $ | $ | |||
(1)These unfunded revolver commitments are valued using the same valuation methodologies as KKR's Level III credit investments.
(2)Represents netting of derivative exposures covered by qualifying master netting agreements.
(3)Includes market risk benefit of $1.3 billion and $1.0 billion as of December 31, 2025 and December 31, 2024, respectively.
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inputs have been used to determine fair value for the years ended December 31, 2025 and 2024, respectively.
For the Year Ended December 31, 2025 | ||||||||||
Balance, Beg. of Period | Transfers In / (Out) - Changes in Consolidation | Transfers In | Transfers Out | Net Purchases/ Issuances/ Sales/ Settlements | Net Unrealized and Realized Gains (Losses) | Change in OCI | Balance, End of Period | Changes in Net Unrealized Gains (Losses) Included in Earnings related to Level III Assets and Liabilities still held as of the Reporting Date | Changes in Net Unrealized Gains (Losses) Included in OCI related to Level III Assets and Liabilities still held as of the Reporting Date | |
Assets (1) | ||||||||||
Asset Management and Strategic Holdings | ||||||||||
Private Equity | $ | $ | $ | $( | $ | $ | $ | $ | $ | $ |
Credit | ( | ( | ||||||||
Real Assets | ||||||||||
Other Investments | ( | |||||||||
Total Assets – Asset Management and Strategic Holdings | $ | $ | $ | $( | $ | $ | $ | $ | $ | $ |
Insurance | ||||||||||
AFS Fixed Maturity Securities: | ||||||||||
Corporate Fixed Maturity Securities | $ | $ | $ | $( | $ | $ | $ | $ | $ | $ |
Structured Securities | ( | |||||||||
Total AFS Fixed Maturity Securities | $ | $ | $ | $( | $ | $ | $ | $ | $ | $ |
Trading Fixed Maturity Securities | ( | ( | ( | |||||||
Mortgage and Other Loan Receivables | ||||||||||
Real Assets | ||||||||||
Other Investments | ( | ( | ||||||||
Funds Withheld Receivable at Interest | ( | |||||||||
Reinsurance Recoverable | ( | ( | ||||||||
Total Assets – Insurance | $ | $ | $ | $( | $ | $ | $ | $ | $ | $ |
Total | $ | $ | $ | $( | $ | $ | $ | $ | $ | $ |
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For the Year Ended December 31, 2024 | ||||||||||
Balance, Beg. of Period | Transfers In / (Out) - Changes in Consolidation | Transfers In | Transfers Out | Net Purchases/ Issuances/ Sales/ Settlements | Net Unrealized and Realized Gains (Losses) | Change in OCI | Balance, End of Period | Changes in Net Unrealized Gains (Losses) Included in Earnings related to Level III Assets and Liabilities still held as of the Reporting Date | Changes in Net Unrealized Gains (Losses) Included in OCI related to Level III Assets and Liabilities still held as of the Reporting Date | |
Assets (1) | ||||||||||
Asset Management and Strategic Holdings | ||||||||||
Private Equity | $ | $( | $ | $( | $ | $ | $ | $ | $ | $ |
Credit | ( | ( | ( | ( | ||||||
Real Assets | ( | |||||||||
Other Investments | ( | ( | ( | |||||||
Total Assets – Asset Management and Strategic Holdings | $ | $ | $ | $( | $ | $ | $ | $ | $ | $ |
Insurance | ||||||||||
AFS Fixed Maturity Securities: | ||||||||||
Corporate Fixed Maturity Securities | $ | $ | $ | $( | $ | $( | $ | $ | $ | $ |
Structured Securities | ( | |||||||||
Total AFS Fixed Maturity Securities | $ | $ | $ | $( | $ | $( | $ | $ | $ | $ |
Trading Fixed Maturity Securities | ( | |||||||||
Mortgage and Other Loan Receivables | ||||||||||
Real Assets | ( | ( | ||||||||
Other Investments | ( | ( | ||||||||
Funds Withheld Receivable at Interest | ||||||||||
Reinsurance Recoverable | ( | |||||||||
Total Assets – Insurance | $ | $ | $ | $( | $ | $( | $ | $ | $( | $ |
Total | $ | $ | $ | $( | $ | $ | $ | $ | $ | $ |
(1)As of December 31, 2025 and December 31, 2024, the fair value of Equity Method investments is $2.1 billion and $1.4 billion, respectively.
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For the Year Ended December 31, 2025 | |||||
Purchases | Issuances | Sales | Settlements | Net Purchases/ Issuances/Sales/ Settlements | |
Assets (1) | |||||
Asset Management and Strategic Holdings | |||||
Private Equity | $ | $ | $( | $ | $ |
Credit | ( | ( | ( | ||
Real Assets | ( | ||||
Other Investments | ( | ( | |||
Total Assets – Asset Management and Strategic Holdings | $ | $ | $( | $( | $ |
Insurance | |||||
AFS Fixed Maturity Securities: | |||||
Corporate Fixed Maturity Securities | $ | $ | $( | $( | $ |
Structured Securities | ( | ( | |||
Total AFS Fixed Maturity Securities | $ | $ | $( | $( | $ |
Trading Fixed Maturity Securities | ( | ( | |||
Mortgage and Other Loan Receivables | ( | ( | |||
Real Assets | ( | ||||
Other Investments | ( | ( | |||
Reinsurance Recoverable | ( | ( | |||
Total Assets – Insurance | $ | $ | $( | $( | $ |
Total | $ | $ | $( | $( | $ |
For the Year Ended December 31, 2024 | |||||
Purchases | Issuances | Sales | Settlements | Net Purchases/ Issuances/Sales/ Settlements | |
Assets (1) | |||||
Asset Management and Strategic Holdings | |||||
Private Equity | $ | $ | $( | $ | $ |
Credit | ( | ( | ( | ||
Real Assets | ( | ||||
Other Investments | ( | ( | |||
Total Assets – Asset Management and Strategic Holdings | $ | $ | $( | $( | $ |
Insurance | |||||
AFS Fixed Maturity Securities: | |||||
Corporate Fixed Maturity Securities | $ | $ | $( | $( | $ |
Structured Securities | ( | ( | |||
Total AFS Fixed Maturity Securities | $ | $ | $( | $( | $ |
Trading Fixed Maturity Securities | ( | ( | |||
Mortgage and Other Loan Receivables | ( | ( | |||
Real Assets | ( | ||||
Other Investments | ( | ||||
Reinsurance Recoverable | ( | ( | |||
Total Assets – Insurance | $ | $ | $( | $( | $ |
Total | $ | $ | $( | $( | $ |
(1)As of December 31, 2025 and December 31, 2024, the Net Purchase/Issuance/Sales/Settlements of Equity Method investments is $688.1 million and
($51.4 ) million, respectively.
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For the Year Ended December 31, 2025 | |||||||||
Balance, Beg. of Period | Transfers In / (Out) - Changes in Consolidation | Transfers In | Transfers Out | Net Purchases/ Sales/ Settlements/ Issuances | Net Unrealized and Realized Gains (Losses) | Change in OCI | Balance, End of Period | Changes in Net Unrealized Gains (Losses) Included in Earnings related to Level III Assets and Liabilities still held as of the Reporting Date | |
Liabilities | |||||||||
Asset Management and Strategic Holdings | |||||||||
Unfunded Revolver Commitments | $ | $ | $ | $ | $ | $( | $ | $ | $( |
Total Liabilities – Asset Management and Strategic Holdings | $ | $ | $ | $ | $ | $( | $ | $ | $( |
Insurance | |||||||||
Policy Liabilities | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Closed Block Policy Liabilities | ( | ( | |||||||
Funds Withheld Payable at Interest | ( | ( | |||||||
Embedded Derivative – Interest- Sensitive Life Products | ( | ||||||||
Embedded Derivative – Annuity Products | |||||||||
Total Liabilities – Insurance | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total | $ | $ | $ | $ | $ | $ | $ | $ | $( |
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For the Year Ended December 31, 2024 | |||||||||
Balance, Beg. of Period | Transfers In / (Out) - Changes in Consolidation | Transfers In | Transfers Out | Net Purchases/ Sales/ Settlements/ Issuances | Net Unrealized and Realized Gains (Losses) | Change in OCI | Balance, End of Period | Changes in Net Unrealized Gains (Losses) Included in Earnings related to Level III Assets and Liabilities still held as of the Reporting Date | |
Liabilities | |||||||||
Asset Management and Strategic Holdings | |||||||||
Unfunded Revolver Commitments | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total Liabilities – Asset Management and Strategic Holdings | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Insurance | |||||||||
Policy Liabilities | $ | $ | $ | $ | $ | $( | $ | $ | $ |
Closed Block Policy Liabilities | ( | ||||||||
Funds Withheld Payable at Interest | ( | ( | ( | ||||||
Embedded Derivative – Interest- Sensitive Life Products | ( | ||||||||
Embedded Derivative – Annuity Products | |||||||||
Total Liabilities – Insurance | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
Year Ended December 31, 2025 | |||
Issuances | Settlements | Net Issuances/Settlements | |
Liabilities | |||
Asset Management and Strategic Holdings | |||
Unfunded Revolver Commitments | $ | $ | $ |
Total Liabilities – Asset Management and Strategic Holdings | $ | $ | $ |
Insurance | |||
Policy Liabilities | $ | $( | $ |
Closed Block Policy Liabilities | |||
Embedded Derivative – Interest-Sensitive Life Products | ( | ( | |
Embedded Derivative – Annuity Products | ( | ||
Total Liabilities – Insurance | $ | $( | $ |
Total | $ | $( | $ |
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Year Ended December 31, 2024 | |||
Issuances | Settlements | Net Issuances/Settlements | |
Liabilities | |||
Asset Management and Strategic Holdings | |||
Unfunded Revolver Commitments | $ | $ | $ |
Total Liabilities – Asset Management and Strategic Holdings | $ | $ | $ |
Insurance | |||
Policy Liabilities | $ | $( | $ |
Closed Block Policy Liabilities | |||
Embedded Derivative – Interest-Sensitive Life Products | ( | ( | |
Embedded Derivative – Annuity Products | ( | ||
Total Liabilities – Insurance | $ | $( | $ |
Total | $ | $( | $ |
Total realized and unrealized gains and losses recorded for Asset Management and Strategic Holdings – Level III assets
and liabilities are reported in Net Gains (Losses) from Investment Activities in the accompanying consolidated statements of
operations while Insurance – Level III assets and liabilities are reported in Net Investment Gains and Policy Benefits and Claims
in the accompanying consolidated statements of operations.
used for the consolidated financial assets and liabilities that are measured and reported at fair value and categorized within
Level III as of December 31, 2025. Because input information includes only those items for which information is reasonably
available, balances shown below may not equal total amounts reported for such Level III assets and liabilities:
Level III Assets | Fair Value December 31, 2025 | Valuation Methodologies & Inputs | Unobservable Input(s) (1) | Weighted Average (2) | Range | Impact to Valuation from an Increase in Input (3) | ||||||
ASSET MANAGEMENT AND STRATEGIC HOLDINGS | ||||||||||||
Private Equity | $ | Inputs to market comparables, discounted cash flow and transaction price | Illiquidity Discount | Decrease | ||||||||
Weight Ascribed to Market Comparables | (4) | |||||||||||
Weight Ascribed to Discounted Cash Flow | (5) | |||||||||||
Weight Ascribed to Transaction Price/Other | (6) | |||||||||||
Market comparables | Enterprise Value/LTM EBITDA Multiple | Increase | ||||||||||
Enterprise Value/Forward EBITDA Multiple | Increase | |||||||||||
Discounted cash flow | Discount Rate | Decrease | ||||||||||
Enterprise Value/EBITDA Exit Multiple | Increase | |||||||||||
Credit | $ | Yield Analysis | Yield | Decrease | ||||||||
Net Leverage | Decrease | |||||||||||
EBITDA Multiple | Increase | |||||||||||
Real Assets | $ | |||||||||||
Inputs to market comparables, discounted cash flow and transaction price | Illiquidity Discount | Decrease | ||||||||||
Weight Ascribed to Direct Income Capitalization | (7) | |||||||||||
Weight Ascribed to Discounted Cash Flow | (5) | |||||||||||
Weight Ascribed to Market Comparables/Other | (4) (6) | |||||||||||
Market comparables | Enterprise Value/LTM EBITDA Multiple | Increase | ||||||||||
Enterprise Value/Forward EBITDA Multiple | Increase | |||||||||||
Direct income capitalization | Current Capitalization Rate | Decrease | ||||||||||
Discounted cash flow | Exit Capitalization Rate | Decrease | ||||||||||
Unlevered Discount Rate | Decrease | |||||||||||
Discount Rate | Decrease | |||||||||||
Enterprise Value/EBITDA Exit Multiple | Increase | |||||||||||
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Other Investments | $ | (8) | Inputs to market comparables, discounted cash flow and transaction price | Illiquidity Discount | Decrease | |||||||
Weight Ascribed to Market Comparables | (4) | |||||||||||
Weight Ascribed to Discounted Cash Flow | (5) | |||||||||||
Weight Ascribed to Transaction Price | (6) | |||||||||||
Market comparables | Enterprise Value/LTM EBITDA Multiple | Increase | ||||||||||
Enterprise Value/Forward EBITDA Multiple | Increase | |||||||||||
Discounted cash flow | Discount Rate | Decrease | ||||||||||
Enterprise Value/EBITDA Exit Multiple | Increase | |||||||||||
INSURANCE(9) | ||||||||||||
Corporate Fixed Maturity Securities | $ | Discounted cash flow | Discount Spread | Decrease | ||||||||
Structured Securities | $ | Discounted cash flow | Discount Spread | Decrease | ||||||||
Mortgage and Other Loan Receivables | $ | Discounted cash flow | Discount Spread | Decrease | ||||||||
Real Assets | $ | Discounted cash flow | Discount Rate | Decrease | ||||||||
Terminal Capitalization Rate | Decrease | |||||||||||
Reinsurance Recoverable | $ | Present value of expenses paid from the open block plus the cost of capital held in support of the liabilities. | Expense Assumption | $ | The average expense assumption is between $ $ increased by inflation. The annual inflation rate was increased by | Increase | ||||||
Unobservable inputs are a market participant’s view of the expenses, a risk margin on the uncertainty of the level of expenses and a cost of capital on the capital held in support of the liabilities. | Expense Risk Margin | Decrease | ||||||||||
Cost of Capital | Increase | |||||||||||
Discounted cash flow | Mortality Rate | Increase | ||||||||||
Surrender Rate | Increase |
(1)In determining certain of these inputs, management evaluates a variety of factors including economic conditions, industry and market developments,
market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. KKR has
determined that market participants would take these inputs into account when valuing the investments and debt obligations. "LTM" means last twelve
months, and "EBITDA" means earnings before interest, taxes, depreciation, and amortization.
(2)Inputs were weighted based on the fair value of the investments included in the range.
(3)Unless otherwise noted, this column represents the directional change in the fair value of the Level III investments that would result from an increase to
the corresponding unobservable input. A decrease to the unobservable input would have the opposite effect. Significant increases and decreases in these
inputs in isolation could result in significantly higher or lower fair value measurements.
(4)The directional change from an increase in the weight ascribed to the market comparables approach would increase the fair value of the Level III
investments if the market comparables approach results in a higher valuation than the discounted cash flow approach and transaction price. The opposite
would be true if the market comparables approach results in a lower valuation than the discounted cash flow approach and transaction price.
(5)The directional change from an increase in the weight ascribed to the discounted cash flow approach would increase the fair value of the Level III
investments if the discounted cash flow approach results in a higher valuation than the market comparables approach, transaction price and direct
income capitalization approach. The opposite would be true if the discounted cash flow approach results in a lower valuation than the market
comparables approach, transaction price and direct income capitalization approach.
(6)The directional change from an increase in the weight ascribed to the transaction price or milestones would increase the fair value of the Level III
investments if the transaction price or milestones results in a higher valuation than the market comparables and discounted cash flow approach. The
opposite would be true if the transaction price or milestones results in a lower valuation than the market comparables approach and discounted cash flow
approach.
(7)The directional change from an increase in the weight ascribed to the direct income capitalization approach would increase the fair value of the Level III
investments if the direct income capitalization approach results in a higher valuation than the discounted cash flow approach. The opposite would be true
if the direct income capitalization approach results in a lower valuation than the discounted cash flow approach.
(8)Consists primarily of investments in common stock, preferred stock, warrants and options of companies that are not private equity, real assets, credit,
equity method - other, or investments of consolidated CFEs.
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(9)The funds withheld receivable at interest has been excluded from the above table. As discussed in Note 12 – Reinsurance, the funds withheld receivable
at interest is created through funds withheld contracts. The assets supporting these receivables were held in trusts for the benefit of Global Atlantic.
Accordingly, the unobservable inputs utilized in the valuation of the embedded derivative are a component of the invested assets supporting the funds
withheld reinsurance agreements.
Level III Liabilities | Fair Value December 31, 2025 | Valuation Methodologies | Unobservable Input(s) (1) | Weighted Average (2) | Range | Impact to Valuation from an Increase in Input (3) | ||||||
ASSET MANAGEMENT AND STRATEGIC HOLDINGS | ||||||||||||
Unfunded Revolver Commitments | $ | Yield Analysis | Discount Rate | Decrease | ||||||||
INSURANCE(4) | ||||||||||||
Policy Liabilities | $ | Policy liabilities under fair value option: | ||||||||||
Present value of best estimate liability cash flows. Unobservable inputs include a market participant view of the risk margin included in the discount rate which reflects the variability of the cash flows. | Risk Margin Rate | Decrease | ||||||||||
Policyholder behavior is also a significant unobservable input, including lapse, surrender and mortality. | Surrender Rate | Decrease | ||||||||||
Mortality Rate | Increase | |||||||||||
Market risk benefit: | ||||||||||||
Fair value using a non-option and option valuation approach | Instrument-specific Credit Risk (10 and 30 Year) | Decrease | ||||||||||
Policyholder behavior is also a significant unobservable input, including lapse, surrender, and mortality. | Mortality Rate | Decrease | ||||||||||
Surrender Rate | Decrease | |||||||||||
Closed Block Policy Liabilities | $ | Present value of expenses paid from the open block plus the cost of capital held in support of the liabilities. | Expense Assumption | $ | The average expense assumption is between $ $ increased by inflation. The annual inflation rate was increased by | Increase | ||||||
Instrument-Specific Credit Risk | Decrease | |||||||||||
Unobservable inputs are a market participant’s view of the expenses, a risk margin on the uncertainty of the level of expenses and a cost of capital on the capital held in support of the liabilities. | Expense Risk Margin | Decrease | ||||||||||
Cost of Capital | Increase | |||||||||||
Discounted cash flow | Mortality Rate | Increase | ||||||||||
Surrender Rate | Increase | |||||||||||
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Level III Liabilities | Fair Value December 31, 2025 | Valuation Methodologies | Unobservable Input(s) (1) | Weighted Average (2) | Range | Impact to Valuation from an Increase in Input (3) | ||||||
Embedded Derivative – Interest-Sensitive Life Products | $ | Policy persistency is a significant unobservable input. | Lapse Rate | Decrease | ||||||||
Mortality Rate | Decrease | |||||||||||
Future costs for options used to hedge the contract obligations | Option Budget Assumption | Increase | ||||||||||
Instrument-Specific Credit Risk | Decrease | |||||||||||
Embedded Derivative – Annuity Products | $ | Policyholder behavior is a significant unobservable input, including utilization and lapse. | Utilization: | |||||||||
Fixed-Indexed Annuity | Increase | |||||||||||
Surrender Rate: | ||||||||||||
Retail FIA | Increase | |||||||||||
Institutional FIA | Decrease | |||||||||||
Mortality Rate: | ||||||||||||
Retail FIA | Decrease | |||||||||||
Institutional FIA | Decrease | |||||||||||
Future costs for options used to hedge the contract obligations | Option Budget Assumption: | |||||||||||
Retail FIA | Increase | |||||||||||
Institutional FIA | Increase | |||||||||||
Instrument-Specific Credit Risk | Decrease |
(1)In determining certain of these inputs, management evaluates a variety of factors including economic conditions, industry and market developments,
market valuations of comparable companies and company specific developments including exit strategies and realization opportunities. KKR has
determined that market participants would likely take these inputs into account when valuing the investments and debt obligations. "LTM" means last
twelve months, and "EBITDA" means earnings before interest, taxes, depreciation and amortization.
(2)Inputs were weighted based on the fair value of the investments included in the range.
(3)Unless otherwise noted, this column represents the directional change in the fair value of the Level III investments that would result from an increase to
the corresponding unobservable input. A decrease to the unobservable input would have the opposite effect. Significant increases and decreases in these
inputs in isolation could result in significantly higher or lower fair value measurements.
(4)The fair value of the embedded derivative component of the funds withheld payable at interest has been excluded from the above table. The investments
supporting the funds withheld payable at interest balance are held in a trust by Global Atlantic. Accordingly, the unobservable inputs utilized in the
valuation of the embedded derivative are a component of the investments supporting the reinsurance cession agreements.
In the table above, certain private equity investments may be valued at cost for a period of time after an acquisition as
the best indicator of fair value. In addition, certain valuations of private equity investments may be entirely or partially
derived by reference to observable valuation measures for a pending or consummated transaction.
The various unobservable inputs used to determine the Level III valuations may have similar or diverging impacts on
valuation. Significant increases and decreases in these inputs in isolation and interrelationships between those inputs could
result in significantly higher or lower fair value measurements as noted in the table above.
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Financial Instruments Not Carried At Fair Value
Asset management and strategic holdings financial instruments are primarily measured at fair value on a recurring basis,
except as disclosed in Note 16 "Debt Obligations."
carried at fair value as of December 31, 2025 and 2024:
Fair Value Hierarchy | |||||||||
As of December 31, 2025 | Carrying Value | Level I | Level II | Level III | Fair Value | ||||
($ in thousands) | |||||||||
Financial Assets: | |||||||||
Insurance | |||||||||
Mortgage and Other Loan Receivables | $ | $ | $ | $ | $ | ||||
Policy Loans | |||||||||
FHLB Common Stock and Other Investments | |||||||||
Funds Withheld Receivables at Interest | |||||||||
Cash and Cash Equivalents | |||||||||
Restricted Cash and Cash Equivalents | |||||||||
Total Financial Assets | $ | $ | $ | $ | $ | ||||
Financial Liabilities: | |||||||||
Insurance | |||||||||
Policy Liabilities – Policyholder Account Balances | $ | $ | $ | $ | $ | ||||
Funds Withheld Payables at Interest | |||||||||
Debt Obligations | |||||||||
Securities Sold Under Agreements to Repurchase | |||||||||
Total Financial Liabilities | $ | $ | $ | $ | $ | ||||
Fair Value Hierarchy | |||||||||
As of December 31, 2024 | Carrying Value | Level I | Level II | Level III | Fair Value | ||||
($ in thousands) | |||||||||
Financial Assets: | |||||||||
Insurance | |||||||||
Mortgage and Other Loan Receivables | $ | $ | $ | $ | $ | ||||
Policy Loans | |||||||||
FHLB Common Stock and Other Investments | |||||||||
Funds Withheld Receivables at Interest | |||||||||
Cash and Cash Equivalents | |||||||||
Restricted Cash and Cash Equivalents | |||||||||
Total Financial Assets | $ | $ | $ | $ | $ | ||||
Financial Liabilities: | |||||||||
Insurance | |||||||||
Policy Liabilities – Policyholder Account Balances | $ | $ | $ | $ | $ | ||||
Funds Withheld Payables at Interest | |||||||||
Debt Obligations | |||||||||
Securities Sold Under Agreements to Repurchase | |||||||||
Total Financial Liabilities | $ | $ | $ | $ | $ | ||||
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10. FAIR VALUE OPTION
December 31, 2025 | December 31, 2024 | ||
Assets (1) | |||
Asset Management and Strategic Holdings | |||
Credit | $ | $ | |
Investments of Consolidated CFEs | |||
Real Assets | |||
Private Equity | |||
Other Investments | |||
Total Asset Management and Strategic Holdings | $ | $ | |
Insurance | |||
Fixed Maturity Securities | $ | $ | |
Mortgage and Other Loan Receivables | |||
Real Assets | |||
Other Investments | |||
Reinsurance Recoverable | |||
Total Insurance | $ | $ | |
Total | $ | $ | |
Liabilities | |||
Asset Management and Strategic Holdings | |||
Debt Obligations of Consolidated CFEs | $ | $ | |
Total Asset Management and Strategic Holdings | $ | $ | |
Insurance | |||
Policy Liabilities | $ | $ | |
Total Insurance | $ | $ | |
Total | $ | $ |
(1)As of December 31, 2025 and December 31, 2024, the fair value of Equity Method investments was $1.3 billion and $1.8 billion, respectively.
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The following table presents the net realized and unrealized gains (losses) on financial instruments for which the fair
value option was elected:
For the Year Ended December 31, 2025 | |||||
Net Realized Gains (Losses) | Net Unrealized Gains (Losses) | Total | |||
Assets (1) | |||||
Asset Management and Strategic Holdings | |||||
Credit | $( | $( | $( | ||
Investments of Consolidated CFEs | ( | ( | ( | ||
Real Assets | |||||
Private Equity | ( | ||||
Other Investments | ( | ( | |||
Total Asset Management and Strategic Holdings | $( | $( | $( | ||
Insurance | |||||
Fixed Maturity Securities | $ | $( | $( | ||
Mortgage and Other Loan Receivables | |||||
Real Assets | |||||
Other Investments | ( | ( | ( | ||
Total Insurance | $ | $ | $ | ||
Total | $( | $( | $( | ||
Liabilities | |||||
Asset Management and Strategic Holdings | |||||
Debt Obligations of Consolidated CFEs | $( | $ | $ | ||
Total Asset Management and Strategic Holdings | $( | $ | $ | ||
Insurance | |||||
Policy Liabilities | $ | $ | $ | ||
Total Insurance | $ | $ | $ | ||
Total | $( | $ | $ | ||
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For the Year Ended December 31, 2024 | |||||
Net Realized Gains (Losses) | Net Unrealized Gains (Losses) | Total | |||
Assets (1) | |||||
Asset Management and Strategic Holdings | |||||
Credit | $( | $ | $( | ||
Investments of Consolidated CFEs | ( | ||||
Real Assets | ( | ( | ( | ||
Private Equity | ( | ( | |||
Other Investments | ( | ||||
Total Asset Management and Strategic Holdings | $( | $( | $( | ||
Insurance | |||||
Fixed Maturity Securities | $ | $ | $ | ||
Mortgage and Other Loan Receivables | |||||
Real Assets | ( | ( | |||
Other Investments | ( | ( | |||
Total Insurance | $ | $( | $ | ||
Total | $( | $( | $( | ||
Liabilities | |||||
Asset Management and Strategic Holdings | |||||
Debt Obligations of Consolidated CFEs | $( | $( | $( | ||
Total Asset Management and Strategic Holdings | $( | $( | $( | ||
Insurance | |||||
Policy Liabilities | $ | $ | $ | ||
Total Insurance | $ | $ | $ | ||
Total | $( | $ | $ | ||
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For the Year Ended December 31, 2023 | |||||
Net Realized Gains (Losses) | Net Unrealized Gains (Losses) | Total | |||
Assets (1) | |||||
Asset Management and Strategic Holdings | |||||
Credit | $( | $ | $( | ||
Investments of Consolidated CFEs | ( | ||||
Real Assets | ( | ( | |||
Private Equity | |||||
Other Investments | ( | ||||
Total Asset Management and Strategic Holdings | $ | $ | $ | ||
Insurance | |||||
Mortgage and other loan receivables | $ | $( | $( | ||
Real assets | ( | ( | |||
Other Investments | ( | ( | |||
Total Insurance | $ | $( | $( | ||
Total | $ | $ | $ | ||
Liabilities | |||||
Asset Management and Strategic Holdings | |||||
Debt Obligations of Consolidated CFEs | $( | $( | $( | ||
Total Asset Management and Strategic Holdings | $( | $( | $( | ||
Insurance | |||||
Policy liabilities | $ | $ | $ | ||
Total Insurance | $ | $ | $ | ||
Total | $( | $( | $( | ||
(1)As of December 31, 2025, December 31, 2024, and December 31, 2023, the net gains (losses) of Equity Method investments were $41.7 million, $(124.4 )
million, and $232.1 million.
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11. INSURANCE INTANGIBLE ASSETS AND LIABILITIES
the consolidated statements of financial condition as of December 31, 2025 and December 31, 2024:
December 31, | December 31, | ||
2025 | 2024 | ||
Deferred Acquisition Costs, or "DAC" | $ | $ | |
Value of Business Acquired | |||
Cost-of-Reinsurance Intangibles | |||
Deferred Sales Inducements, or “DSI” | |||
Total Insurance Intangible Assets | $ | $ |
Deferred Acquisition Costs
December 31, 2025, 2024, and 2023:
Year Ended December 31, 2025 | |||||||||
Fixed Rate Annuities | Fixed Indexed Annuities | Interest Sensitive Life | Other | Total | |||||
Balance, as of the Beginning of the Period | $ | $ | $ | $ | $ | ||||
Capitalizations | |||||||||
Amortization Expense | ( | ( | ( | ( | ( | ||||
Balance, as of the End of the Period | $ | $ | $ | $ | $ | ||||
Year Ended December 31, 2024 | |||||||||
Fixed Rate Annuities | Fixed Indexed Annuities | Interest Sensitive Life | Other | Total | |||||
Balance, as of the Beginning of the Period | $ | $ | $ | $ | $ | ||||
Capitalizations | |||||||||
Amortization Expense | ( | ( | ( | ( | ( | ||||
Balance, as of the End of the Period | $ | $ | $ | $ | $ | ||||
Year Ended December 31, 2023 | |||||||||
Fixed Rate Annuities | Fixed Indexed Annuities | Interest Sensitive Life | Other | Total | |||||
Balance, as of the Beginning of the Period | $ | $ | $ | $ | $ | ||||
Capitalizations | |||||||||
Amortization Expense | ( | ( | ( | ( | ( | ||||
Balance, as of the End of the Period | $ | $ | $ | $ | $ | ||||
Value of Business Acquired
years ended December 31, 2025, 2024, and 2023:
Year Ended December 31, 2025 | |||||||||||
Fixed Rate Annuities | Fixed Indexed Annuities | Interest Sensitive Life | Variable Annuities | Other | Total | ||||||
Balance, as of the Beginning of the Period | $ | $ | $ | $ | $ | $ | |||||
Amortization Expense | ( | ( | ( | ( | ( | ( | |||||
Balance, as of the End of the Period | $ | $ | $ | $ | $ | $ | |||||
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Year Ended December 31, 2024 | |||||||||||
Fixed Rate Annuities | Fixed Indexed Annuities | Interest Sensitive Life | Variable Annuities | Other | Total | ||||||
Balance, as of the Beginning of the Period | $ | $ | $ | $ | $ | $ | |||||
Amortization Expense | ( | ( | ( | ( | ( | ( | |||||
Balance, as of the End of the Period | $ | $ | $ | $ | $ | $ | |||||
Year Ended December 31, 2023 | |||||||||||
Fixed Rate Annuities | Fixed Indexed Annuities | Interest Sensitive Life | Variable Annuities | Other | Total | ||||||
Balance, as of the Beginning of the Period | $ | $ | $ | $ | $ | $ | |||||
Amortization Expense | ( | ( | ( | ( | ( | ||||||
Balance, as of the End of the Period | $ | $ | $ | $ | $ | $ | |||||
The following tables reflect the negative value of business acquired, or “negative VOBA” liability roll-forward by product
category for the years ended December 31, 2025, 2024, and 2023:
Year Ended December 31, 2025 | |||||||||||
Fixed Rate Annuities | Fixed Indexed Annuities | Interest Sensitive Life | Variable Annuities | Other | Total | ||||||
Balance, as of the Beginning of the Period | $ | $ | $ | $ | $ | $ | |||||
Amortization Expense | ( | ( | ( | ( | ( | ( | |||||
Balance, as of the End of the Period | $ | $ | $ | $ | $ | $ | |||||
Year Ended December 31, 2024 | |||||||||||
Fixed Rate Annuities | Fixed Indexed Annuities | Interest Sensitive Life | Variable Annuities | Other | Total | ||||||
Balance, as of the Beginning of the Period | $ | $ | $ | $ | $ | $ | |||||
Amortization Expense | ( | ( | ( | ( | ( | ( | |||||
Balance, as of the End of the Period | $ | $ | $ | $ | $ | $ | |||||
Year Ended December 31, 2023 | |||||||||||
Fixed Rate Annuities | Fixed Indexed Annuities | Interest Sensitive Life | Variable Annuities | Other | Total | ||||||
Balance, as of the Beginning of the Period | $ | $ | $ | $ | $ | $ | |||||
Amortization Expense | ( | ( | ( | ( | ( | ( | |||||
Balance, as of the End of the Period | $ | $ | $ | $ | $ | $ | |||||
Years | VOBA | Negative VOBA | Total, net | ||
2026 | $ | $( | $ | ||
2027 | ( | ||||
2028 | ( | ||||
2029 | ( | ||||
2030 | ( | ||||
Thereafter | ( | ||||
Total | $ | $( | $ |
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Unearned Revenue Reserves and Unearned Front-End Loads
category for the years ended December 31, 2025, 2024, and 2023:
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Preneed | |||||
Balance, as of the Beginning of the Period | $ | $ | $ | ||
Deferral | |||||
Amortized to Income during the Period | ( | ( | ( | ||
Balance, as of the End of the Period | $ | $ | $ | ||
Significant inputs, judgments, assumptions for insurance intangibles and related amortization amounts
Global Atlantic considers surrender rates, mortality rates, and other relevant policy decrements in determining the
expected life of the contract. As a part of Global Atlantic's actual experience update for the years ended December 31, 2025
and 2024, Global Atlantic concluded that there was no material change in relevant inputs, judgments, or assumptions
requiring an update of the amortization rate for insurance intangibles and related amortization amounts.
12. REINSURANCE
Global Atlantic maintains a number of reinsurance treaties with third parties whereby Global Atlantic assumes annuity
and life policies on a coinsurance, modified coinsurance or funds withheld basis. Global Atlantic also maintains other
reinsurance treaties including the cession of certain annuity, life and health policies.
December 31, 2025 | December 31, 2024 | ||
Policy Liabilities: | |||
Direct | $ | $ | |
Assumed | |||
Total Policy Liabilities | |||
Ceded(1) | ( | ( | |
Net Policy Liabilities | $ | $ |
(1)Reported within reinsurance recoverable within the consolidated statements of financial condition.
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A key credit quality indicator is a counterparty’s A.M. Best financial strength rating. A.M. Best ratings are an independent
opinion of a reinsurer’s ability to meet ongoing obligations to policyholders. Global Atlantic mitigates counterparty credit risk
by requiring collateral and credit enhancements in various forms including engaging in funds withheld at interest and
modified coinsurance transactions. The following shows the amortized cost basis of Global Atlantic’s reinsurance recoverable
and funds withheld receivable at interest by credit quality indicator and any associated credit enhancements Global Atlantic
has obtained to mitigate counterparty credit risk:
As of December 31, 2025 | As of December 31, 2024 | ||||||||||
A.M. Best Rating(1) | Reinsurance Recoverable and Funds Withheld Receivable at Interest | Credit Enhancements(2) | Net Reinsurance Credit Exposure(3) | Reinsurance Recoverable and Funds Withheld Receivable at Interest | Credit Enhancements(2) | Net Reinsurance Credit Exposure(3) | |||||
A++ | $ | $ | $ | $ | $ | $ | |||||
A+ | |||||||||||
A | |||||||||||
A- | |||||||||||
B++ | |||||||||||
B+ | |||||||||||
B | |||||||||||
B- | |||||||||||
C++/C+ | ( | ||||||||||
Not Rated or Private Rating(4) | |||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||
(1)Ratings are periodically updated (at least annually) as A.M. Best issues new ratings.
(2)Credit enhancements primarily include funds withheld payable at interest.
(3)Includes credit loss allowance of $25.6 million and $16.4 million as of December 31, 2025 and 2024, respectively, held against reinsurance recoverable
and funds withheld receivable at interest.
(4)Includes $43.0 billion and $40.0 billion as of December 31, 2025 and 2024, respectively, associated with cessions to certain sponsored investment vehicles
that participate in qualifying institutional and individual market activities sourced by Global Atlantic.
As of December 31, 2025 and 2024, Global Atlantic had $2.3 billion and $2.5 billion of funds withheld receivable at
interest with six
supporting the funds withheld receivable at interest balance are held in trusts for the benefit of Global Atlantic.
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Net Premiums: | |||||
Direct | $ | $ | $ | ||
Assumed | |||||
Ceded | ( | ( | ( | ||
Net Premiums | $ | $ | $ | ||
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Policy Fees: | |||||
Direct | $ | $ | $ | ||
Assumed | |||||
Ceded | ( | ( | ( | ||
Net Policy Fees | $ | $ | $ | ||
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Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Net Policy Benefits and Claims: | |||||
Direct | $ | $ | $ | ||
Assumed | |||||
Ceded | ( | ( | ( | ||
Net Policy Benefits and Claims | $ | $ | $ | ||
Global Atlantic holds collateral for, and provides collateral to, its reinsurance clients. Global Atlantic held $49.0 billion and
$46.6 billion, respectively, of collateral in the form of funds withheld payable at interest on behalf of its reinsurers as of
December 31, 2025 and 2024. As of both December 31, 2025 and 2024, reinsurers held collateral of $1.1
Global Atlantic. A significant portion of the collateral that Global Atlantic provides to its reinsurance clients is provided in the
form of assets held in a trust for the benefit of the counterparty. As of December 31, 2025 and 2024, these trusts held in
excess of the $107.3 billion and $100.2 billion of assets they are required to hold in order to support reserves of $104.1 billion
and $96.9 billion, respectively. Of the cash held in trust, Global Atlantic classified $139.1 million and $185.8 million as
restricted as of December 31, 2025 and 2024, respectively.
13. NET INCOME (LOSS) ATTRIBUTABLE TO KKR & CO. INC. PER SHARE OF COMMON
STOCK
Inc. per share of common stock were calculated as follows:
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Net Income (Loss) Attributable to KKR & Co. Inc. Common Stockholders | $ | $ | $ | ||
(-) Accumulated Series D Mandatory Convertible Preferred Dividend (1) | |||||
Net Income (Loss) Available to KKR & Co. Inc. Common Stockholders – Basic | $ | $ | $ | ||
(+) Series C Mandatory Convertible Preferred Dividend (if dilutive) (2) | |||||
(+) Series D Mandatory Convertible Preferred Dividend (if dilutive) (3) | |||||
Net Income (Loss) Available to KKR & Co. Inc. Common Stockholders – Diluted | $ | $ | $ | ||
Basic Net Income (Loss) Per Share of Common Stock | |||||
Weighted Average Shares of Common Stock Outstanding – Basic | |||||
Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock – Basic | $ | $ | $ |
Diluted Net Income (Loss) Per Share of Common Stock | ||||||
Weighted Average Shares of Common Stock Outstanding – Basic | ||||||
Incremental Common Shares: | ||||||
Assumed vesting of dilutive equity awards (4) | ||||||
Assumed conversion of Series C Mandatory Convertible Preferred Stock (2) | ||||||
Assumed conversion of Series D Mandatory Convertible Preferred Stock (3) | ||||||
Weighted Average Shares of Common Stock Outstanding – Diluted | ||||||
Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock – Diluted | $ | $ | $ |
(1)For the year ended December 31, 2025, Net Income (Loss) Available to KKR & Co. Inc. Common Stockholders - Basic reflects the accumulated undeclared
dividends on Series D Mandatory Convertible Preferred Stock of 13.5 million.
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(2)For the year ended December 31, 2023, the impact of Series C Mandatory Convertible Preferred Stock calculated under the if-converted method was
dilutive, and as such (i) shares of common stock (assuming a conversion ratio based on the average volume weighted average price per share of common
stock over each reporting period) were included in the Weighted Average Shares of Common Stock Outstanding - Diluted and (ii) Series C Mandatory
Convertible Preferred dividends were added back to Net Income (Loss) Available to KKR & Co. Inc. Common Stockholders - Diluted.
(3)For the year ended December 31, 2025, the impact of Series D Mandatory Convertible Preferred Stock calculated under the if-converted method was not
dilutive.
(4)For the years ended December 31, 2025, 2024, and 2023, Weighted Average Shares of Common Stock Outstanding – Diluted includes unvested equity
awards, including certain equity awards that have met their market price-based vesting condition but have not satisfied their service-based vesting
condition. Vesting of these equity awards dilute equity holders of KKR Group Partnership, including KKR & Co. Inc. and holders of exchangeable securities
pro rata in accordance with their respective ownership interests in KKR Group Partnership.
Exchangeable Securities
Based Compensation") have been excluded from the calculation of Net Income (Loss) Attributable to KKR & Co. Inc. Per Share
of Common Stock - Diluted since the exchange of these units would not dilute KKR & Co. Inc.’s ownership interests in KKR
Group Partnership. See Note 1 "Organization" in our financial statements.
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Weighted Average Vested Restricted Holdings Units | |||||
Market Condition Awards
KKR also grants restricted stock units and restricted holdings units that are subject to both a service-based vesting
condition and a market price based vesting condition (referred to hereafter as "Market Condition Awards"). As of December
31, 2025, all unvested Market Condition awards have met their market price based vesting condition. These Market Condition
awards remain unvested until their service conditions are satisfied. For the years ended December 31, 2024, and 2023,
based vesting conditions were excluded from the calculation of Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of
Common Stock - Diluted since the market price based vesting condition was not satisfied. See Note 19 "Equity-Based
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14. OTHER ASSETS AND ACCRUED EXPENSES AND OTHER LIABILITIES
December 31, 2025 | December 31, 2024 | ||
Asset Management and Strategic Holdings | |||
Unsettled Investment Sales (1) | $ | $ | |
Receivables | |||
Due from Broker (2) | |||
Deferred Tax Assets, net | |||
Interest Receivable | |||
Fixed Assets, net (3) | |||
Foreign Exchange Contracts and Options (4) | |||
Goodwill (5)(6) | |||
Intangible Assets (6)(7) | |||
Derivative Assets | |||
Prepaid Taxes | |||
Prepaid Expenses | |||
Operating Lease Right of Use Assets (8) | |||
Deferred Financing Costs | |||
Other | |||
Total Asset Management and Strategic Holdings | $ | $ | |
Insurance | |||
Deferred Tax Assets, net | $ | $ | |
Accrued Investment Income | |||
Goodwill | |||
Unsettled Investment Sales(1) and Derivative Collateral Receivables | |||
Derivative Assets | |||
Premiums and Other Account Receivables | |||
Intangible Assets(9) | |||
Operating Lease Right of Use Assets (8) | |||
Market Risk Benefit Assets | |||
Prepaid Taxes | |||
Other | |||
Total Insurance | $ | $ | |
Total Other Assets | $ | $ |
(1)Primarily includes amounts due from third parties for investments sold for which cash settlement has not yet occurred.
(2)Represents amounts held at clearing brokers resulting from securities transactions.
(3)Net of accumulated depreciation and amortization of $383.1 million and $326.0 million as of December 31, 2025 and December 31, 2024, respectively.
Depreciation and amortization expense of $81.4 million, $71.6 million, and $68.4 million for the years ended December 31, 2025, 2024, and 2023
respectively, are included in General, Administrative and Other in the accompanying consolidated statements of operations. Additionally, KKR’s fixed
assets are predominantly located in the United States.
(4)Represents derivative financial instruments used to manage foreign exchange risk arising from certain foreign currency denominated investments. Such
instruments are measured at fair value with changes in fair value recorded in Net Gains (Losses) from Investment Activities in the accompanying
consolidated statements of operations. See Note 4 "Net Gains (Losses) from Investment Activities - Asset Management and Strategic Holdings" in our
financial statements for the net changes in fair value associated with these instruments.
(5)As of December 31, 2025, the carrying value of goodwill is recorded and assessed for impairment at the reporting unit. As of December 31, 2025, there
are approximately $(81.5 ) million of cumulative foreign currency translation adjustments included in AOCI related to the goodwill recorded as result of the
acquisition of KJRM.
(6)KKR acquired HealthCare Royalty Management, LLC on July 30, 2025, and recognized goodwill of $8.6 million allocated to the Asset Management
segment, intangibles assets of $141.6 million, and noncontrolling interests of $28.3 million.
(7)As of December 31, 2025, there are approximately $(277.8 ) million of cumulative foreign currency translation adjustments included in AOCI related to the
intangible assets recorded as result of the acquisition of KJRM.
(8)For Asset Management, non-cancelable operating leases consist of leases for office space in North America, Europe, Asia, and Australia. KKR is the lessee
under the terms of the operating leases. The operating lease cost was $103.2 million, $89.7 million, and $67.8 million for the years ended December 31,
2025, 2024, and 2023 respectively. For Insurance, non-cancelable operating leases consist of leases for office space and land in North America. For the
years ended December 31, 2025, 2024, and 2023 the operating lease cost was $19.0 million, $20.9 million, and $21.9 million, respectively.
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(9)The definite life intangible assets are amortized using the straight-line method over the useful life of the assets which is an average of 10.7 years. The
indefinite life intangible assets are not subject to amortization. The amortization expense of definite life intangible assets was $18.8 million, $19.1 million,
and $17.6 million for the years ended December 31, 2025, 2024, and 2023, respectively
December 31, 2025 | December 31, 2024 | ||
Asset Management and Strategic Holdings | |||
Amounts Payable to Carry Pool (1) | $ | $ | |
Unsettled Investment Purchases (2) | |||
Securities Sold Short (3) | |||
Accrued Compensation and Benefits | |||
Interest Payable | |||
Foreign Exchange Contracts and Options (4) | |||
Accounts Payable and Accrued Expenses | |||
Taxes Payable | |||
Uncertain Tax Positions | |||
Unfunded Revolver Commitments | |||
Operating Lease Liabilities (5) | |||
Deferred Tax Liabilities, net | |||
Other Liabilities | |||
Total Asset Management and Strategic Holdings | $ | $ | |
Insurance | |||
Unsettled Investment Purchases(2) and Derivative Collateral Liabilities | $ | $ | |
Securities Sold Under Agreements to Repurchase | |||
Accrued Expenses | |||
Derivative Liabilities | |||
Operating Lease Liabilities (5) | |||
Insurance Operations Balances in Course of Settlement | |||
Current Income Tax Payable | |||
Accrued Employee Related Expenses | |||
Accounts and Commissions Payable | |||
Tax Payable to Former Parent Company | |||
Interest Payable | |||
Other Tax Related Liabilities | |||
Total Insurance | $ | $ | |
Total Accrued Expenses and Other Liabilities | $ | $ |
(1)Represents the amount of carried interest payable to current and former KKR employees arising from KKR's investment funds and co-investment vehicles
that provide for carried interest.
(2)Primarily includes amounts owed to third parties for investment purchases for which cash settlement has not yet occurred.
(3)Represents the obligations of KKR to deliver a specified security at a future point in time. Such securities are measured at fair value with changes in fair
value recorded in Net Gains (Losses) from Investment Activities in the accompanying consolidated statements of operations. See Note 4 "Net Gains
(Losses) from Investment Activities - Asset Management and Strategic Holdings" in our financial statements for the net changes in fair value associated
with these instruments.
(4)Represents derivative financial instruments used to manage foreign exchange risk arising from certain foreign currency denominated investments. Such
instruments are measured at fair value with changes in fair value recorded in Net Gains (Losses) from Investment Activities in the accompanying
consolidated statements of operations. See Note 4 "Net Gains (Losses) from Investment Activities - Asset Management and Strategic Holdings" in our
financial statements for the net changes in fair value associated with these instruments.
(5)For Asset Management, operating leases for office space have remaining lease terms that range from approximately 1 year to 16 years, some of which
include options to extend the leases from 2 years to 10 years. The weighted average remaining lease terms were 12.7 years and 13.1 years as of
December 31, 2025 and December 31, 2024, respectively. The weighted average discount rates were 3.8 % and 3.7 % as of December 31, 2025 and
December 31, 2024, respectively. For Insurance, operating leases for office space have remaining lease terms that range from approximately 2 years to 9
years, some of which include options to extend the leases for up to 10 years. The weighted average remaining lease terms were 6.8 years and 7.4 years as
of December 31, 2025 and 2024, respectively. The weighted average discount rates were 4.9 % and 4.7 % as of December 31, 2025 and 2024, respectively.
The weighted average remaining lease terms for land were 42.0 years and 42.8 years as of December 31, 2025 and 2024, respectively. For Asset
Management and Strategic Holdings and Insurance, non-cash right of use assets obtained in exchange for new operating lease liabilities were $155.2
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15. VARIABLE INTEREST ENTITIES
Consolidated VIEs
KKR consolidates certain VIEs in which it is determined that KKR is the primary beneficiary. The consolidated VIEs are
predominately CLOs and certain investment funds sponsored by KKR. The primary purpose of these VIEs is to provide strategy
specific investment opportunities to earn investment gains, current income or both in exchange for management fees and
performance income. KKR's investment strategies differ for these VIEs; however, the fundamental risks have similar
characteristics, including loss of invested capital and loss of management fees and performance income. KKR does not provide
performance guarantees and has no other financial obligation to provide funding to these consolidated VIEs, beyond amounts
previously committed, if any. Furthermore, KKR consolidates certain VIEs that are formed by Global Atlantic to either (i) hold
investments, including fixed maturity securities, consumer and other loans, renewable energy, transportation and real estate,
or (ii) to conduct certain reinsurance activities with third party commitments.
Unconsolidated VIEs
KKR holds variable interests in certain VIEs which are not consolidated as it has been determined that KKR is not the
primary beneficiary. VIEs that are not consolidated predominantly include certain investment funds sponsored by KKR as well
as certain investment partnerships where Global Atlantic retains an economic interest. KKR's investment strategies differ by
investment fund; however, the fundamental risks have similar characteristics, including loss of invested capital and loss of
management fees and performance income. KKR's maximum exposure to loss as a result of its investments in the
unconsolidated investment funds is the carrying value of such investments, including KKR's capital interest and any unrealized
carried interest. Accordingly, disaggregation of KKR's involvement by type of unconsolidated investment fund would not
provide more useful information. For these unconsolidated investment funds in which KKR is the sponsor, KKR may have an
obligation as general partner to provide commitments to such investment funds. As of December 31, 2025, KKR's
commitments to these unconsolidated investment funds were $2.2 billion. KKR generally has not provided any financial
support other than its obligated amount as of December 31, 2025. Additionally, Global Atlantic has unfunded commitments of
$447.1 million as of December 31, 2025.
and noncontrolling interests, if any, for those VIEs in which KKR is determined not to be the primary beneficiary but in which it
has a variable interest is as follows:
December 31, 2025 | December 31, 2024 | ||
Asset Management and Strategic Holdings | |||
Investments | $ | $ | |
Due from (to) Affiliates, net | |||
Maximum Exposure to Loss | $ | $ | |
Insurance | |||
Real Assets | $ | $ | |
Other Investments | |||
Maximum Exposure to Loss | $ | $ | |
Total Maximum Exposure to Loss | $ | $ |
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16. DEBT OBLIGATIONS
KKR enters into credit agreements and issues debt for its general operating and investment purposes.
December 31, 2025 | December 31, 2024 | |||||||||
By remaining maturity at period end date | Financing Available | Principal | Carrying Value | Fair Value | Financing Available | Principal | Carrying Value | Fair Value | ||
Revolving Credit Facilities: (1) | ||||||||||
Under 1 Year | $ | $— | $— | $— | $ | $— | $— | $— | ||
1-5 Years | — | — | — | — | — | — | ||||
After 5 Years | — | — | — | — | — | — | ||||
Subtotal | — | — | — | — | — | — | ||||
KKR USD Senior Notes: (2)(3)(6)(8) | ||||||||||
Under 1 Year | — | — | ||||||||
1-5 Years | — | — | ||||||||
After 5 Years | — | — | ||||||||
Subtotal | — | — | ||||||||
KKR Yen Senior Notes: (2)(3)(6) | ||||||||||
Under 1 Year(9) | — | — | ||||||||
1-5 Years | — | — | ||||||||
After 5 Years | — | — | ||||||||
Subtotal | — | — | ||||||||
KKR Euro Senior Notes: (2)(3)(6) | ||||||||||
Under 1 Year | — | — | ||||||||
1-5 Years | — | — | ||||||||
After 5 Years | — | — | ||||||||
Subtotal | — | — | ||||||||
KKR Subordinated Notes: (2)(3)(7) | ||||||||||
Under 1 Year | — | — | ||||||||
1-5 Years | — | — | ||||||||
After 5 Years | — | — | ||||||||
Subtotal | — | — | ||||||||
KFN USD Senior Notes: (2)(3)(4) | ||||||||||
Under 1 Year | — | — | ||||||||
1-5 Years | — | — | ||||||||
After 5 Years | — | — | ||||||||
Subtotal | — | — | ||||||||
KFN Junior Subordinated Notes:(2)(4)(5) | ||||||||||
Under 1 Year | — | — | ||||||||
1-5 Years | — | — | ||||||||
After 5 Years | — | — | ||||||||
Subtotal | — | — | ||||||||
Total KKR & KFN Notes | ||||||||||
Other Debt Obligations: (1)(2)(8) | ||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||
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(1)Financing available is reduced by the dollar amounts specified in any issued letters of credit.
(2)Carrying value includes: (i) unamortized note discount (net of premium), as applicable and (ii) unamortized debt issuance costs, as applicable. Financing
costs related to the issuance of the notes have been deducted from the note liability and are being amortized over the life of the notes.
(3)Interest rates of the notes are fixed and the weighted average interest rates are the following:
December 31, 2025 | December 31, 2024 | |
KKR USD Senior Notes | ||
KKR Yen Senior Notes | ||
KKR Euro Senior Notes | ||
KKR Subordinated Notes | ||
KFN USD Senior Notes |
(4)These debt obligations are classified as Level III within the fair value hierarchy and valued using the same valuation methodologies as KKR's Level III credit
investments.
(5)As of December 31, 2025, the floating-rate notes were fully repaid. The interest rates on the notes were floating, with a weighted average interest rate of
(6)The notes are classified as Level II within the fair value hierarchy and fair value is determined by third party broker quotes.
(7)The notes are classified as Level I within the fair value hierarchy and fair value is determined by quoted prices in active markets since the debt is publicly
listed.
(8)As of December 31, 2025 and December 31, 2024, the principal value, carrying value and fair value reflects the elimination for the portion of applicable
debt obligations that are held by Global Atlantic.
(9)On March 21, 2025, the ¥5.0 billion 0.764 % Senior Notes due 2025 matured and the principal and accrued interest were paid in full.
Redemption of KFN 5.500 % Senior Notes Due 2032
On August 19, 2025, KKR Financial Holdings LLC, a wholly-owned KKR subsidiary ("KFN"), fully redeemed all of its
$500,000,000 aggregate principal amount outstanding 5.500 % Senior Notes due 2032 at a redemption price equal to 100 % of
the principal amount thereof plus accrued and unpaid interest thereon, which amounted to approximately $510.6 million.
KKR Issued 5.100 % Senior Notes Due 2035
On August 7, 2025, KKR & Co. Inc. completed the offering of $900,000,000 aggregate principal amount of its 5.100 %
Senior Notes due 2035 (the “2035 Notes”). The 2035 Notes are guaranteed by KKR Group Partnership L.P. The 2035 Notes
were issued pursuant to an indenture (the “2035 Notes Base Indenture”) dated May 28, 2025 between KKR & Co. Inc. and The
Bank of New York Mellon Trust Company, N.A., as trustee (the “2035 Notes Trustee”), as supplemented by a second
supplemental indenture, dated August 7, 2025 (the “2035 Notes Second Supplemental Indenture” and, together with the
2035 Notes Base Indenture, the “2035 Notes Indenture”), among KKR & Co. Inc., KKR Group Partnership L.P., and the 2035
Notes Trustee.
The 2035 Notes bear interest at a rate of 5.100 % per annum and will mature on August 7, 2035 unless earlier redeemed.
Interest on the 2035 Notes accrues from August 7, 2025 and is payable semi-annually in arrears on February 7 and August 7 of
each year, commencing on February 7, 2026 and ending on the maturity date. The 2035 Notes are unsecured and
unsubordinated obligations of KKR & Co. Inc. The 2035 Notes are fully and unconditionally guaranteed, on an unsubordinated
unsecured basis, by KKR Group Partnership L.P.
The 2035 Notes Indenture includes covenants, including limitations on KKR & Co. Inc.’s and KKR Group Partnership L.P.’s
ability to, subject to exceptions, incur indebtedness secured by liens on voting stock or profit participating equity interests of
their subsidiaries or merge, consolidate or sell, transfer or convey all or substantially all of their assets. The 2035 Notes
Indenture also provides for events of default and further provides that the 2035 Notes Trustee or the holders of not less than
upon the occurrence and during the continuance of any event of default after expiration of any applicable grace period. In the
case of specified events of bankruptcy, insolvency, receivership or reorganization, the principal amount of the 2035 Notes and
any accrued and unpaid interest on the 2035 Notes automatically become due and payable. Prior to May 7, 2035, the 2035
Notes may be redeemed at KKR & Co. Inc.’s option in whole or in part, at any time and from time to time, at the make-whole
redemption price set forth in the 2035 Notes. On or after May 7, 2035, the 2035 Notes may be redeemed at KKR & Co. Inc.’s
option in whole or in part, at any time and from time to time, at par plus any accrued and unpaid interest on the 2035 Notes
redeemed to, but not including, the date of redemption. If a change of control repurchase event (as defined in the 2035 Notes
Indenture) occurs, KKR & Co. Inc. must offer to repurchase the 2035 Notes at a repurchase price in cash equal to 101 % of the
aggregate principal amount of the 2035 Notes repurchased plus any accrued and unpaid interest on the 2035 Notes
repurchased to, but not including, the date of repurchase.
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KKR Issued 6.875 % Subordinated Notes Due 2065
On May 28, 2025, KKR & Co. Inc. completed the offering of $590,000,000 aggregate principal amount of its 6.875 %
Subordinated Notes due 2065 (the “2065 Notes”), including $40,000,000 principal amount of 2065 Notes issued pursuant to
the partial exercise by the underwriters of the 2065 Notes of their 30-day option to purchase up to an additional $82,500,000
principal amount of 2065 Notes to cover over-allotments. The 2065 Notes are guaranteed by KKR Group Partnership L.P. The
2065 Notes were issued pursuant to an indenture (the “2065 Base Indenture”) dated May 28, 2025, between KKR & Co. Inc.
and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2065 Notes Trustee”), as supplemented by a first
supplemental indenture, dated May 28, 2025, (the “2065 First Supplemental Indenture” and, together with the 2065 Base
Indenture, the “2065 Notes Indenture”), among KKR & Co. Inc., KKR Group Partnership L.P., and the 2065 Notes Trustee.
The 2065 Notes bear interest at a rate of 6.875 % per annum and will mature on June 1, 2065 unless earlier redeemed.
Interest on the 2065 Notes accrues from May 28, 2025, and is payable quarterly in arrears on March 1, June 1, September 1,
and December 1 of each year, commencing on September 1, 2025, and ending on the maturity date. The 2065 Notes are
unsecured and subordinated obligations of KKR & Co. Inc. The 2065 Notes are fully and unconditionally guaranteed, on a
subordinated unsecured basis, by KKR Group Partnership L.P.
The 2065 Notes Indenture includes covenants, including limitations on KKR & Co. Inc.’s and KKR Group Partnership L.P.’s
ability to, subject to exceptions, incur indebtedness secured by liens on voting stock or profit participating equity interests of
their subsidiaries or merge, consolidate or sell, transfer or convey all or substantially all of their assets. The 2065 Notes
Indenture also provides for events of default and further provides that the 2065 Notes Trustee or the holders of not less than
upon the occurrence and during the continuance of any event of default after expiration of any applicable grace period. In the
case of specified events of bankruptcy, insolvency, receivership or reorganization, the principal amount of the 2065 Notes and
any accrued and unpaid interest on the 2065 Notes automatically become due and payable. On or after June 1, 2030, the
2065 Notes may be redeemed at KKR & Co. Inc.’s option in whole or in part, at any time and from time to time, at par plus any
accrued and unpaid interest to, but excluding, the date of redemption; provided that if the 2065 Notes are not redeemed in
whole, at least $25 million aggregate principal amount of the 2065 Notes must remain outstanding after giving effect to such
redemption. If a “tax redemption event” (as set forth in the 2065 Notes Indenture) occurs, the 2065 Notes may be redeemed,
in whole, but not in part, within 120 days of the occurrence of such tax redemption event at a redemption price equal to their
principal amount plus accrued and unpaid interest to, but excluding, the date of redemption. In addition, the 2065 Notes may
be redeemed, in whole, but not in part, at any time prior to June 1, 2030, within 90 days of the occurrence of a rating agency
event (as set forth in the 2065 Notes Indenture), at a redemption price equal to 102 % of their principal amount plus any
accrued and unpaid interest to, but excluding, the date of redemption.
KCM 364-Day Revolving Credit Facility
On April 2, 2025, KKR Capital Markets Holdings L.P. and certain other capital markets subsidiaries (the "KCM Borrowers")
replaced their existing 364-day revolving credit agreement with a new 364-day revolving credit agreement (the "KCM 364-Day
Revolving Credit Facility”) with Mizuho Bank, Ltd., as administrative agent, and one or more lenders party thereto. The KCM
KCM Borrowers and the administrative agent, and one or more lenders party to the prior facility, which was terminated
according to its terms on April 2, 2025. The KCM 364-Day Revolving Credit Facility provides for revolving borrowings up to
$750 million, expires on April 1, 2026, and ranks pari passu with the existing $750 million 5-year revolving credit facility
provided by them for KKR's capital markets business (the "KCM Five-Year Revolving Credit Facility"). If a borrowing is made
under the KCM 364-Day Revolving Credit Agreement, the interest rate will vary depending on the type of drawdown
requested. As with the KCM Five-Year Revolving Credit Facility, borrowings under the KCM 364-Day Revolving Credit Facility
may only be used for KKR’s capital markets business. This facility’s only obligors are entities involved in KKR’s capital markets
business, and its liabilities are non-recourse to other parts of KKR’s business. The KCM 364-Day Revolving Credit Facility
contains customary representations and warranties, events of default, and affirmative and negative covenants, including a
financial covenant providing for a maximum debt to equity ratio for the KCM Borrowers, which are substantially similar to
those found in the KCM Five-Year Revolving Credit Facility. The KCM Borrowers' obligations under the KCM 364-Day Revolving
Credit Facility are secured by certain assets of the KCM Borrowers, including a pledge of equity interests of certain subsidiaries
of the KCM Borrowers.
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Other Asset Management and Strategic Holdings Debt Obligations
Certain of KKR's consolidated investment funds have entered into financing arrangements with financial institutions,
generally to provide liquidity to such investment funds. These financing arrangements are generally not direct obligations of
the general partners of KKR's investment funds (beyond KKR's capital interest) or its management companies. Such
borrowings have varying maturities and bear interest at floating rates. Borrowings are generally secured by the investment
purchased with the proceeds of the borrowing and/or the uncalled capital commitment of each respective fund. When an
investment vehicle borrows, the proceeds are available only for use by that investment vehicle and are not available for the
benefit of other investment vehicles or KKR. Collateral within each investment vehicle is also available only against borrowings
by that investment vehicle and not against the borrowings of other investment vehicles or KKR.
In certain other cases, investments and other assets held directly by majority-owned consolidated levered investment
vehicles and other entities have been funded with borrowings that are collateralized by the investments and assets they own.
These borrowings are non-recourse to KKR beyond the investments or assets serving as collateral or the capital that KKR has
committed to fund such investment vehicles. Such borrowings have varying maturities and generally bear interest at fixed
rates.
In addition, consolidated CFEs issue debt securities to third-party investors which are collateralized by assets held by the
CFE. Debt securities issued by CFEs are supported solely by the assets held at the CFEs and are not collateralized by assets of
any other KKR entity. CFEs also may have warehouse facilities with banks to provide liquidity to the CFE. The CFE's debt
obligations are non-recourse to KKR beyond the assets of the CFE.
Financing Available | Principal | Carrying Value(1) | Fair Value | Weighted Average Interest Rate | Weighted Average Remaining Maturity in Years | ||||||
Financing Facilities of Consolidated Funds and Other | $ | $ | $ | $ | |||||||
Debt Obligations of Consolidated CFEs | (2) | ||||||||||
$ | $ | $ | $ |
(1)Includes borrowings collateralized by fund investments, fund co-investments, and other assets held by levered investment vehicles of $3.3 billion.
(2)The senior notes of the consolidated CFEs had a weighted average interest rate of 5.1 %. The subordinated notes of the consolidated CLOs do not have
contractual interest rates but instead receive a pro rata amount of the net distributions from the excess cash flows of the respective CLO vehicle.
Accordingly, weighted average borrowing rates for the subordinated notes are based on cash distributions during the period, if any.
Debt obligations of consolidated CLOs are collateralized by assets held by each respective CLO vehicle and assets of one
CLO vehicle may not be used to satisfy the liabilities of another. As of December 31, 2025, the fair value of the consolidated
CLO assets was $34.3 billion. This collateral consisted of Cash and Cash Equivalents, Investments, and Other Assets.
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December 31, 2025 | December 31, 2024 | |||||||||
By Remaining Maturity at Period End Date | Financing Available | Principal | Carrying Value(1) | Fair Value(2) | Financing Available | Principal | Carrying Value(1) | Fair Value(2) | ||
Revolving Credit Facilities: | ||||||||||
Under 1 Year | $ | $ | $ | $ | $ | $ | $ | $ | ||
1-5 Years | ||||||||||
After 5 Years | ||||||||||
Subtotal | ||||||||||
Senior Notes: (4) | ||||||||||
Under 1 Year | — | — | ||||||||
1-5 Years | — | — | ||||||||
After 5 Years | — | — | ||||||||
Subtotal | — | — | ||||||||
Subordinated Notes: (4) | ||||||||||
Under 1 Year | — | — | ||||||||
1-5 Years | — | — | ||||||||
After 5 Years | — | — | ||||||||
Subtotal | — | — | ||||||||
Debt Obligations of Consolidated Special Purpose Vehicles(3) | ||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||
(1)Carrying value of debt as of December 31, 2025 and 2024, includes purchase accounting adjustments of $26.9 million and $34.1 million, respectively, net
debt issuance costs of $(54.2 ) million and $(57.9 ) million, respectively, and cumulative fair value loss on hedged debt obligations of $(123.5 ) million and
$(233.2 ) million, respectively. The amortization of the purchase accounting adjustments was $7.1 million, $6.1 million, and $3.1 million for the years
ended December 31, 2025, 2024, and 2023, respectively.
(2)These debt obligations are classified as Level III within the fair value hierarchy and valued using the same valuation methodologies as KKR's Level III credit
investments.
(3)These debt obligations primarily include debt obligations of consolidated co-investment vehicles that are not guaranteed by KKR or Global Atlantic.
(4)Interest rates of the notes are fixed and the weighted average interest rates are the following:
December 31, 2025 | December 31, 2024 | |
Senior Notes | ||
Subordinated Notes |
Tender offer of Global Atlantic 4.70 % Subordinated Debentures due 2051
On November 17, 2025, Global Atlantic (Fin) Company ("GA FinCo") commenced an at-par cash tender offer for its then
outstanding $750 million aggregate principal amount of 4.70 % subordinated debentures due 2051. Upon close of the tender
offer on November 21, 2025, Global Atlantic accepted $726 million aggregate principal amount of such debentured that had
been offered for purchase.
Issuance of Global Atlantic 7.25
On November 26, 2025, GA FinCo issued $600 million aggregate principal amount of 7.25 % fixed-to-fixed rate
subordinated debentures maturing on March 1, 2056. The subordinated debentures were issued pursuant to the
Subordinated Indenture, dated as of July 6, 2021, among GA FinCo, as issuer, Global Atlantic Limited (Delaware) (formerly
known as Global Atlantic Financial Limited, "GALD"), as guarantor, and U.S. Bank National Association, as trustee, as
supplemented by the Third Supplemental Indenture, dated as of November 26, 2025.
The subordinated debentures will bear interest (i) from, and including, November 26, 2025 to, but not including, the
initial interest reset date of March 1, 2031 at an annual rate of 7.25 % and (ii) from and including March 1, 2031, during each
interest reset period, at an annual rate equal to the five-year Treasury rate as of the most recent reset interest determination
date, plus 3.55 % provided, that the interest rate during any interest reset period will not reset below 7.25 % (which equals the
initial interest rate on the Debentures). Interest on the subordinated debentures is payable semi-annually in arrears on March
1 and September 1 of each year, commencing on March 1, 2026, and on the maturity date.
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GA FinCo has the right on one or more occasions to defer the payment of interest on the subordinated debentures due
2056 for up to five consecutive years. During an optional deferral period, interest will continue to accrue at the interest rate
on the subordinated debentures due 2056, compounded semi-annually as of each interest payment date, and certain
restrictions are placed on GA FinCo and GALD including with respect to making payments on any indebtedness or guarantees
ranking on parity with or junior to the subordinated indentures.
GA FinCo may elect to redeem the subordinated debentures due 2056 either in whole at any time or in part from time to
time during the three-month period prior to, and including, March 1, 2031, or after the initial interest reset date, on any
interest payment date, in each case at 100 % of the principal amount of the subordinated debentures being redeemed, plus
accrued and unpaid interest (including compounded interest, if any) to, but excluding, the redemption date. GA FinCo also has
certain redemption rights related to tax, rating agency and capital events.
Global Atlantic Insurance Operating Company Revolving Credit Facility
On January 16, 2026, subsequent to the end of the period, Global Atlantic Limited (Delaware) and GA FinCo (together, the
“GA Guarantors”) and certain direct and indirect insurance company subsidiaries of the Guarantors (such insurance company
subsidiaries, the “GA OpCo Borrowers”, and together with the Guarantors, the “GA OpCo Credit Parties”) entered into a credit
agreement (the “GA OpCo Credit Agreement”) with Wells Fargo Bank, N.A., as administrative agent (the “GA Administrative
Agent”) and other lenders from time to time party thereto.
The GA OpCo Credit Agreement provides the GA OpCo Borrowers with an unsecured revolving credit facility (the “GA
OpCo Credit Facility”) in an aggregate principal amount of $3.00 billion as of January 16, 2026, with the option to request an
increase in the facility amount of up to an additional $500 million, for an aggregate principal amount of $3.50 billion, subject
to certain conditions, including obtaining new or increased commitments from new or existing lenders. The GA OpCo Credit
Facility is a 364-day facility, scheduled to mature on January 15, 2027, which may from time to time be extended for
additional 364-day periods at the GA OpCo Borrowers’ option, subject to the consent of the applicable lenders, and the GA
OpCo Borrowers may prepay, terminate or reduce the commitments under the GA OpCo Credit Facility at any time without
penalty. Borrowings under the GA OpCo Credit Facility are available for general corporate purposes including working capital.
Interest on borrowings under the GA OpCo Credit Facility will be based on either (i) the term Secured Overnight Financing
Rate (SOFR), plus a margin based on a corporate ratings-based grid ranging from 1.10 % to 1.375 %, or (ii) an alternate base
rate, plus a margin based on a corporate ratings-based grid ranging from 0.10 % to 0.375 %.
Certain other terms of the GA OpCo Credit Agreement include: (i) financial covenants that require GALD and certain of its
consolidated subsidiaries not to exceed a specified debt-to-total-capitalization ratio and to satisfy a net worth threshold; (ii)
customary representations, affirmative covenants and certain negative covenants; and (iii) customary events of default, upon
the occurrence of which the lenders will have the ability to accelerate all outstanding loans under the GA OpCo Credit Facility
and terminate the commitments.
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Debt Covenants
Borrowings of KKR (including Global Atlantic) contain various debt covenants. These covenants do not, in management's
opinion, materially restrict KKR's operating business or investment strategies as of December 31, 2025. KKR (including Global
Atlantic) was in compliance with such debt covenants in all material respects as of December 31, 2025.
Scheduled principal payments for Asset Management and Strategic Holdings debt obligations as of December 31, 2025 are as follows: | |||||||
Revolving Credit Facilities | Notes Issued | Other Debt Obligations | Total | ||||
2026 | |||||||
2027 | |||||||
2028 | |||||||
2029 | |||||||
2030 | |||||||
Thereafter | |||||||
$ | $ | $ | $ | ||||
Scheduled principal payments for Insurance debt obligations as of December 31, 2025 are as follows: | |||||||
Revolving Credit Facilities | Notes Issued | Other Debt Obligations | Total | ||||
2026 | $ | $ | $ | $ | |||
2027 | |||||||
2028 | |||||||
2029 | |||||||
2030 | |||||||
Thereafter | |||||||
$ | $ | $ | $ | ||||
17. POLICY LIABILITIES
consolidated statements of financial condition as of December 31, 2025 and 2024:
December 31, 2025 | December 31, 2024 | ||
Policyholders’ Account Balances | $ | $ | |
Liability for Future Policy Benefits | |||
Additional Liability for Annuitization, Death, or Other Insurance Benefits | |||
Market Risk Benefit Liability | |||
Other Policy-Related Liabilities(1) | |||
Total Policy Liabilities | $ | $ |
(1)Other policy-related liabilities as of December 31, 2025 and 2024 primarily consist of embedded derivatives associated with contractholder deposit funds
($7.8 billion and $6.0 billion, respectively), cost-of-reinsurance liabilities (both $3.1 1.1
billion and $1.2 billion, respectively), negative VOBA ($678.4 million and $766.3 million, respectively) and outstanding claims ($355.8 million and $303.8
million, respectively).
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Policyholders’ Account Balances
and the policyholders’ account balances weighted average interest rates, net amount at risk, and cash surrender value as of
those dates:
Year Ended December 31, 2025 | |||||||||||
Fixed Rate Annuities | Fixed Indexed Annuities | Interest Sensitive Life | Funding Agreements | Other(1) | Total | ||||||
Balance as of Beginning of Period | $ | $ | $ | $ | $ | $ | |||||
Issuances and Premiums Received | |||||||||||
Benefit Payments, Surrenders, and Withdrawals | ( | ( | ( | ( | ( | ( | |||||
Interest(2) | |||||||||||
Other Activity(3) | ( | ( | ( | ( | |||||||
Balance as of End of Period | $ | $ | $ | $ | $ | $ | |||||
Less: Reinsurance Recoverable | ( | ( | ( | ( | ( | ||||||
Balance as of End of Period, Net of Reinsurance Recoverable | $ | $ | $ | $ | $ | $ | |||||
Average Interest Rate | |||||||||||
Net Amount at Risk, Gross of Reinsurance(4) | $ | $ | $ | $ | $ | $ | |||||
Cash Surrender Value(5) | $ | $ | $ | $ | $ | $ | |||||
(1)“Other” consists of activity related to payout annuities without life contingencies, preneed, variable annuities, and life products.
(2)Interest includes interest credited to policyholders’ account values, and interest accreted in other components of the policyholder account balance,
including investment-type contract values, host amounts for contractholder deposits with embedded derivatives, funding agreements, and other
associated reserves.
(3) “Other activity” includes policy charges, fees and commissions, transfers, assumption changes, fair value changes, and the impact of hedge fair value
adjustments.
(4)Net amount at risk represents the difference between the face value of the insurance policy and the reserve accumulated under that same policy.
(5)Cash surrender values are reported net of any applicable surrender charges, net of reinsurance.
Year Ended December 31, 2024 | |||||||||||
Fixed Rate Annuities | Fixed Indexed Annuities | Interest Sensitive Life | Funding Agreements | Other(1) | Total | ||||||
Balance as of Beginning of Period | $ | $ | $ | $ | $ | $ | |||||
Issuances and Premiums Received | |||||||||||
Benefit Payments, Surrenders, and Withdrawals | ( | ( | ( | ( | ( | ( | |||||
Interest(2) | |||||||||||
Other Activity(3) | ( | ( | ( | ( | |||||||
Balance as of End of Period | $ | $ | $ | $ | $ | $ | |||||
Less: Reinsurance Recoverable | ( | ( | ( | ( | ( | ||||||
Balance as of End of Period, Net of Reinsurance Recoverable | $ | $ | $ | $ | $ | $ | |||||
Average Interest Rate | |||||||||||
Net Amount at Risk, Gross of Reinsurance(4) | $ | $ | $ | $ | $ | $ | |||||
Cash Surrender Value(5) | $ | $ | $ | $ | $ | $ | |||||
(1)“Other” consists of activity related to payout annuities without life contingencies, preneed, variable annuities, and life products.
(2)Interest includes interest credited to policyholders’ account values, and interest accreted in other components of the policyholder account balance,
including investment-type contract values, host amounts for contractholder deposits with embedded derivatives, funding agreements, and other
associated reserves.
(3)“Other activity” includes policy charges, fees and commissions, transfers, assumption changes, fair value changes, and the impact of hedge fair value
adjustments.
(4)Net amount at risk represents the difference between the face value of the insurance policy and the reserve accumulated under that same policy.
(5)Cash surrender values are reported net of any applicable surrender charges, net of reinsurance.
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differences, in basis points, between rates being credited to policyholders and the respective guaranteed minimums. Account
values, as disclosed below, differ from policyholder account balances as they exclude balances associated with index credits,
contractholder deposit fund host balances, funding agreements, and other associated reserves. In addition, policyholder
account balances include discounts and premiums on assumed business which are not reflected in account values.
As of December 31, 2025 | |||||||||||
Account Values with Adjustable Crediting Rates Subject to Guaranteed Minimums: | |||||||||||
Range of Guaranteed Minimum Crediting Rates: | At Guaranteed Minimum | Guaranteed Minimum | Above Guaranteed Minimum | Above Guaranteed Minimum | Greater Than bps Above Guaranteed Minimum | Total | |||||
Less Than | $ | $ | $ | $ | $ | $ | |||||
Greater Than | |||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||
Percentage of Total | |||||||||||
As of December 31, 2024 | |||||||||||
Account Values with Adjustable Crediting Rates Subject to Guaranteed Minimums: | |||||||||||
Range of Guaranteed Minimum Crediting Rates: | At Guaranteed Minimum | Guaranteed Minimum | Above Guaranteed Minimum | Above Guaranteed Minimum | Greater Than bps Above Guaranteed Minimum | Total | |||||
Less Than | $ | $ | $ | $ | $ | $ | |||||
Greater Than | |||||||||||
Total | $ | $ | $ | $ | $ | $ | |||||
Percentage of Total | |||||||||||
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Liability for Future Policy Benefits
limited-payment contracts for the years ended December 31, 2025 and 2024:
Years Ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Payout Annuities(1) | Other(2) | Total | Payout Annuities(1) | Other(2) | Total | ||||||
Present Value of Expected Net Premiums | |||||||||||
Balance as of Beginning of Period | $ | $( | $( | $ | $( | $( | |||||
Balance at Original Discount Rate | $ | $( | $( | $ | $( | $( | |||||
Effect of Changes in Cash Flow Assumptions | ( | ( | |||||||||
Effect of Actual Variances from Expected Experience | ( | ( | ( | ( | |||||||
Adjusted Beginning of Period Balance | ( | ( | ( | ( | |||||||
Issuances | ( | ( | ( | ( | |||||||
Interest | ( | ( | ( | ( | |||||||
Net Premiums Collected | |||||||||||
Ending Balance at Original Discount Rate | ( | ( | ( | ( | |||||||
Effect of Changes in Discount Rate Assumptions | |||||||||||
Balance as of End of Period | $ | $( | $( | $ | $( | $( | |||||
Present Value of Expected Future Policy Benefits | |||||||||||
Balance as of Beginning of Period | $ | $ | $ | $ | $ | $ | |||||
Balance at Original Discount Rate | $ | $ | $ | $ | $ | $ | |||||
Effect of Changes in Cash Flow Assumptions | ( | ( | ( | ||||||||
Effect of Actual Variances from Expected Experience | ( | ( | ( | ||||||||
Adjusted Beginning of Period Balance | |||||||||||
Issuances | |||||||||||
Interest | |||||||||||
Benefit Payments | ( | ( | ( | ( | ( | ( | |||||
Ending Balance at Original Discount Rate | |||||||||||
Effect of Changes in Discount Rate Assumptions | ( | ( | ( | ( | ( | ( | |||||
Balance as of End of Period | |||||||||||
Net Liability for Future Policy Benefits | |||||||||||
Less: Reinsurance Recoverable(3) | ( | ( | ( | ( | ( | ( | |||||
Net Liability for Future Policy Benefits, Net of Reinsurance Recoverables | $ | $ | $ | $ | $ | $ | |||||
(1)Payout annuities generally only have a single premium received at contract inception. As a result, the liability for future policy benefits generally would
not reflect a present value for future premiums for payout annuities.
(2)“Other” consists of activity related to long-term care insurance, variable annuities, traditional life insurance, preneed insurance, and fixed-rate annuity
products. Mortality and morbidity risks associated with the long-term care insurance have been ceded to a third-party reinsurer.
(3)Reinsurance recoverables associated with the liability for future policy benefits is net of the effect of changes in discount rate assumptions of
$384.4 million and $(284.7 ) million for the years ended December 31, 2025 and 2024, respectively.
The following table summarizes the amount of gross premiums related to traditional and limited-payment contracts
recognized in the consolidated statements of operations for the years ended December 31, 2025, 2024, and 2023:
Gross Premiums | |||||
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Payout Annuities | $ | $ | $ | ||
Other | |||||
Total Products | $ | $ | $ | ||
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The following table reflects the weighted-average duration and weighted-average interest rates of the future policy
benefit liability as of December 31, 2025 and 2024:
As of December 31, 2025 | |||
Payout Annuities | Other | ||
Weighted-Average Interest Rates, Original Discount Rate | |||
Weighted-Average Interest Rates, Current Discount Rate | |||
Weighted-Average Liability Duration (Years, Current Rates) | |||
As of December 31, 2024 | |||
Payout Annuities | Other | ||
Weighted-Average Interest Rates, Original Discount Rate | |||
Weighted-Average Interest Rates, Current Discount Rate | |||
Weighted-Average Liability Duration (Years, Current Rates) | |||
The following reflects the undiscounted ending balance of expected future gross premiums and expected future benefits
and payments for traditional and limited-payment contracts, as of December 31, 2025 and 2024:
As of December 31, 2025 | |||
Payout Annuities | Other | ||
Expected Future Benefit Payments, Undiscounted | $ | $ | |
Expected Future Benefit Payments, Discounted (Original Discount Rate) | |||
Expected Future Benefit Payments, Discounted (Current Discount Rate) | |||
Expected Future Gross Premiums, Undiscounted | |||
Expected Future Gross Premiums, Discounted (Original Discount Rate) | |||
Expected Future Gross Premiums, Discounted (Current Discount Rate) | |||
As of December 31, 2024 | |||
Payout Annuities | Other | ||
Expected Future Benefit Payments, Undiscounted | $ | $ | |
Expected Future Benefit Payments, Discounted (Original Discount Rate) | |||
Expected Future Benefit Payments, Discounted (Current Discount Rate) | |||
Expected Future Gross Premiums, Undiscounted | |||
Expected Future Gross Premiums, Discounted (Original Discount Rate) | |||
Expected Future Gross Premiums, Discounted (Current Discount Rate) | |||
Significant Inputs, Judgments, and Assumptions used in Measuring Future Policyholder Benefits
Significant policyholder behavior and other assumption inputs to the calculation of the liability for future policy benefits
include discount rates, mortality and, for life insurance, lapse rates. Global Atlantic reviews its assumptions at least annually,
and more frequently if necessary. Accordingly, as part of the annual assumption review conducted during the years ended
December 31, 2025 and 2024, assumptions were revised for an increase in expected mortality on certain payout annuities and
pension risk transfer products, which resulted in a $97.4 million and $28.4 million increase, respectively, to net income before
taxes.
For the years ended December 31, 2025 and 2024, Global Atlantic recognized $(437.1 ) million and $238.1 million in other
comprehensive income (loss) (gross of the impact of reinsurance), respectively, due to changes in the future policy benefits
estimate from updating discount rates. During the years ended December 31, 2025 and 2024, there were no changes to the
methods used to determine the discount rates.
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Additional Liability for Annuitization, Death, or Other Insurance Benefits
years ended December 31, 2025 and 2024:
Years Ended December 31, | |||
2025 | 2024 | ||
Balance as of Beginning of Period | $ | $ | |
Effect of Changes in Cash Flow Assumptions | ( | ||
Effect of Changes in Experience | ( | ( | |
Adjusted Balance as of Beginning of Period | |||
Issuances | |||
Assessments | |||
Benefits Paid | ( | ( | |
Interest | |||
Balance as of End of Period | |||
Less: Impact of Unrealized Investment Gains and Losses | |||
Less: Reinsurance Recoverable, End of Period | |||
Balance, End of Period, Net of Reinsurance Recoverable and Impact of Unrealized Investment Gains and Losses | $ | $ | |
The additional liability for annuitization, death, or other insurance benefits relates primarily to secondary guarantees on
certain interest-sensitive life products, and preneed insurance.
other insurance benefits in the consolidated statements of operations for the years ended December 31, 2025, 2024, and
2023:
Gross Assessments | |||||
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Total Amount Recognized Within Revenue in the Consolidated Statements of Operations | $ | $ | $ | ||
The following reflects the weighted average duration and weighted average interest rate for the additional liability for
annuitization, death, or other insurance benefits as of December 31, 2025 and 2024:
As of | |||
December 31, 2025 | December 31, 2024 | ||
Weighted-Average Interest, Current Discount Rate | |||
Weighted-Average Liability Duration (Years) | |||
Significant Inputs, Judgments, and Assumptions used in Measuring the Additional Liabilities for Annuitization, Death, or Other
Insurance Benefits
Significant policyholder behavior assumption inputs to the calculation of the additional liability for annuitization, death,
or other insurance benefits include mortality, lapse rates, investment yields and interest margin. Global Atlantic reviews its
assumptions at least annually, and more frequently if necessary. Accordingly, as part of the annual assumption review
conducted during the year ended December 31, 2025, assumptions for higher mortality, lapse rates, and investment yields
were updated, which resulted in a $4.5 million increase to net income before taxes. During the year ended December 31,
2024, assumptions for lapse rates, investment yields, and interest margin were updated, which resulted in a $16.4 million
decrease to net income before taxes.
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Market Risk Benefits
Years Ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Fixed-Indexed Annuity | Variable- and Other Annuities | Total | Fixed-Indexed Annuity | Variable- and Other Annuities | Total | ||||||
Balance as of Beginning of Period | $ | $ | $ | $ | $ | $ | |||||
Balance as of Beginning of Period, Before Impact of Changes in Instrument-Specific Credit Risk | $ | $ | $ | $ | $ | $ | |||||
Issuances | ( | ( | |||||||||
Interest | |||||||||||
Attributed Fees Collected | |||||||||||
Benefit Payments | ( | ( | ( | ( | ( | ( | |||||
Effect of Changes in Interest Rates | ( | ( | ( | ||||||||
Effect of Changes in Equity Markets | ( | ( | ( | ( | ( | ( | |||||
Effect of Actual Experience Different from Assumptions | ( | ||||||||||
Effect of Changes in Other Future Expected Assumptions | ( | ( | ( | ( | |||||||
Balance as of End of Period Before Impact of Changes in Instrument-Specific Credit Risk | |||||||||||
Effect of Changes in Instrument-Specific Credit Risk | |||||||||||
Balance as of End of Period | |||||||||||
Less: Reinsurance Recoverable as of the End of the Period | ( | ( | ( | ( | |||||||
Balance as of End of Period, Net of Reinsurance Recoverable | $ | $ | $ | $ | $ | $ | |||||
Net Amount at Risk | $ | $ | $ | $ | $ | $ | |||||
Weighted-average Attained Age of Contract holders (Years) | |||||||||||
The following reflects the reconciliation of the market risk benefits reflected in the preceding table to the amounts
reported in an asset and liability position, respectively, in the consolidated statements of financial condition as of
December 31, 2025 and 2024:
As of December 31, 2025 | As of December 31, 2024 | ||||||||||
Asset | Liability | Net | Asset | Liability | Net | ||||||
Fixed-Indexed Annuities | $ | $ | $( | $ | $ | $( | |||||
Variable- and Other Annuities | ( | ( | |||||||||
Total | $ | $ | $( | $ | $ | $( | |||||
Significant Inputs, Judgments, and Assumptions Used in Measuring Market Risk Benefits
Significant policyholder behavior and other assumption inputs to the calculation of the market risk benefits include
interest rates, instrument-specific credit risk, mortality rates, surrender rates, and utilization rates. Global Atlantic reviews its
assumptions at least annually, and more frequently if necessary. Accordingly, as part of the annual assumption review
conducted during the year ended December 31, 2025, assumptions were updated for higher expected morbidity for certain
long-term care related benefit riders, offset in part by an increase in expected fixed-indexed annuity activations, which
resulted in a $6.0 million decrease to net income before taxes. During the year ended December 31, 2024, assumptions for
fixed-indexed annuities mortality, surrenders, and utilization, and variable annuity activations were updated, which resulted
in a $128.7 million increase to net income before taxes.
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Separate Account Liabilities
Separate account assets and liabilities consist of investment accounts established and maintained by Global Atlantic for
certain variable annuity and interest-sensitive life insurance contracts. Some of these contracts include minimum guarantees
such as GMDBs and GMWBs that guarantee a minimum payment to the policyholder.
The assets that support these variable annuity and interest-sensitive life insurance contracts are measured at fair value
and are reported as separate account assets on the consolidated statements of financial condition. An equivalent amount is
reported as separate account liabilities. Market risk benefit assets and liabilities for minimum guarantees are valued and
presented separately from separate account assets and separate account liabilities. For more information on market risk
benefits see “—Market risk benefits” in this footnote. Policy charges assessed against the policyholders for mortality,
administration and other services are included in “Policy fees” in the consolidated statements of operations.
Years Ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Variable Annuities | Interest-Sensitive Life | Total | Variable Annuities | Interest-Sensitive Life | Total | ||||||
Balance as of Beginning of Period | $ | $ | $ | $ | $ | $ | |||||
Premiums and Deposits | |||||||||||
Surrenders, Withdrawals and Benefit Payments | ( | ( | ( | ( | ( | ( | |||||
Investment Performance | |||||||||||
Other | ( | ( | ( | ( | ( | ( | |||||
Balance as of End of Period | $ | $ | $ | $ | $ | $ | |||||
Cash Surrender Value as of End of Period(1) | $ | $ | $ | $ | $ | $ | |||||
(1)Cash surrender value attributed to the separate accounts does not reflect the impact of surrender charges; surrender charges are attributed to
policyholder account balances recorded in the general account.
accounts:
December 31, 2025 | December 31, 2024 | ||
Asset Type: | |||
Managed Volatility Equity/Fixed Income Blended Fund | $ | $ | |
Equity | |||
Fixed Income | |||
Money Market | |||
Alternative | |||
Total Assets Supporting Separate Account Liabilities | $ | $ |
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Closed Blocks
December 31, 2025 | December 31, 2024 | ||
Assets | |||
Total Investments | $ | $ | |
Cash and Cash Equivalents | |||
Accrued Investment Income | |||
Reinsurance Recoverable | |||
Deferred Income Taxes | |||
Total Assets | |||
Liabilities | |||
Policy Liabilities | |||
Policyholder Dividend Obligation at Fair Value | |||
Policyholder Dividends Payable at Fair Value | |||
Total Policy Liabilities | |||
Accrued Expenses and Other Liabilities | |||
Total Liabilities | |||
Excess of Closed Block Liabilities Over Assets Designated to the Closed Blocks and Maximum Future Earnings to be Recognized from Closed Block Assets and Liabilities | $( | $( |
Years Ended | |||||
December 31, 2025 | December 31, 2024 | December 31, 2023 | |||
Revenues | |||||
Premiums and Other Income | $ | $ | $( | ||
Net Investment Expense | |||||
Total Revenues | ( | ||||
Benefits and Expenses | |||||
Policy Benefits and Claims | ( | ( | |||
Other Expenses | ( | ( | |||
Total Benefits and Expenses | ( | ( | |||
Net Contribution from the Closed Blocks | ( | ||||
Income Tax (Benefit) Expense | ( | ( | |||
Net Income (Loss) | $ | $ | $ | ||
Many expenses related to the closed block operations are charged to operations outside the closed blocks; accordingly,
the contribution from the closed blocks does not represent the actual profitability of the closed block operations.
The closed blocks of business represent policies acquired through acquisition, which were valued at fair value as of the
acquisition date.
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18. INCOME TAXES
KKR & Co. Inc. is a domestic corporation for U.S. federal income tax purposes and is subject to U.S. federal, state and local
income taxes at the corporate level on its share of taxable income. In addition, KKR Group Partnership and certain of its
subsidiaries operate as partnerships for U.S. federal tax purposes but as taxable entities for certain state, local or non-U.S. tax
purposes. Moreover, certain corporate subsidiaries of KKR, including certain subsidiaries of Global Atlantic, are domestic
corporations for U.S. federal income tax purposes and are subject to U.S. federal, state, and local income taxes.
For the Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Income (Loss) before Income Taxes: | |||||
United States | $ | $ | $ | ||
Foreign | |||||
Total Income (Loss) before Income Taxes | $ | $ | $ | ||
For the Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Current | |||||
Federal | $ | $ | $ | ||
State and Local | |||||
Foreign | |||||
Subtotal | |||||
Deferred | |||||
Federal | ( | ||||
State and Local | |||||
Foreign | ( | ( | |||
Subtotal | ( | ||||
Total Income Taxes | $ | $ | $ | ||
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2023-09 guidance on income tax disclosures issued in December 2023 for the year ended December 31, 2025:
Year Ended December 31, 2025 | |||
Amount | Rate (%) | ||
Statutory U.S. Federal Income Tax Rate | $ | ||
State and Local Income Tax, net of federal income tax effect (1) | |||
Foreign Tax Effects | |||
Bermuda | |||
Tax rate differential | |||
Foreign tax credits | ( | ( | |
Other foreign jurisdictions | |||
Effect of Changes in Tax Law or Rates (Current) | |||
Effect of Cross-Border Tax Laws | |||
US tax on foreign insurance company | |||
Other | ( | ( | |
Tax Credits | ( | ( | |
Change in Valuation Allowances | |||
Nontaxable or Nondeductible Items | |||
Income not attributable to KKR & Co. Inc. | ( | ( | |
Compensation charges borne by KKR Holdings | |||
Other | ( | ( | |
Changes in Unrecognized Tax Benefits | ( | ||
Other Adjustments | ( | ||
Effective Income Tax | $ | ||
(1)State and local income taxes in California and New York comprise a majority of the state and local income taxes, net of federal income tax effect category.
The following table reconciles the U.S. Federal Statutory Tax Rate to the Effective Income Tax Rate for the years ended
December 31, 2024 and 2023:
December 31, 2024 | December 31, 2023 | ||
Statutory U.S. Federal Income Tax Rate | |||
Income not attributable to KKR & Co. Inc. (1) | ( | ( | |
Foreign Income Taxes | ( | ||
State and Local Income Taxes | |||
Compensation Charges not attributable to KKR & Co. Inc. | |||
Change in Valuation Allowance | ( | ||
Non-Deductible Expenses | |||
Other | ( | ( | |
Effective Income Tax Rate |
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Asset Management and Strategic Holdings | December 31, 2025 | December 31, 2024 | |
Deferred Tax Assets | |||
Fund Management Fee Credits | $ | $ | |
Equity Based Compensation | |||
KKR Holdings Unit Exchanges (1) | |||
Depreciation and Amortization | |||
Operating Lease Liability | |||
Other | |||
Total Deferred Tax Assets before Valuation Allowance | |||
Valuation Allowance | ( | ||
Total Deferred Tax Assets | |||
Deferred Tax Liabilities | |||
Investment Basis Differences / Net Unrealized Gains & Losses | |||
Indefinite Lived Intangible Asset(2) | |||
Operating Lease Right-of-Use Asset | |||
Other | |||
Total Deferred Tax Liabilities | |||
Total Deferred Taxes, Net | $( | $( |
(1)In connection with exchanges of KKR Holdings equity into common stock of KKR & Co. Inc., KKR records a deferred tax asset associated with an increase in
KKR & Co. Inc.'s share of the tax basis of the tangible and intangible assets of KKR Group Partnership. This amount is offset by an adjustment to record
amounts due to KKR Holdings and principals under the tax receivable agreement, which is included within Due to Affiliates in the consolidated statements
of financial condition. The net impact of these adjustments was recorded as an adjustment to equity at the time of the exchanges.
(2)In connection with the acquisition of KJRM in 2022, KKR recognized a deferred tax liability resulting from the difference in the book and tax basis of the
indefinite lived intangibles.
Insurance | December 31, 2025 | December 31, 2024 | |
Deferred Tax Assets | |||
Insurance Reserves | $ | $ | |
Insurance Intangibles | |||
Net Operating Loss and Capital Loss Carryforwards | |||
Insurance Investment Basis Differences, Including Derivatives | |||
Other | |||
Total Deferred Tax Assets before Valuation Allowance | |||
Valuation Allowance | ( | ( | |
Total Deferred Tax Assets | |||
Deferred Tax Liabilities | |||
Insurance Loss Reserve Adjustment | |||
Other | |||
Total Deferred Tax Liabilities | |||
Total Deferred Taxes, Net | $ | $ |
Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income
will be generated to permit use of the existing deferred tax assets. As of December 31, 2025, a valuation allowance of
$24.1 million has been recorded against certain state deferred tax assets primarily due to tax credit carryforwards that are
expected to expire unutilized.
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In 2022, changes in market conditions, including rapidly rising interest rates, impacted the unrealized tax gains and losses
in the available for sale securities portfolios of Global Atlantic, resulting in deferred tax assets related to net unrealized tax
capital losses for which the carryforward period has not yet begun. As such, when assessing recoverability, Global Atlantic
considered our ability and intent to hold the underlying securities to recovery. Based on all available evidence, Global Atlantic
concluded that a valuation allowance should be established on a portion of the US deferred tax assets related to unrealized
tax capital losses that are not more-likely-than-not to be realized, which represents the portion of the portfolio Global Atlantic
estimates it would not be able to hold to recovery. In 2024, Global Atlantic concluded that it had the ability to utilize realized
capital loss carryforwards prior to their expiration, and to recover its unrealized losses in the available for sale securities
portfolio. As a result, Global Atlantic concluded that it was more likely than not that the related US deferred tax assets would
be wholly realizable, and consequently released the previously recorded valuation allowance recorded against its deferred
income tax assets. Therefore, the valuation allowance of $89 million was released through the income tax expense line of the
statement of operations as of December 31, 2024. As of December 31, 2025, there is no valuation allowance on realized or
unrealized capital losses, as management concluded that realization is more likely than not. Certain Global Atlantic in scope
entities have a full valuation allowance of $4.6 million on its net deferred tax assets, as realization is not more likely than not.
On December 27, 2023, the Government of Bermuda enacted the Bermuda Corporate Income Tax ("Bermuda CIT").
Commencing on January 1, 2025, the Bermuda CIT generally will impose a 15% corporate income tax on in-scope entities that
are residents in Bermuda or have a Bermuda permanent establishment. On January 2, 2024, Global Atlantic became subject to
Bermuda CIT and resulted in the establishment of a $22.1 million deferred tax asset, primarily on available-for-sale securities,
which was offset by a full valuation allowance. As of December 31, 2025, deferred tax assets associated with Bermuda CIT on
Global Atlantic and certain in-scope entities was $38.1 million. Global Atlantic does not believe those deferred tax assets will
more likely than not be realized and therefore maintains a full valuation allowance.
As of December 31, 2025, KKR has state tax credit carryforwards of $24.1 million that will begin to expire in 2031. As of
December 31, 2025, the Global Atlantic and certain in-scope entities have U.S. federal net operating loss ("NOL")
carryforwards totaling $3.3 billion; $56.3 million will begin to expire in 2034 and the remainder has an indefinite life. Global
Atlantic also has capital loss carryforwards of $1.8 billion which will begin to expire in 2027.
As of December 31, 2025, KKR has accumulated undistributed earnings generated by certain foreign subsidiaries for
which we have not recorded any deferred taxes with respect to outside U.S. federal income tax basis difference on these
subsidiaries because of our ability and intent to reinvest such earnings indefinitely unless they can be distributed tax free. KKR
will continue to evaluate its capital management plans. It is not practicable for us to determine the amount of unrecognized
deferred income tax liability due to the complexity associated with the hypothetical calculation.
On December 20, 2021, the OECD released Pillar Two Model Rules, which contemplate a global 15% minimum tax rate. In
January 2026, the OECD released a “side-by-side” administrative guidance package under Pillar Two, agreed to by 145
jurisdictions, which introduces simplification measures and additional safe harbors intended to reduce compliance burdens
and further align the global minimum tax framework. The package includes a simplified effective tax rate safe harbor,
extensions of transitional relief, a new substance-based tax incentive safe harbor, and a side-by-side system for reporting in
various countries in which we do business. For the year ended December 31, 2025, KKR concluded there was no material
impact on income taxes with respect to Pillar Two. KKR will continue to evaluate the potential future impacts of Pillar Two and
will continue to review the issuance of this guidance.
For the Year Ended | |
December 31, 2025 | |
Federal | $ |
State | |
Foreign | |
United Kingdom | |
Other | |
Total Payments, net of refunds | $ |
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Tax Contingencies
KKR files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of
business, KKR is subject to examination by U.S. federal and certain state, local and foreign tax regulators. As of December 31,
2025, tax returns of KKR and its predecessor entities are no longer subject to examinations for years before 2018 for U.S.
federal tax returns and 2014 for state and local tax returns under general statute of limitations provisions.
positions, excluding related interest and penalties, consisted of the following:
For the Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Unrecognized Tax Benefits, beginning of period | $ | $ | $ | ||
Gross increases in tax positions in prior periods | |||||
Gross decreases in tax positions in prior periods | ( | ( | |||
Gross increases in tax positions in current period | |||||
Lapse of statute of limitations | ( | ( | |||
Settlements with taxing authorities | ( | ( | |||
Unrecognized Tax Benefits, end of period | $ | $ | $ | ||
If the above tax benefits were recognized, the effective income tax rate would be reduced. KKR recognizes interest and
penalties accrued related to unrecognized tax benefits as income tax expense. Related to the unrecognized tax benefits, KKR
had a net increase of accrued penalties of $0.3 million and interest of $1.6 million during 2025 and in total, as of December
31, 2025, recognized a liability for penalties of $2.6 million and interest of $8.5 million. During 2024, penalties increased by
$0.4 million and interest increased by $1.8 million and in total, as of December 31, 2024, recognized a liability for penalties of
$2.3 million and interest of $6.9 million. During 2023, penalties decreased by $1.3 million and interest decreased by
$6.7 million and in total, as of December 31, 2023, recognized a liability for penalties of $2.0 million and interest of
$5.1 million.
19. EQUITY-BASED COMPENSATION
incentive awards for the years ended December 31, 2025, 2024, and 2023, respectively.
For the Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Asset Management(1) | $ | $ | $ | ||
Insurance | |||||
Total | $ | $ | $ | ||
(1)For the year ended December 31, 2025, KKR recorded acquisition-related stock consideration of $5.1 million.
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KKR Equity Incentive Awards
Under KKR's equity incentive plan, KKR is permitted to grant equity awards representing ownership interests in
KKR & Co. Inc. common stock. On March 29, 2019, the Amended and Restated KKR & Co. Inc. 2019 Equity Incentive Plan (the
"2019 Equity Incentive Plan") became effective. Following the effectiveness of the 2019 Equity Incentive Plan, KKR no longer
makes further grants under the Amended and Restated KKR & Co. Inc. 2010 Equity Incentive Plan, and the 2019 Equity
Incentive Plan became KKR's only plan for providing new equity awards by KKR & Co. Inc. The total number of equity awards
representing shares of common stock that may be issued under the 2019 Equity Incentive Plan is equivalent to 15 % of the
aggregate number of the shares of common stock and KKR Group Partnership Units (excluding KKR Group Partnership Units
held by KKR & Co. Inc. or its wholly-owned subsidiaries), subject to annual adjustment. As of December 31, 2025, 53,140,914
shares may be issued under the 2019 Equity Incentive Plan. KKR has also issued equity grants in the form of restricted
holdings units through KKR Holdings III L.P. ("KKR Holdings III"), which are not issued under the 2019 Equity Incentive Plan and
are currently held by certain current and former KKR employees. Equity awards granted generally consist of (i) restricted stock
units that convert into shares of common stock of KKR & Co. Inc. (or cash equivalent) upon vesting and (ii) restricted holdings
units that are exchangeable into shares of common stock of KKR & Co. Inc. upon vesting and certain other conditions,
including those described below.
Service-Vesting Awards
KKR grants restricted stock units and restricted holdings units that are subject to service-based vesting, typically over a
three to five-year period from the date of grant (referred to hereafter as "Service-Vesting Awards"). In certain cases, these
Service-Vesting Awards may have a percentage of the award that vests immediately upon grant, and certain Service-Vesting
Awards may have vesting periods longer than five years . Additionally, some but not all Service-Vesting Awards are subject to
transfer restrictions and/or minimum retained ownership requirements. Generally, the transfer restriction period, if
applicable, lasts for (i) one year with respect to one-half of the awards vesting on any vesting date and (ii) two years with
respect to the other one-half of the awards vesting on such vesting date. While providing services to KKR, some but not all of
these awards are also subject to minimum retained ownership rules requiring the award recipient to continuously hold shares
of common stock equivalents equal to at least 15 % of their cumulatively vested awards that have or had the minimum
retained ownership requirement. Holders of the Service-Vesting Awards do not participate in dividends until such awards
have met their vesting requirements.
Expense associated with the vesting of these Service-Vesting Awards is based on the closing price of KKR & Co. Inc.
common stock on the date of grant, discounted for the lack of participation rights in the expected dividends on unvested
equity awards. Expense is recognized on a straight line basis over the life of the award and assumes a forfeiture rate of up to
As of December 31, 2025, there was approximately $775 million of total estimated unrecognized expense related to
unvested Service-Vesting Awards, which is expected to be recognized over the weighted average remaining requisite service
period of 2.4 years.
presented below:
Shares | Weighted Average Grant Date Fair Value | ||
Balance, January 1, 2025 | $ | ||
Granted | |||
Vested | ( | ||
Forfeitures | ( | ||
Balance, December 31, 2025 | $ |
Market Condition Awards
KKR also grants restricted stock units and restricted holdings units that are subject to both a service-based vesting
condition and a market price based vesting condition. The following is a discussion of the Market Condition Awards, excluding
the Co-CEO Awards (as defined and discussed below).
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The number of Market Condition Awards (other than the Co-CEO awards) that will vest depend upon (i) the market price
of KKR common stock reaching certain price targets that range from $45.00 to $140.00 and (ii) the employee being employed
by KKR on a certain date, which typically ranges from five to six years from the date of grant (with exceptions for involuntary
termination without cause, death and permanent disability). The market price vesting condition is met when the average
closing price of KKR common stock during 20 consecutive trading days meets or exceeds the stock price targets. Holders of the
Market Condition Awards do not participate in dividends until such awards have met both their service-based and market
price based vesting requirements. Additionally, these awards are subject to additional transfer restrictions and minimum
retained ownership requirements after vesting.
Due to the existence of the service requirement, the vesting period for these Market Condition Awards (other than the
Co-CEO awards) is explicit, and as such, compensation expense will be recognized on (i) a straight-line basis over the period
from the date of grant through the date the award recipient is required to be employed by KKR and (ii) assumes a forfeiture
rate of up to 7 % annually based upon expected turnover. The fair value of the awards granted are based on a Monte Carlo
simulation valuation model. In addition, the grant date fair value assumes that holders of the Market Condition Awards will
not participate in dividends until such awards have met all of their vesting requirements.
assumptions used to estimate the grant date fair value of these Market Condition Awards:
Weighted Average | Range | ||
Grant Date Fair Value | $ | $ | |
Closing KKR share price as of valuation date | $ | $ | |
Risk Free Rate | |||
Volatility | |||
Dividend Yield | |||
Expected Cost of Equity |
As of December 31, 2025, there was approximately $358 million of total estimated unrecognized expense related to these
unvested Market Condition Awards, which is expected to be recognized over the weighted average remaining requisite
service period of 1.6 years.
presented below:
Shares | Weighted Average Grant Date Fair Value | ||
Balance, January 1, 2025 | $ | ||
Granted | |||
Vested | ( | ||
Forfeitures | ( | ||
Balance, December 31, 2025 | $ |
As of December 31, 2025, all of the Market Condition awards have met their market price based vesting condition. These
Market Condition awards remain unvested until their service conditions (as described above) are satisfied.
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Co-CEO Awards
On December 9, 2021, the Board of Directors approved grants of 7.5 million restricted holdings units to each of KKR’s Co-
Chief Executive Officers that are subject to both a service-based vesting condition and a market price based vesting condition
(referred to hereafter as "Co-CEOs Awards"). For both Co-Chief Executive Officers, 20
vest at each of the following KKR common stock prices targets: $95.80 , $105.80 , $115.80 , $125.80 and $135.80 . The market
price based vesting condition is met when the average closing price of KKR common stock during 20 consecutive trading days
meets or exceeds the stock price targets. In addition to the market price based vesting conditions, in order for the award to
vest, the Co-Chief Executive Officer is required to be employed by KKR on December 31, 2026 (with exceptions for involuntary
termination without cause, death and permanent disability).
These awards will be automatically canceled and forfeited upon the earlier of a Co-Chief Executive Officer’s termination
of service (except for involuntary termination without cause, death or permanent disability) or the failure to meet the market
price based vesting condition by December 31, 2028 (for which continued service is required if the market price vesting
condition is met after December 31, 2026). Co-CEO Awards do not participate in dividends until such awards have met both
their service-based and market price based vesting requirements. Additionally, these awards are subject to additional transfer
restrictions and minimum retained ownership requirements after vesting.
Due to the existence of the service requirement, the vesting period for these Co-CEO Awards is explicit, and as such,
compensation expense will be recognized on a straight-line basis over the period from the date of grant through December
31, 2026 given the derived service period is less than the explicit service period. The fair value of the awards granted are
based on a Monte Carlo simulation valuation model. In addition, the grant date fair value assumes that these Co-CEO Awards
will not participate in dividends until such awards have met all of their vesting requirements.
assumptions used to estimate the grant date fair value of these Co-CEO Awards:
Grant Date Fair Value | $ |
Closing KKR share price as of valuation date | $ |
Risk Free Rate | |
Volatility | |
Dividend Yield | |
Expected Cost of Equity |
As of December 31, 2025, there was approximately $145 million of total estimated unrecognized expense related to these
unvested Co-CEO Awards, which is expected to be recognized ratably from January 1, 2026 to December 31, 2026. As of
December 31, 2025, all Co-CEO Awards have met their market price based vesting condition. The Co-CEO Awards remain
unvested until their service conditions (as described above) are satisfied.
20. RELATED PARTY TRANSACTIONS
December 31, 2025 | December 31, 2024 | ||
Amounts Due From Unconsolidated Investment Funds | $ | $ | |
Amounts Due From Portfolio Companies | |||
Due From Affiliates | $ | $ |
Due to Affiliates consists of:
December 31, 2025 | December 31, 2024 | ||
Amounts Due to Current and Former Employees Under the Tax Receivable Agreement | $ | $ | |
Amounts Due to Unconsolidated Investment Funds | |||
Due to Affiliates | $ | $ |
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KKR Group Co. Inc. (formerly KKR & Co. Inc.) and KKR Holdings were parties to a tax receivable agreement, which required
KKR to pay to KKR Holdings or to its limited partners a portion of any cash tax savings realized by KKR resulting from their
exchange of KKR Group Partnership Units for shares of common stock. In connection with the Reorganization Mergers, KKR
Holdings and KKR terminated the tax receivable agreement on May 30, 2022; provided that, notwithstanding such
termination of the tax receivable agreement, all obligations of KKR to make payments arising under the tax receivable
agreement with respect to any exchanges completed prior to May 30, 2022 remain outstanding until fully paid.
Prior to the Reorganization Mergers, KKR was required to acquire KKR Group Partnership Units from time to time
pursuant to the exchange agreement with KKR Holdings. The KKR Group Partnership made an election under Section 754 of
the Code that was effective for each taxable year in which an exchange of KKR Group Partnership Units for shares of common
stock occurred, which may have resulted in an increase in KKR's tax basis of the assets of KKR Group Partnership at the time of
an exchange of KKR Group Partnership Units. Certain of these exchanges were expected to result in an increase in KKR's share
of the tax basis of the tangible and intangible assets of the KKR Group Partnership, primarily attributable to a portion of the
goodwill inherent in KKR's business that would not otherwise have been available. This increase in tax basis may have
increased depreciation and amortization deductions for tax purposes and therefore reduced the amount of income tax KKR
otherwise would be required to pay. This increase in tax basis may have also decreased gain (or increased loss) on future
dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
The tax receivable agreement required KKR to pay to KKR Holdings, or to current and former principals who exchanged
KKR Holdings equity for shares of common stock (as transferees of KKR Group Partnership Units), 85 % of the amount of cash
savings, if any, in U.S. federal, state and local income tax that KKR realized as a result of the increase in tax basis described
above, as well as 85 % of the amount of any such savings KKR actually realized as a result of increases in tax basis that arose
due to future payments under the agreement. KKR benefited from the remaining 15 % of cash savings, if any, in income tax
that it realized.
These payment obligations are obligations of KKR Group Co. Inc. (formerly KKR & Co. Inc.) and its wholly-owned
subsidiary, KKR Group Holdings Corp., which are treated as corporations for U.S. tax purposes, but are not payment
obligations of KKR & Co. Inc. or KKR Group Partnership L.P., and are recorded within Due to Affiliates in the accompanying
consolidated statements of financial condition. Payments made under the tax receivable agreement are required to be made
within 90 days of the filing of KKR's tax returns, which may result in a timing difference between the tax savings received by
KKR and the cash payments made to the exchanging holders of KKR Group Partnership Units.
Effective July 1, 2018, we amended the tax receivable agreement to reflect the conversion of KKR & Co. L.P. to KKR Group
Co. Inc. (formerly KKR & Co. Inc.) on July 1, 2018 (the "Conversion"). The amendment also provides that, in the event the
maximum U.S. federal corporate income tax rate is increased to a rate higher than 21.0% within the five- year period
following the Conversion, for exchanges pursuant to the exchange agreement that take place within that five-year period
(other than exchanges following the death of an individual), payments of cash tax savings realized as a result of such
exchanges shall be calculated by applying a U.S. federal corporate income tax rate not to exceed 21.0%. The amendment also
clarified that the tax benefit payments with respect to exchanges completed at any time prior to the Conversion will be
calculated without taking into account the step-up in tax basis in our underlying assets that we generated in 2018 as a result
of the Conversion.
For the years ended December 31, 2025, 2024, and 2023, cash payments that have been made under the tax receivable
agreement were $25.5 million, $27.2 million, and $16.3 million, respectively. KKR expects to benefit from the remaining 15 %
of cash savings, if any, in income tax that they realize. As of December 31, 2025, $22.8 million of cumulative income tax
savings have been realized.
Discretionary Investments
Certain of KKR's current and former employees and other qualifying personnel are permitted to invest, and have invested,
their own capital in KKR's funds, in side-by-side investments with these funds and the firm, as well as in funds managed by its
hedge fund partnerships. Side-by-side investments are made on the same terms and conditions as those acquired by the
applicable fund or the firm, except that the side-by-side investments do not subject the investor to management fees or a
carried interest. The cash contributed by these individuals aggregated $611.9 million, $863.8 million, and $629.0 million for
the years ended December 31, 2025, 2024, and 2023, respectively.
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Aircraft and Other Services
Certain of our senior employees own aircraft that are used for KKR's business in the ordinary course of its operations. The
hourly rates that KKR pays for the use of these aircraft are based on current market rates for chartering private aircraft of the
same type. KKR incurred $5.8 million, $6.2 million, and $3.4 million for the use of these aircraft for the years ended December
31, 2025, 2024, and 2023, respectively, of which substantially all was paid to entities controlled by Messrs. Kravis, Roberts and
Nuttall, and of which substantially all was borne by KKR rather than its investment funds (which indirectly bear the cost of
some of these flights at commercial airline rates).
Facilities
Messrs. Kravis and Roberts, including their estate planning trusts, whose beneficiaries include their children, and certain
other senior employees who are not executive officers of KKR, are minority limited partners in a real estate partnership that
owns KKR's Menlo Park location. Payments made to this partnership were $7.1 million, $7.7 million, and $9.5 million for the
years ended December 31, 2025, 2024, and 2023, respectively. In November 2022, this lease was renewed for another 15 -
year term.
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21. SEGMENT REPORTING
KKR operates through three
makers, who are the Co-Chief Executive Officers, allocate resources and assess performance:
•Asset Management - The asset management business offers a broad range of investment management services to
investment funds, vehicles and accounts (including Global Atlantic and the Strategic Holdings segment) and provides
capital markets services to portfolio companies and third parties. This reportable segment also reflects how its
business lines operate collaboratively with predominantly a single expense pool.
•Insurance - The insurance business is operated by Global Atlantic, which is a leading U.S. retirement and life
insurance company that provides a broad suite of protection, legacy and savings products and reinsurance solutions
to clients across individual and institutional markets. Global Atlantic primarily generates income by earning a spread
between its investment income and the cost of policyholder benefits.
•Strategic Holdings - The strategic holdings business acquires and manages interests in operating companies that are
owned by KKR. This segment primarily generates income from dividends from these businesses. Dividends are
presented net of management fees paid to the Asset Management segment. If KKR were to sell a portion or all of a
business reported in Strategic Holdings, the realized gain or loss would be presented as realized investment income,
net of a performance fee paid to the Asset Management segment.
KKR’s segment profitability measures used to make operating decisions and assess performance across KKR’s reportable
segments is presented prior to giving effect to the allocation of income (loss) among KKR & Co. Inc. and holders of any
exchangeable securities, and the consolidation of the investment funds, vehicles and accounts that KKR advises, manages or
sponsors (including CFEs). For each segment, the chief operating decision makers use the key measure of segment earnings to
allocate resources to that segment in the annual budget and forecasting process. KKR's segment profitability measures
excludes: (i) equity-based compensation charges, (ii) amortization of acquired intangibles, and (iii) transaction-related and
non-operating items, if any. Transaction-related and non-operating items arise from corporate actions, which consist of: (i)
impairments, (ii) transaction costs from acquisitions, including any acquisition-related stock consideration, (iii) depreciation on
real estate that KKR owns and occupies, (iv) contingent liabilities, net of any recoveries, (v) certain integration, restructuring,
and other non-operating expenses, and (vi) other gains or charges that affect period-to-period comparability and are not
reflective of KKR's ongoing operational performance.
Inter-segment transactions are not eliminated from segment results when management considers those transactions in
assessing the results of the respective segments. These transactions include (i) management fees earned by the Asset
Management segment as the investment adviser for Global Atlantic insurance companies, (ii) management and performance
fees earned by the Asset Management segment from the Strategic Holdings segment, and (iii) interest income and expense
based on lending arrangements where the Asset Management segment borrows from the Insurance segment. All these inter-
segment transactions are recorded by each segment based on the applicable governing agreements. Additionally, due to the
integrated nature of our segment operations and as part of our strategic capital allocation decisions, inter-segment asset
transfers have and may continue to occur. In these cases in segment reporting, the assets are transferred at their fair value,
and no gain or loss is recognized at the time of transfer. Earnings are recognized upon realization events and transactions with
third parties. Total Segment Earnings represents the total segment earnings of KKR’s Asset Management, Insurance, and
Strategic Holdings segments:
•Asset Management Segment Earnings is the segment profitability measure used to make operating decisions and to
assess the performance of the Asset Management segment. This measure is presented before income taxes and is
comprised of: (i) Fee Related Earnings, (ii) Realized Performance Income, (iii) Realized Performance Income
Compensation, (iv) Realized Investment Income, and (v) Realized Investment Income Compensation. Asset
Management Segment Earnings excludes the impact of: (i) unrealized gains (losses) on investments, (ii) unrealized
carried interest, and (iii) unrealized carried interest compensation. Management fees earned by KKR as the adviser,
manager or sponsor for its investment funds, vehicles and accounts, including its Global Atlantic insurance companies
and Strategic Holdings segment, are included in Asset Management Segment Earnings.
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•Insurance Operating Earnings is the segment profitability measure used to make operating decisions and to assess
the performance of the Insurance segment. This measure is presented before income taxes and is comprised of: (i)
Net Investment Income, (ii) Net Cost of Insurance, and (iii) General, Administrative, and Other Expenses. Insurance
Operating Earnings excludes the impact of: (i) investment gains (losses) which include realized gains (losses) related
to asset/liability matching investment strategies and unrealized investment gains (losses) and (ii) non-operating
changes in policy liabilities and derivatives which includes (a) changes in the fair value of market risk benefits and
other policy liabilities measured at fair value and related benefit payments, (b) fees attributed to guaranteed
benefits, (c) derivatives used to manage the risks associated with policy liabilities, and (d) losses at contract issuance
on payout annuities. Insurance Operating Earnings includes (i) realized gains and losses not related to asset/liability
matching investment strategies and (ii) the investment management costs that are earned by our Asset Management
segment as the investment adviser of the Global Atlantic insurance companies.
•Strategic Holdings Segment Earnings is the segment profitability measure used to make operating decisions and to
assess the performance of the Strategic Holdings segment. This measure is presented before income taxes and is
comprised of: Dividends, Net and Net Realized Investment Income. Strategic Holdings Segment Earnings excludes the
impact of unrealized gains (losses) on investments. Strategic Holdings Segment Earnings includes management fees
and performance fee expenses that are earned by the Asset Management segment.
KKR disclosed all the segment expenses under the significant expense principle for each reportable segment. There are no
expenses to be disclosed in the other segment category, because segment revenues minus segment expenses equals the
segment measure of profit of each reportable segment.
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Segment Presentation
Years Ended December 31, | ||||||
2025 | 2024 | 2023 | ||||
Asset Management | ||||||
Management Fees (1)(2) | $ | $ | $ | |||
Transaction and Monitoring Fees, Net | ||||||
Fee Related Performance Revenues | ||||||
Fee Related Compensation | ( | ( | ( | |||
Other Operating Expenses | ( | ( | ( | |||
Fee Related Earnings | ||||||
Realized Performance Income | ||||||
Realized Performance Income Compensation | ( | ( | ( | |||
Realized Investment Income (3) | ||||||
Realized Investment Income Compensation | ( | ( | ( | |||
Asset Management Segment Earnings | $ | $ | $ | |||
Insurance | ||||||
Net Investment Income (1) (4) | $ | $ | $ | |||
Net Cost of Insurance | ( | ( | ( | |||
General, Administrative and Other | ( | ( | ( | |||
Pre-tax Operating Earnings | ||||||
Pre-tax Operating Earnings Attributable to Noncontrolling Interests | ( | |||||
Insurance Operating Earnings | $ | $ | $ | |||
Strategic Holdings | ||||||
Dividends, Net (2) | $ | $ | $ | |||
Strategic Holdings Operating Earnings | ||||||
Net Realized Investment Income(3) | ||||||
Strategic Holdings Segment Earnings | $ | $ | $ | |||
Total Segment Earnings | $ | $ | $ | |||
(1) Includes intersegment management fees of $ segment from the Insurance segment for the years ended December 31, 2025, 2024, and 2023, respectively. | ||||||
(2) Includes intersegment management fees of $ Strategic Holdings segment for the years ended December 31, 2025 and 2024, respectively. | ||||||
(3) Includes intersegment performances fees of $ Strategic Holdings segment for the years ended December 31, 2025 and 2024, respectively. | ||||||
(4) Includes intersegment interest expense of $ 2024, and 2023, respectively. | ||||||
As of December 31, | ||||||
2025 | 2024 | |||||
Segment Assets: | ||||||
Asset Management | $ | $ | ||||
Insurance | ||||||
Strategic Holdings | ||||||
Total Segment Assets | $ | $ | ||||
Years Ended December 31, | ||||||
Non-Cash Expenses Excluded from Segment Earnings | 2025 | 2024 | 2023 | |||
Equity Based Compensation | ||||||
Asset Management | $ | $ | $ | |||
Insurance | ||||||
Total Non-Cash Expenses | $ | $ | $ | |||
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Reconciliations of Total Segment Amounts
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Total GAAP Revenues | $ | $ | $ | ||
Impact of Consolidation and Other | |||||
Asset Management Adjustments: | |||||
Capital Allocation-Based Income (Loss) (GAAP) | ( | ( | ( | ||
Realized Carried Interest | |||||
Realized Investment Income | |||||
Capstone Fees | ( | ( | ( | ||
Expense Reimbursements | ( | ( | ( | ||
Strategic Holdings Adjustments: | |||||
Realized Investment Income and Dividends | |||||
Insurance Adjustments: | |||||
Net Premiums | ( | ( | ( | ||
Policy Fees | ( | ( | ( | ||
Other Income | ( | ( | ( | ||
(Gains) Losses from Investments(1) | |||||
Non-Operating Changes in Policy Liabilities and Derivatives | ( | ( | ( | ||
Total Segment Revenues (2) | $ | $ | $ | ||
(1)Includes gains and losses on funds withheld receivables and payables embedded derivatives.
(2)Total Segment Revenues is comprised of (i) Management Fees, (ii) Transaction and Monitoring Fees, Net, (iii) Fee Related Performance Revenues, (iv)
Realized Performance Income, (v) Realized Investment Income, (vi) Net Investment Income, and (vii) Dividends, Net.
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Total GAAP Expenses | $ | $ | $ | ||
Impact of Consolidation and Other | ( | ( | ( | ||
Asset Management Adjustments: | |||||
Equity-based Compensation | ( | ( | ( | ||
Unrealized Carried Interest Compensation | ( | ( | ( | ||
Amortization of Intangibles | ( | ||||
Transaction-related and Non-operating Items | ( | ( | ( | ||
Reimbursable Expenses | ( | ( | ( | ||
Capstone Expenses | ( | ( | ( | ||
Insurance Adjustments: | |||||
Net Premiums | ( | ( | ( | ||
Policy Fees | ( | ( | ( | ||
Other Income | ( | ( | ( | ||
Non-Operating Changes in Policy Liabilities | ( | ( | ( | ||
Equity-Based Compensation | ( | ( | ( | ||
Amortization of Intangibles | ( | ( | ( | ||
Transaction-Related and Non-Operating Items | ( | ( | ( | ||
Total Segment Expenses (1) | $ | $ | $ | ||
(1)Total Segment Expenses is comprised of (i) Fee Related Compensation, (ii) Realized Performance Income Compensation, (iii) Realized Investment Income
Compensation, (iv) Net Cost of Insurance, (v) General, Administrative and Other, and (vi) Other Operating Expenses.
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Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Income (Loss) Before Tax (GAAP) | $ | $ | $ | ||
Impact of Consolidation and Other | ( | ( | ( | ||
Interest Expense, Net | |||||
Asset Management Adjustments: | |||||
Unrealized (Gains) Losses | ( | ( | |||
Unrealized Carried Interest | ( | ( | ( | ||
Unrealized Carried Interest Compensation | |||||
Transaction-related and Non-operating Items(1) | |||||
Equity-based Compensation | |||||
Equity-based Compensation - Performance based | |||||
Amortization of Acquired Intangibles | |||||
Strategic Holdings Adjustments: | |||||
Unrealized (Gains) Losses | ( | ( | ( | ||
Insurance Adjustments:(2) | |||||
(Gains) Losses from Investments(2,3) | |||||
Non-Operating Changes in Policy Liabilities and Derivatives(2) | |||||
Transaction-Related and Non-Operating Items(1)(2) | |||||
Equity-Based Compensation(2) | |||||
Amortization of Acquired Intangibles(2) | |||||
Total Segment Earnings | $ | $ | $ | ||
(1)For the year ended December 31, 2025, Transaction-related and Other Non-operating items includes (i) $99 million related to transaction-related costs
and other corporate actions, which includes $5 million of acquisition-related stock consideration and (ii) $39 million of costs associated with certain
integration, restructuring, and other non-operating expenses across our Asset Management and Insurance businesses.
(2)Amounts represent the portion allocable to KKR.
(3)Includes gains and losses on funds withheld receivables and payables embedded derivatives.
As of | |||
December 31, 2025 | December 31, 2024 | ||
Total GAAP Assets | $ | $ | |
Impact of Consolidation and Reclassifications | ( | ( | |
Carry Pool Reclassifications | ( | ( | |
Total Segment Assets | $ | $ | |
22. EQUITY
Stockholders' Equity
Common Stock
The common stock of KKR & Co. Inc. is entitled to vote as provided by its certificate of incorporation, Delaware General
Corporation Law and the rules of the New York Stock Exchange ("NYSE"). Subject to preferences that apply to any shares of
preferred stock outstanding at the time on which dividends are payable, the holders of common stock are entitled to receive
dividends out of funds legally available if the Board of Directors, in its discretion, determines to declare dividends and then
only at the times and in the amounts that the Board of Directors may determine. The common stock is not entitled to
preemptive rights and is not subject to conversion, redemption or sinking fund provisions.
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Series I Preferred Stock
Except for any distribution required by Delaware law to be made upon a dissolution event, the holders of Series I
preferred stock do not have any economic rights to receive dividends. Series I preferred stock is entitled to vote on various
matters that may be submitted to vote of the stockholders and the other matters as set forth in the certificate of
incorporation. Upon a dissolution event, each holder of Series I preferred stock will be entitled to a payment equal to $0.01
per share of Series I preferred stock. The Series I preferred stock will be eliminated on the Sunset Date (as defined in Note 1
"Organization"), which is scheduled to occur not later than December 31, 2026.
Series D Mandatory Convertible Preferred Stock
On March 7, 2025, KKR & Co. Inc. issued 51,750,000 shares, or $2.59 billion aggregate liquidation preference, of Series D
Mandatory Convertible Preferred Stock.
Subject to certain exceptions, so long as any share of Series D Mandatory Convertible Preferred Stock remains
outstanding, no dividend or distributions will be declared or paid on shares of KKR & Co. Inc.’s common stock, par value $0.01
per share, or any other class or series of stock ranking junior to the Series D Mandatory Convertible Preferred Stock, and no
common stock or any other class or series of stock ranking junior to the Series D Mandatory Convertible Preferred Stock will
be purchased, redeemed, or otherwise acquired for consideration by KKR & Co. Inc. or any of its subsidiaries unless, in each
case, all accumulated and unpaid dividends for all preceding dividend periods have been declared and paid in cash, shares of
common stock or a combination thereof, or a sufficient sum of cash or number of shares of common stock has been set aside
for the payment of such dividends, on all outstanding shares of Series D Mandatory Convertible Preferred Stock. In addition,
when dividends on shares of the Series D Mandatory Convertible Preferred Stock (i) have not been declared and paid in full on
any dividend payment date (or, in the case of any parity stock having dividend payment dates different from such dividend
payment dates on a dividend payment date falling within a regular dividend period related to such dividend payment date), or
(ii) have been declared but a sum of cash or number of shares of Common Stock sufficient for payment thereof has not been
set aside for the benefit of the holders thereof on the applicable regular record date, no dividends may be declared or paid on
any parity stock unless dividends are declared on the shares of Series D Mandatory Convertible Preferred Stock such that the
respective amounts of such dividends declared on the shares of Series D Mandatory Convertible Preferred Stock and such
shares of parity stock shall be allocated pro rata among the holders of the shares of Series D Mandatory Convertible Preferred
Stock and the holders of any shares of parity stock then outstanding.
Unless converted earlier, each share of the Series D Mandatory Convertible Preferred Stock will automatically convert on
the mandatory conversion date, which is expected to be March 1, 2028, into between 0.3312 shares and 0.4140 shares of
common stock, in each case, subject to customary anti-dilution adjustments described in the certificate of designations
setting forth the terms of the Series D Mandatory Convertible Preferred Stock. The number of shares of common stock
issuable upon conversion will be determined based on the average volume weighted average price per share of common
stock over the 20 consecutive trading day period beginning on, and including, the 21 st scheduled trading day immediately
prior to March 1, 2028.
Dividends on the Series D Mandatory Convertible Preferred Stock will be payable on a cumulative basis when, as and if
declared by KKR & Co. Inc.’s board of directors, or an authorized committee thereof (which will be influenced by receipt of
distributions from KKR Group Partnership in respect of our Series D mirrored preferred units that we hold in KKR Group
Partnership) at an annual rate of 6.25 % on the liquidation preference of $50.00 per share of Series D Mandatory Convertible
Preferred Stock, and may be paid in cash or, subject to certain limitations, in shares of common stock or, subject to certain
limitations, any combination of cash and shares of common stock.
If declared, dividends on the Series D Mandatory Convertible Preferred Stock will be payable quarterly on March 1, June
1, September 1 and December 1 of each year to, and including, March 1, 2028, commencing on June 1, 2025.
Upon KKR & Co. Inc.’s voluntary or involuntary liquidation, winding-up or dissolution, each holder of the Series D
Mandatory Convertible Preferred Stock will be entitled to receive a liquidation preference in the amount of $50.00 per share
of Series D Mandatory Convertible Preferred Stock, plus an amount equal to accumulated and unpaid dividends on such
shares, whether or not declared, to, but excluding, the date fixed for liquidation, winding-up or dissolution, such amount to be
paid out of KKR & Co. Inc.’s assets legally available for distribution to its stockholders after satisfaction of debt and other
liabilities owed to KKR & Co. Inc.’s creditors and holders of shares of its stock ranking senior to the Series D Mandatory
Convertible Preferred Stock and before any payment or distribution is made to holders of any stock ranking junior to the
Series D Mandatory Convertible Preferred Stock, including, without limitation, Common Stock.
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Share Repurchase Program
Under KKR's repurchase program, shares of common stock of KKR & Co. Inc. may be repurchased from time to time in
open market transactions, in privately negotiated transactions or otherwise. The timing, manner, price and amount of any
repurchases will be determined by KKR in its discretion and will depend on a variety of factors, including legal requirements,
price and economic and market conditions. In addition to the repurchases of common stock, the repurchase program will be
used for the retirement (by cash settlement or the payment of tax withholding amounts upon net settlement) of equity
awards granted pursuant to our 2019 Equity Incentive Plan representing the right to receive common stock. KKR expects that
the program will be in effect until the maximum approved dollar amount has been used. The program does not require KKR to
repurchase or retire any specific number of shares of common stock or equity awards, respectively, and the program may be
suspended, extended, modified or discontinued at any time. In April 2024, the share repurchase program was amended such
that when the remaining available amount under the share repurchase program becomes $50 million or less, the total
available amount under the share repurchase program will automatically add an additional $500 million to the then remaining
available amount of $50 million or less (the “Share Repurchase Program Increase Threshold”). The Share Repurchase Program
Increase Threshold was reached during the second quarter of 2025, which automatically added an additional $500 million to
the then remaining available amount. As of January 30, 2026, there was approximately $439 million remaining under the
program. Any additional increases to this remaining available amount would require a separate approval by the Board of
Directors of KKR & Co. Inc. The repurchase program does not have an expiration date.
retired under the repurchase program:
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Shares of common stock repurchased | |||||
Equity awards for common stock retired | |||||
Change in KKR & Co. Inc.'s Ownership Interest
Vesting of restricted holdings units results in a change in ownership in KKR Group Partnership, while KKR retains a
controlling interest, and is accounted for as an equity transaction between the controlling and noncontrolling interests.
Noncontrolling Interests
Noncontrolling interests in consolidated entities represent the non-redeemable ownership interests in KKR that are held
primarily by:
(i)third party fund investors in KKR's consolidated funds and certain other entities;
(ii)third parties in KKR's Capital Markets business line;
(iii)certain current and former employees who hold exchangeable securities; and
(iv)third-party investors in certain of Global Atlantic's consolidated entities.
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Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Balance at the beginning of the period | $ | $ | |||
Net Income (Loss) Attributable to Noncontrolling Interests | |||||
Other Comprehensive Income (Loss), net of tax | |||||
Compensation Modification – Issuance of Holdings III Units | |||||
Equity-Based Compensation (Non-Cash Contribution) | |||||
2024 GA Acquisition – Cash consideration | ( | ||||
2024 GA Acquisition – Issuance of Holdings III Units | |||||
Change in KKR & Co. Inc.'s Ownership - 2024 GA Acquisition | |||||
Change in KKR & Co. Inc.'s Ownership Interest | ( | ( | ( | ||
Capital Contributions | |||||
Capital Distributions | ( | ( | ( | ||
Changes in Consolidation | ( | ||||
Impact of Acquisition – HealthCare Royalty Management, LLC (1) | |||||
Balance at the end of the period | $ | $ | $ | ||
(1)Represents noncontrolling interests in HealthCare Royalty Management, LLC as of the acquisition date.
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23. REDEEMABLE NONCONTROLLING INTERESTS
Redeemable noncontrolling interests primarily represents noncontrolling interests of certain KKR investment funds and
vehicles that are subject to periodic redemption by fund investors following the expiration of a specified period of time, or
may be withdrawn subject to a redemption fee during the period when capital may not be otherwise withdrawn.
Consolidated fund investor's interests subject to redemption as described above are presented as Redeemable Noncontrolling
Interests in the accompanying consolidated statements of financial condition and presented as Net Income (Loss) Attributable
to Redeemable Noncontrolling Interests in the accompanying consolidated statements of operations. When redeemable
amounts become legally payable to fund investors, they are classified as a liability and included in Accounts Payable, Accrued
Expenses, and Other Liabilities in the accompanying consolidated statements of financial condition.
Years Ended December 31, | |||||
2025 | 2024 | 2023 | |||
Balance at the beginning of the period | $ | $ | $ | ||
Net Income (Loss) Attributable to Redeemable Noncontrolling Interests | ( | ||||
Capital Contributions | |||||
Capital Distributions | ( | ( | ( | ||
Change in KKR & Co. Inc.'s Ownership Interest | ( | ||||
Changes in Consolidation | ( | ||||
Balance at the end of the period | $ | $ | $ | ||
24. COMMITMENTS AND CONTINGENCIES
Funding Commitments and Others
As of December 31, 2025, KKR had unfunded commitments consisting of $10.5 billion to its investment funds and
vehicles. These unfunded commitments also include funding requirements to levered investment vehicles and structured
transactions to fund or otherwise be liable for a portion of the vehicle's investment losses and/or to provide the vehicle with
liquidity upon certain termination events.
In addition to these uncalled commitments and funding obligations to KKR's investment funds and vehicles, KKR has
entered into contractual commitments primarily with respect to underwriting transactions, debt financing, revolving credit
facilities, and syndications in KKR's Capital Markets business line. As of December 31, 2025, these capital markets
commitments amounted to $1.0 billion. Whether these amounts are actually funded, in whole or in part, depends on the
contractual terms of such capital markets commitments, including the satisfaction or waiver of any conditions to closing or
funding. KKR's capital markets business has arrangements with third parties, which are expected to reduce KKR's risk under
certain circumstances when underwriting certain debt transactions. As a result, our unfunded capital markets commitments
as of December 31, 2025, have been reduced to reflect the amount expected to be funded by such third parties. As of
December 31, 2025, KKR's capital markets business line has entered into such arrangements representing a total notional
amount of $5.0 billion.
Global Atlantic has commitments to purchase or fund investments of $7.3 billion as of December 31, 2025. These
commitments include those related to mortgage loans, other lending facilities, and real assets. For those commitments that
represent a contractual obligation to extend credit, Global Atlantic has recorded a liability of $30.9 million for current
expected credit losses as of December 31, 2025.
In addition, Global Atlantic has entered into agreements to purchase loans. Global Atlantic's obligations under these
agreements are subject to change, curtailment, and cancellation based on various provisions including repricing mechanics,
due diligence reviews, and performance or pool quality, among other factors.
Global Atlantic has certain contingent funding obligations related to development-stage renewable energy projects in the
amount of $322.2 million as of December 31, 2025, with expiration dates occurring between March 2026 and September
2027. For accounting purposes, these contingent funding obligations are considered guarantees of the obligations of the
development-stage renewable energy projects.
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providers were as follows:
2026 | $ | |
2027 | ||
2028 | ||
2029 | ||
2030 | ||
Thereafter | ||
Total | $ |
Non-cancelable Operating Leases
KKR's non-cancelable operating leases consist of leases of office space around the world. There are no material rent
holidays, contingent rent, rent concessions, or leasehold improvement incentives associated with any of these property
leases. In addition to base rentals, certain lease agreements are subject to escalation provisions and rent expense is
recognized on a straight‑line basis over the term of the lease agreement. Global Atlantic also enters into land leases for its
consolidated investments in renewable energy.
operating leases are as follows:
2026 | $ | |
2027 | ||
2028 | ||
2029 | ||
2030 | ||
Thereafter | ||
Total Lease Payments Required | ||
Less: Imputed Interest | ||
Total Operating Lease Liabilities | $ |
As of December 31, 2025, the approximate aggregate future lease payments required on the Global Atlantic operating
leases are as follows:
2026 | $ | |
2027 | ||
2028 | ||
2029 | ||
2030 | ||
Thereafter | ||
Total Lease Payments Required | ||
Less: Imputed Interest | ||
Total Operating Lease Liabilities | $ |
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Contingent Repayment Guarantees
The partnership documents governing KKR's carry-paying investment funds and vehicles generally include a "clawback"
provision that, if triggered, may give rise to a contingent obligation requiring the general partner to return amounts to the
fund for distribution to the fund investors at the end of the life of the fund. Under a clawback obligation, upon the liquidation
of a fund, the general partner is required to return, typically on an after-tax basis, previously distributed carry to the extent
that, due to the diminished performance of later investments, the aggregate amount of carry distributions received by the
general partner during the term of the fund exceed the amount to which the general partner was ultimately entitled,
including the effects of any performance thresholds. KKR has guaranteed its general partners' clawback obligations.
As of December 31, 2025, approximately $150 million of carried interest was subject to this clawback obligation,
assuming that all applicable carry-paying investment funds were liquidated at their December 31, 2025 fair values. Although
KKR would be required to remit the entire amount to fund investors that are entitled to receive the clawback payment, KKR
would be entitled to seek reimbursement of approximately $65 million of that amount from Associates Holdings, which is not
a KKR subsidiary. As of December 31, 2025, Associates Holdings had access to cash reserves sufficient to reimburse the full
$65 million that would be due to KKR. If the investments in all carry-paying funds were to be liquidated at zero value, a
possibility that management views to be remote, the clawback obligation would have been approximately $5.8 billion as of
December 31, 2025. KKR will acquire control of Associates Holdings when a subsidiary of KKR becomes its general partner
upon the closing of the transactions contemplated to occur on the Sunset Date (as defined in Note 1 "Organization"), which
will occur not later than December 31, 2026.
Carried interest is recognized in the consolidated statements of operations based on the contractual conditions set forth
in the agreements governing the fund as if the fund were terminated and liquidated at the reporting date and the fund's
investments were realized at the then estimated fair values. Amounts earned pursuant to carried interest are earned by the
general partner of those funds to the extent that cumulative investment returns are positive and where applicable, preferred
return thresholds have been met. If these investment amounts earned decrease or turn negative in subsequent periods,
recognized carried interest will be reversed and to the extent that the aggregate amount of carry distributions received by the
general partner during the term of the fund exceed the amount to which the general partner was ultimately entitled, a
clawback obligation would be recorded. For funds that are consolidated, this clawback obligation, if any, is reflected as an
increase in noncontrolling interests in the consolidated statements of financial condition. For funds that are not consolidated,
this clawback obligation, if any, is reflected as a reduction of KKR's investment balance as this is where carried interest is
initially recorded.
Indemnifications and Other Guarantees
KKR may incur contingent liabilities for claims that may be made against it in the future. KKR enters into contracts that
contain a variety of representations, warranties and covenants, including indemnifications. KKR (including KFN) and certain of
KKR's investment funds have provided and provide certain credit support, such as indemnities and guarantees, relating to a
variety of matters, including non-recourse carve-out guarantees for fraud, willful misconduct and other wrongful acts in
connection with the financing of (i) certain real estate investments that we have made, including KKR's corporate real estate,
and (ii) certain investment vehicles that KKR manages or sponsors.
KKR also has provided, and provides, credit support in connection with its businesses, including:
i.to certain of its subsidiaries' obligations in connection with a limited number of investment vehicles that KKR
manages,
ii.in connection with repayment and funding obligations to third-party lenders on behalf of certain employees,
excluding its executive officers, in connection with their personal investments in KKR investment funds and a
levered multi-asset investment vehicle,
iii.through a contingent guarantee of a subsidiary’s loan repayment obligations, which does not become effective
unless and until its loan becomes accelerated due to certain specified events of default involving the
investment vehicles managed by KJRM,
iv.the obligations of our subsidiaries' funding obligations to our investment vehicles, and
v.certain of our investment vehicles to fund or otherwise be liable for a portion of their investment losses and/or
to provide them with liquidity upon certain termination events.
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In addition, KKR has agreed to tender to one of its consolidated investment vehicles up to a fixed number of shares that
KKR owns in it if the net asset value of such shares is less than an agreed upon value on June 1, 2027.
KKR may also become liable for certain fees payable to sellers of businesses or assets if a transaction does not close,
subject to certain conditions, if any, specified in the acquisition agreements for such businesses or assets.
In addition, the Global Atlantic business was formerly owned by The Goldman Sachs Group, Inc. (together with its
subsidiaries, "Goldman Sachs"). In connection with the separation of Global Atlantic from Goldman Sachs in 2013, Global
Atlantic entered into a tax benefit payment agreement with Goldman Sachs. Under the tax benefit payment agreement,
Global Atlantic (Fin) Company ("GA FinCo"), a Delaware corporation and wholly-owned indirect subsidiary of TGAFG, the
holding company for the Global Atlantic business, is obligated to make annual payments out of available cash, guaranteed by
Global Atlantic Financial Group Limited, to Goldman Sachs over an approximately 25-year period. As of December 31, 2025,
the present value of the remaining amount to be paid is $46.3 million. Although these payments are subordinated and
deferrable, deferral of these payments would result in restrictions on distributions by GA FinCo and Global Atlantic Financial
Group Limited.
Unless otherwise stated above, KKR's maximum exposure under the arrangements described under this section “—
Indemnifications and Other Guarantees” are currently unknown as there are no stated or notional amounts included in these
arrangements and KKR's liabilities for these matters would require a claim to be made against KKR in the future.
Legal Proceedings
From time to time, KKR (including Global Atlantic) is involved in various legal proceedings, requests for information,
lawsuits, arbitration, and claims incidental to the conduct of KKR's businesses. KKR's businesses are also subject to extensive
regulation, which may result in regulatory or other legal proceedings against them. Moreover, in the ordinary course of
business, KKR is and can be the defendant or the plaintiff in numerous lawsuits with respect to acquisitions, bankruptcy,
insolvency and other events. Such lawsuits may involve claims, or may be resolved on terms, that adversely affect the value of
certain investments owned by KKR's funds and Global Atlantic's insurance companies.
Kentucky Matter
In December 2017, KKR & Co. L.P. (which is now KKR Group Co. Inc.) and its then Co-Chief Executive Officers, Henry Kravis
and George Roberts, were named as defendants in a lawsuit filed in Kentucky state court (the “2017 Action”) alleging, among
other things, the violation of fiduciary and other duties in connection with certain separately managed accounts that Prisma
Capital Partners LP, a former subsidiary of KKR, manages for the Kentucky Retirement Systems. Also named as defendants in
the lawsuit are certain current and former trustees and officers of the Kentucky Retirement Systems, Prisma Capital Partners
LP, and various other service providers to the Kentucky Retirement Systems and their related persons. The 2017 Action was
dismissed at the direction of the Supreme Court of Kentucky for lack of Kentucky constitutional standing. This dismissal
became final on February 16, 2024.
On July 21, 2020, the Office of the Attorney General, on behalf of the Commonwealth of Kentucky (the "Kentucky AG"),
filed a new lawsuit in the same Kentucky state court (the “2020 AG Action”) making essentially the same allegations as those
raised in the 2017 Action, including against what was then KKR & Co. Inc. (now KKR Group Co. Inc.) and Messrs. Kravis and
Roberts. On May 1, 2024, the trial court denied motions to dismiss the 2020 AG Action filed by KKR & Co. Inc. and Messrs.
Kravis and Roberts.
On April 8, 2024, after receiving permission from the Kentucky trial court in the 2020 AG Action, the Kentucky AG
amended its complaint in the 2020 AG Action to add a claim for breach of contract. The Kentucky AG also filed an action (the
"2024 AG Action") substantially identical to the 2020 AG Action, including the new claim for breach of contract. On April 23,
2024, KKR & Co. Inc., Messrs. Kravis and Roberts and other defendants moved to strike the Kentucky AG's amended complaint
in the 2020 AG Action, to stay consideration of the breach of contract claim and the 2024 AG Action until after the trial court's
ruling on the motions to dismiss the 2020 AG Action, and to deny a motion by the Kentucky AG to consolidate the 2020 AG
Action and the 2024 AG Action. These motions were denied, and the trial court consolidated the 2020 AG Action with the
2024 AG Action. On June 17, 2024, KKR & Co. Inc., Messrs. Kravis and Roberts and other defendants filed new motions to
dismiss the consolidated 2020 AG Action and 2024 AG Action.
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In January 2021, some of the attorneys for the plaintiffs in the 2017 Action filed a new lawsuit on behalf of a new set of
plaintiffs, who claim to be “Tier 3” members of Kentucky Retirement Systems (the “Tier 3 Plaintiffs”), alleging substantially the
same allegations as in the 2017 Action. On July 9, 2021, the Tier 3 Plaintiffs served an amended complaint, which purports to
assert, on behalf of a class of beneficiaries of Kentucky Retirement Systems, direct claims for breach of fiduciary duty and civil
violations under the Racketeer Influenced and Corrupt Organizations Act (“RICO”). This complaint was removed to the U.S.
District Court for the Eastern District of Kentucky, which has entered an order staying this case until the completion of the
2020 AG Action. On August 20, 2021, the Tier 3 Plaintiffs and other individual plaintiffs filed a second complaint in Kentucky
state court (the “Second Tier 3 Action”), purportedly on behalf of Kentucky Retirement Systems’ funds, alleging the same
claims against what was then KKR & Co. Inc. (now KKR Group Co. Inc.) and Messrs. Kravis and Roberts as in the July 9th
amended complaint but without the RICO or class action allegations. On May 1, 2024, the trial court denied motions to
dismiss the Second Tier 3 Action filed by KKR & Co. Inc. and Messrs. Kravis and Roberts. On July 3, 2024, KKR & Co. Inc.,
Messrs. Kravis and Roberts and other defendants filed a writ of prohibition asking the Kentucky Court of Appeals to order the
trial court to dismiss the Second Tier 3 Action. On November 12, 2024, the Court of Appeals denied the request for a writ of
prohibition. Defendants have appealed that denial by petitioning the Kentucky Supreme Court for a writ of prohibition. The
Second Tier 3 Action is stayed pending the outcome of this petition.
On March 24, 2022, in a separate declaratory judgment action brought by the Commonwealth of Kentucky regarding the
enforceability of certain indemnification provisions available to what was then KKR & Co. Inc. (now KKR Group Co. Inc.) and
Prisma Capital Partners LP, the Kentucky state court concluded that it has personal jurisdiction over KKR & Co. Inc. in that
action, and that the indemnification provisions violated the Kentucky Constitution and were therefore unenforceable. On
December 1, 2023, the Kentucky Court of Appeals reversed the trial court’s summary judgment on the issue of personal
jurisdiction over KKR & Co. Inc., but affirmed the trial court’s rulings that the indemnification provisions violated the Kentucky
Constitution and were unenforceable. On February 5, 2024, the Kentucky Court of Appeals denied the petitions of KKR & Co.
Inc. and others for rehearing. On April 8, 2024, KKR & Co. Inc. and other defendants in the declaratory judgment case filed
motions with the Supreme Court of Kentucky for discretionary review of the Court of Appeals' December 1, 2023 decision. On
August 14, 2024, the Kentucky Supreme Court granted discretionary review in the Kentucky AG’s declaratory judgment case of
both personal jurisdiction over KKR & Co. Inc. and the enforceability and constitutionality of the indemnification provisions
and, on September 22, 2025, opening briefs were filed by KKR & Co. Inc. and other defendants. The Commonwealth of
Kentucky filed its response briefs on November 21, 2025, and KKR & Co. Inc. and other defendants filed their reply briefs on
December 15, 2025.
On January 8, 2025, KKR, Messrs. Kravis and Roberts, Prisma Capital Partners L.P., and certain other defendants entered
into an agreement with the Commonwealth of Kentucky, Kentucky Public Pensions Authority, County Employees Retirement
System and Kentucky Retirement Systems (the “KPPA Entities”) to settle the 2020 AG Action and the 2024 AG Action. On May
12, 2025, the Kentucky trial court entered an order declining to enter the parties’ jointly proposed order approving the
settlement. Because the receipt of the court’s approval was a contractual condition to the settlement becoming final, the
settlement agreement terminated. KKR, Messrs. Kravis and Roberts, Prisma Capital Partners L.P., and the other defendants
that were party to the settlement agreement continue to deny any liability, wrongdoing, or damage, maintain that the
settlement was not an admission of any fault, liability, wrongdoing or damage, and maintain that they entered into the
settlement solely to avoid further legal expense, inconvenience, and the distraction of burdensome and protracted litigation.
KKR intends to continue to vigorously defend against all claims against KKR and Messrs. Kravis and Roberts.
On November 19, 2025, the Kentucky Public Pensions Authority (“KPPA”) filed a motion to intervene in the consolidated
2020 AG Action and 2024 AG Action to assert claims against KKR & Co. Inc., Prisma Capital Partners LP, and Prisma Capital
Partners LLC. On December 8, 2025, the court entered an agreed order tendered by the parties granting KPPA’s motion to
intervene and ordering that all briefing and deadlines relating to KPPA’s intervening complaint are stayed pending decision by
the Kentucky Supreme Court in the appeals arising out of the Kentucky AG’s declaratory judgment action.
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Shareholder Derivative Litigation
On July 30, 2024, a shareholder derivative complaint was filed in Delaware Chancery Court and was subsequently
amended on August 7, 2024 (first amended complaint) and further amended on August 19, 2025 (second amended
complaint). The operative second amended complaint claims, among other matters, that the Co-Founders and various current
and former executive officers and directors of KKR & Co. Inc. breached fiduciary duties and wasted corporate assets in
connection with transactions contemplated by the Reorganization Agreement pursuant to which, among other things, the Co-
Founders, certain current and former executive officers, and other senior executives of KKR received common stock from KKR.
The suit seeks to recover on behalf of KKR & Co. Inc. a cancellation of shares issued in the reorganization, monetary damages,
injunctive relief, restitution, and other remedies. KKR & Co. Inc. and other defendants filed a motion to dismiss the operative
second amended complaint on October 6, 2025. On December 18, 2025, plaintiffs filed their opposition to the motion to
dismiss the second amended complaint. Defendants filed their response on February 13, 2026.
Regulatory Matters
KKR currently is, and expects to continue to become from time to time, subject to various examinations, inquiries and
investigations by various U.S. and non-U.S. governmental and regulatory agencies. Such examinations, inquiries and
investigations may result in the commencement of civil, criminal or administrative proceedings, or the imposition of fines,
penalties, or other remedies, against KKR and its personnel. KKR is subject to periodic examinations of its regulated businesses
by various U.S. and non-U.S. governmental and regulatory agencies, including but not limited to the Securities and Exchange
Commission ("SEC"), Financial Industry Regulatory Authority ("FINRA"), the U.K. Financial Conduct Authority, Central Bank of
Ireland, Monetary Authority of Singapore, U.S. state insurance regulatory authorities, and the Bermuda Monetary Authority.
KKR may also become subject to civil, criminal, administrative, or other inquiries or investigations (through a request for
information, civil investigative demand, subpoena or otherwise) by any of the foregoing governmental and regulatory
agencies as well as by any other U.S. or non-U.S. governmental or regulatory agency, including but not limited to the SEC, U.S.
Department of Justice ("DOJ"), U.S. state attorney generals, and similar non-U.S. governmental or regulatory agencies.
Since 2022, as previously disclosed, KKR has been subject to investigations by the Antitrust Division of the DOJ (the “DOJ”)
related to the accuracy and completeness of certain filings made by KKR pursuant to the premerger notification requirements
under the Hart‐Scott‐Rodino Act of 1976 (“HSR”) for certain transactions in 2021 and 2022. On January 14, 2025, the DOJ filed
a civil antitrust complaint (the “DOJ Complaint”) in the U.S. District Court for the Southern District of New York against KKR
and various KKR-sponsored investment entities (the “KKR Defendants”) alleging violations of the HSR Act. The DOJ Complaint
requests various relief for the alleged violations of the HSR Act by the KKR Defendants, including civil penalties in an amount
to be determined and various equitable relief, including potential disgorgement and injunctive relief against future violations
of the HSR Act. On January 14, 2025, KKR filed a complaint (the “KKR Complaint”) in the U.S. District Court for the District of
Columbia against Doha Mekki in her official capacity as Acting Assistant Attorney General of the United States for the
Antitrust Division, the DOJ, the Federal Trade Commission (“FTC”), and the United States of America pertaining to the HSR-
related investigations conducted by the DOJ. On January 16, 2025, KKR voluntarily dismissed the KKR Complaint filed in the
U.S. District Court for the District of Columbia and re-filed it in the U.S. District Court for the Southern District of New York as
related to the DOJ Complaint. The KKR Complaint requests various forms of relief, including declaratory judgments that: (i)
KKR did not violate the HSR Act; (ii) the DOJ’s and FTC’s interpretations of the HSR Act are unconstitutionally vague; and (iii)
the DOJ seeks an excessive fine in violation of the U.S. Constitution. KKR intends to vigorously defend against the DOJ
Complaint and filed a motion to dismiss the DOJ Complaint on April 17, 2025. The DOJ filed its motion to dismiss the KKR
Complaint on April 23, 2025, and KKR and the DOJ agreed to dismiss one count of the KKR Complaint and to stay the rest of
the DOJ’s motion to dismiss pending resolution of KKR’s motion to dismiss the DOJ Complaint. The DOJ has continued its
investigations into certain of KKR’s past HSR filings, and KKR continues to cooperate in connection with these investigations.
The DOJ may initiate additional civil or criminal proceedings or take other actions against KKR, its employees or portfolio
companies, which could include further antitrust investigations into past HSR filings or transactions or other purported
violations of law. There can be no certainty as to the possible outcome of the DOJ Complaint, the KKR Complaint, the DOJ’s
investigations, or such other proceedings or other actions, any of which could result in a range of adverse financial and non‐
financial consequences to KKR. Even in the event that the parties are able to settle the pending litigation, it is possible that
any such settlement could involve significant monetary penalties and/or other possible remedial measures. In addition, KKR is
currently, and may from time to time become, subject to other investigations by the Antitrust Division of the DOJ and other
U.S. or non-U.S. governmental authorities related to antitrust matters, including the European Commission’s investigation
relating to the acquisition of certain infrastructure assets of Telecom Italia S.p.A. and FiberCop S.p.A. KKR is currently
cooperating in connection with these other investigations.
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Loss Contingencies
KKR establishes an accrued liability for legal or regulatory proceedings only when those matters present loss
contingencies that are both probable and reasonably estimable. KKR includes in its financial statements the amount of any
reserve for regulatory, litigation and related matters that Global Atlantic includes in its financial statements. No loss
contingency is recorded for matters where such losses are either not probable or reasonably estimable (or both) at the time
of determination. Such matters also have the possibility of resulting in losses in excess of any amounts accrued. To the extent
KKR can in any particular period estimate an aggregate range of reasonably possible losses, these decisions involve significant
judgment given that it is inherently difficult to determine whether any loss for a matter is probable or even possible or to
estimate the amount of any loss in many legal, governmental and regulatory matters.
Estimating an accrued liability or a reasonably possible loss involves significant judgment due to many uncertainties,
including among others: (i) the proceeding may be in early stages; (ii) damages sought may be unspecified, unsupportable,
unexplained or uncertain; (iii) discovery may not have been started or is incomplete; (iv) there may be uncertainty as to the
outcome of pending appeals or motions; (v) there may be significant factual issues to be resolved; (vi) there may be novel
legal issues or unsettled legal theories to be presented or a large number of parties; or (vii) the proceeding relates to a
regulatory examination, inquiry, or investigation. It is not possible to predict the ultimate outcome of all pending litigations,
arbitrations, claims, and governmental or regulatory examinations, inquiries, investigations and proceedings, and some of the
matters discussed above seek or may seek potentially large or indeterminate relief. Consequently, management is unable as
of the date of filing of this report to estimate an amount or range of reasonably possible losses related to matters pending
against KKR. In addition, any amounts accrued as loss contingencies or disclosed as reasonably possible losses may be, in part
or in whole, subject to insurance or other payments such as contributions and indemnity, which may reduce any ultimate loss.
As of the date of filing this report, management does not believe, based on currently available information, that the
outcomes of the matters pending against KKR will have a material adverse effect upon its financial statements. However,
given the potentially large and/or indeterminate relief sought or that may be sought in certain of these matters and the
inherent unpredictability of litigations, arbitrations, claims, and governmental or regulatory examinations, inquiries,
investigations and proceedings, it is possible that an adverse outcome in certain matters could have a material adverse effect
on KKR's financial results in any future period. In addition, there can be no assurance that material losses will not be incurred
from claims that have not yet been asserted or those where potential losses have not yet been determined to be probable or
possible and reasonably estimable.
Other Financing Arrangements
Global Atlantic has financing arrangements with unaffiliated third parties to support the reserves of its affiliated special
purpose reinsurers. Total fees associated with these financing arrangements were $31.6 million, $17.9 million, and
$20.3 million for the years ended December 31, 2025, 2024, and 2023, respectively, and are included in insurance expenses in
the consolidated statements of operations. As of December 31, 2025 and 2024, the total capacity of the financing
arrangements with third parties was $2.6 billion and $2.4 billion, respectively.
Other than the matters disclosed above, there were no outstanding or unpaid balances from the financing arrangements
with unaffiliated third parties as of both December 31, 2025 and 2024.
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25. CAPITAL & REGULATORY REQUIREMENTS
Insurance subsidiary capital requirements
All of our Global Atlantic insurance companies are subject to minimum capital and surplus requirements. Insurance
companies typically operate in excess of such requirements. Failure to maintain such minimum capital will result in regulatory
actions, including in certain circumstances regulatory takeover of the insurance company.
In the United States, our Global Atlantic's insurance companies are subject to risk based capital ("RBC") standards and
other minimum capital and surplus requirements imposed by state laws. The RBC formula is intended to measure the
adequacy of the insurance company’s statutory surplus in relation to the risks inherent in its business. The RBC formula
requires higher surplus in relation to items deemed to have higher risk. Regulatory action is triggered beginning at 200% RBC
and below.
Our Global Atlantic Bermuda insurance companies are subject to Bermuda Solvency Capital Requirements ("BSCR")
standards and other minimum capital and surplus requirements imposed by the BMA. The BMA expects that insurers operate
at or above a BSCR ratio of at least 120%.
Each of our Global Atlantic insurance companies exceeded the minimum requirements that would trigger regulatory
action for all periods presented in this report.
Insurance subsidiary dividend restrictions
Payments of dividends by our U.S. and Bermuda-domiciled insurance companies are restricted by insurance statutes and
regulations. Our ability to pay dividends out of our U.S.-domiciled insurance companies is limited to the dividend paying
capacity of Global Atlantic's indirect insurance subsidiary, Commonwealth Annuity and Life Insurance Company
(“Commonwealth”). Commonwealth has negative unassigned surplus, and while it remains so, Commonwealth must obtain
written approval from the Massachusetts Division of Insurance prior to the payment of any dividend or distribution. Without
prior regulatory approval, and subject to maintaining certain solvency requirements, our U.S. and Bermuda insurance
subsidiaries, may declare ordinary dividends or distributions to their holding companies during 2025, as follows:
($ in thousands) | Ordinary dividend and distribution capacity | |
U.S. domiciled | ||
Commonwealth Annuity and Life Insurance Company | ||
Bermuda domiciled | ||
Global Atlantic Re Limited | $ |
Shareholders’ equity of our principal U.S.-domiciled insurance subsidiary, Commonwealth Annuity and Life Insurance
Company, determined pursuant to statutory accounting rules was approximately $6.8 billion and $6.2 billion as of December
31, 2025 and 2024, respectively. Statutory surplus computed under those methodologies differ from equity reported in
accordance with U.S. GAAP primarily because fixed maturity securities are required to be carried at cost or amortized cost,
embedded derivatives on funds withheld reinsurance balances are not recognized, policy acquisition costs are expensed when
incurred and asset valuation, and interest maintenance reserves are required to be held. Life insurance reserves are
calculated based upon different assumptions and the recognition of deferred tax assets is based on different recoverability
assumptions.
Shareholders’ equity of our Bermuda-domiciled insurance subsidiary, Global Atlantic Re Limited, determined pursuant to
statutory accounting rules was approximately $5.1 billion and $4.2 billion as of December 31, 2025 and 2024, respectively.
Bermuda reinsurers file statutory financial statements with the Bermuda Monetary Authority (the "BMA") that may differ
from U.S. GAAP. For example, Bermuda statutory surplus differs from U.S. GAAP primarily due to a modification that permits
our Bermuda insurance subsidiary to not measure the embedded derivative included within certain funds withheld
coinsurance agreements at fair value.
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26. SUBSEQUENT EVENTS
A dividend of $0.185 per share of common stock of KKR & Co. Inc. has been declared and was announced on February 5,
2026. This dividend will be paid on March 3, 2026 to common stockholders of record as of the close of business on February
17, 2026. Additionally, beginning with the dividend to be announced with the results of the quarter ending March 31, 2026,
KKR intends to increase its regular annualized dividend per share of common stock from $0.74 to $0.78 .
A dividend of $0.78125 per share of Series D Mandatory Convertible Preferred Stock has been declared and was
announced on February 5, 2026 and set aside for payment. This dividend will be paid on March 1, 2026 to holders of record of
Series D Mandatory Convertible Preferred Stock as of the close of business on February 15, 2026.
On February 4, 2026, KKR entered into a definitive agreement to acquire 100 % of Arctos Partners, LP (“Arctos”), an
investment firm that provides strategic growth capital and liquidity solutions to sports franchises and to private investment
fund sponsors. The closing of the acquisition is subject to the satisfaction of regulatory and specified sports approvals as well
as other customary conditions. Subject to the closing, KKR agreed to pay (i) $1.4 billion in initial consideration for the seller's
equity interests in Arctos, consisting of cash and equity securities of KKR, and (ii) up to $550 million of additional equity
securities based on KKR share price and Arctos business-specific performance targets. The number of shares or units issuable
in connection with the initial equity consideration of $1.1 billion will be calculated using $130.62 per share of common stock
of KKR & Co. Inc.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) that are designed to ensure that the information required to be disclosed by us in the reports filed or submitted
by us under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's
rules and forms and such information is accumulated and communicated to management, including the Co-Chief Executive
Officers and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Any controls
and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired
control objectives.
We carried out an evaluation, under the supervision and with the participation of our management, including the Co-
Chief Executive Officers and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures as of December 31, 2025. Based upon that evaluation, our Co-Chief Executive Officers and Chief
Financial Officer have concluded that, as of December 31, 2025, our disclosure controls and procedures were effective to
accomplish their objectives at the reasonable assurance level.
Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) is a process
designed by, or under the supervision of, a company's principal executive and principal financial officers and effected by the
Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:
•Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the company;
•Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and
•Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company's assets that could have a material effect on the financial statements.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In
making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control—Integrated Framework that was issued in 2013. Based on its assessment,
our management has concluded that, as of December 31, 2025, our internal control over financial reporting is effective.
Changes in Internal Control Over Financial Reporting
No changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act)
occurred during the fourth quarter of 2025 that materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Attestation Report of the Independent Registered Public Accounting Firm
Deloitte & Touche LLP, our independent registered public accounting firm that audited our consolidated financial
statements included in this report, has issued its attestation report on our internal control over financial reporting, which is
included in Financial Statements and Supplementary Data.
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ITEM 9B. OTHER INFORMATION
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Directors and Executive Officers
The following table presents certain information concerning our Board of Directors and executive officers.
Name | Age | Position(s) | ||
Henry R. Kravis | 82 | Co-Executive Chairman and Director | ||
George R. Roberts | 82 | Co-Executive Chairman and Director | ||
Joseph Y. Bae | 54 | Co-Chief Executive Officer and Director | ||
Scott C. Nuttall | 53 | Co-Chief Executive Officer and Director | ||
Craig Arnold | 65 | Director | ||
Timothy R. Barakett | 60 | Director | ||
Adriane M. Brown | 67 | Director | ||
Matthew R. Cohler | 48 | Director | ||
Mary N. Dillon | 64 | Director | ||
Arturo Gutiérrez Hernández | 59 | Director | ||
Xavier B. Niel | 58 | Director | ||
Kimberly A. Ross | 60 | Director | ||
Patricia F. Russo | 73 | Director | ||
Robert W. Scully | 76 | Director | ||
Evan T. Spiegel | 35 | Director | ||
Robert H. Lewin | 46 | Chief Financial Officer | ||
Dane E. Holmes | 55 | Chief Administrative Officer | ||
Kathryn K. Sudol | 51 | Chief Legal Officer and General Counsel |
Henry R. Kravis co-founded KKR in 1976 and serves as our Co-Executive Chairman. Mr. Kravis was our Co-Chief Executive
Officer until 2021 and is actively involved in managing the firm. Mr. Kravis currently serves on the boards of Axel Springer and
Catalio Capital Management, LP. He also serves as a director, chairman emeritus, trustee or executive committee member of
several cultural, professional, and educational institutions, including The Business Council (former chairman), Claremont
McKenna College, Columbia Business School (former co-chairman), Mount Sinai Hospital, the Partnership for New York City
(former chairman), the Partnership Fund for New York City (founding chairman), Rockefeller University (former vice
chairman), and Sponsors for Educational Opportunity (chairman). He earned a B.A. from Claremont McKenna College in 1967
and an M.B.A. from the Columbia Business School in 1969. Mr. Kravis has five decades of experience financing, analyzing, and
investing in public and private companies, as well as serving on the boards of a number of KKR portfolio companies. As our Co-
Founder, Co-Executive Chairman and former Co-Chief Executive Officer, Mr. Kravis has an intimate knowledge of KKR's
business, which allows him to provide insight into various aspects of our business and is of significant value to our Board of
Directors. Mr. Kravis and Mr. Roberts are first cousins.
George R. Roberts co-founded KKR in 1976 and serves as our Co-Executive Chairman. Mr. Roberts was our Co-Chief
Executive Officer until 2021 and is actively involved in managing the firm. Mr. Roberts has served as a director or trustee of
several cultural and educational institutions, including Claremont McKenna College. He is also Founder and Chairman of the
board of directors of REDF, a San Francisco nonprofit organization. He earned a B.A. from Claremont McKenna College in 1966
and a J.D. from the University of California (Hastings) Law School in 1969. Mr. Roberts has five decades of experience
financing, analyzing, and investing in public and private companies, as well as serving on the boards of a number of KKR
portfolio companies. As our Co-Founder, Co-Executive Chairman and former Co-Chief Executive Officer, Mr. Roberts has an
intimate knowledge of KKR's business, which allows him to provide insight into various aspects of our business and is of
significant value to our Board of Directors. Mr. Roberts and Mr. Kravis are first cousins.
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Joseph Y. Bae joined KKR in 1996 and is our Co-Chief Executive Officer. Prior to his current position, he served as our Co-
President and Co-Chief Operating Officer from 2017 to 2021, and he has been a member of our Board of Directors since July
2017. Mr. Bae has held numerous leadership roles at KKR. He was the architect of KKR’s expansion in Asia, building one of the
largest and most successful platforms in the market. In addition to his role developing KKR’s Asia-Pacific platform, he has
presided over business building in the firm’s private markets businesses, which included leading or serving on all of the
investment committees and implementing the firm’s modern thematic investment approach. He is active in a number of non-
profit educational and cultural institutions, including co-founding and serving on the board of The Asian American Foundation,
as a member of Harvard University’s Global Advisory Council, and as a member of the Harvard Corporation. Mr. Bae’s intimate
knowledge of KKR’s business and operations and his experience in a variety of senior leadership roles within KKR provide
significant value to our Board of Directors.
Scott C. Nuttall joined KKR in 1996 and is our Co-Chief Executive Officer. Prior to his current position, he served as our Co-
President and Co-Chief Operating Officer from 2017 to 2021, and he has been a member of our Board of Directors since July
2017. Mr. Nuttall has had numerous leadership roles at KKR. He was the architect of the firm’s major strategic development
initiatives, including leading KKR’s public listing, developing the firm’s balance sheet strategy, overseeing the development of
KKR’s Public Markets businesses in the credit and hedge fund space as well as the creation of the firm’s capital markets,
capital raising, and insurance businesses. Mr. Nuttall serves on KKR’s Balance Sheet Committee. He was a member of the
board of directors of Fiserv, Inc. until 2022. He has also served on the boards of various non-profit institutions with a
particular focus on education, most recently as Co-Chairman of Teach for America – New York. Mr. Nuttall's intimate
knowledge of KKR's business and operations and his experience in a variety of senior leadership roles within KKR provide
significant value to our Board of Directors.
Craig Arnold has been a member of our Board of Directors since September 2025. Mr. Arnold is the former Chairman of
the Board and Chief Executive Officer of Eaton Corporation, a global intelligent power management company. Prior to
becoming Chairman and Chief Executive Officer in 2016 (a position he held until May 2025), Mr. Arnold served as the
President and Chief Operating Officer of Eaton Corporation. Prior to that, Mr. Arnold served as Vice Chairman and Chief
Operating Officer of Eaton Corporation’s Industrial Sector from 2009 to 2015. Mr. Arnold previously worked for General
Electric Company, where he held roles across the Appliances, Plastics and Lighting businesses. He currently is a member of the
Boards of Directors of Medtronic, where he serves as the lead independent director, Honeywell, Procter & Gamble, the
United Way of Greater Cleveland and the Salvation Army of Greater Cleveland. He graduated from California State University,
San Bernardino with a bachelor’s degree, and obtained a Master of Business Administration from Pepperdine University. Mr.
Arnold brings significant value to our Board of Directors from his extensive leadership, strategy and risk management
experience from his years of leadership at large multinational companies and possesses strong corporate governance acumen
and financial oversight skills from service on multiple public company boards of directors.
Timothy R. Barakett has been a member of our Board of Directors since March 2025. Mr. Barakett is the Founder and
Chief Executive Officer of TRB Advisors, a private investment firm and family office. TRB invests directly in public and private
markets and provides capital and strategic support to a number of investment firms. Prior to founding TRB in 2010, Mr.
Barakett was the Founder and Chief Executive Officer of Atticus Capital, a global investment management firm. Before
founding Atticus in 1995, Mr. Barakett was a Managing Director at Junction Advisors, an investment management company
specializing in risk arbitrage, and earlier in his career, he was a Senior Associate at Battery Ventures, a venture capital firm.
Mr. Barakett is the Treasurer of Harvard University, a Fellow of the Harvard Corporation, and the Chair of the Board of the
Harvard Management Company, which manages Harvard University's endowment. He also serves on the boards of directors
of Athletic Brewing Company and Rethink Food NYC and the Advisory Boards of Commodore Capital, Forward Consumer
Partners, and Charter Oak Advisors. Mr. Barakett's extensive leadership and financial experience in the investment
management industry and with a large university provides our Board of Directors with significant financial, risk management,
and unique industry insight expertise.
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Adriane M. Brown has been a member of our Board of Directors since June 2021. Ms. Brown joined Flying Fish Ventures
as a Venture Partner in November 2018 and became a Managing Partner of the venture capital firm in February 2021. Prior to
that, Ms. Brown served as President and Chief Operating Officer for Intellectual Ventures, an invention and investment
company, from January 2010 through July 2017, and served as a Senior Advisor until December 2018. Before joining
Intellectual Ventures, Ms. Brown served as President and Chief Executive Officer of Honeywell Transportation Systems. Over
the course of 10 years at Honeywell, she held leadership positions serving the aerospace and automotive markets globally.
Prior to Honeywell, Ms. Brown spent 19 years at Corning, Inc., ultimately serving as Vice President and General Manager,
Environmental Products Division, having started her career there as a shift supervisor. Ms. Brown serves on the boards of
directors of American Airlines Group Inc., Axon Enterprise, Inc., eBay Inc., and the International Women's Forum. Ms. Brown
previously served on the boards of directors of Allergan Plc and Raytheon Company until 2020. Ms. Brown holds a Doctorate
of Humane Letters and a bachelor’s degree in environmental health from Old Dominion University, and is a winner of its
Distinguished Alumni Award. She also holds a master’s degree in management from the Massachusetts Institute of
Technology where she was a Sloan Fellow. Ms. Brown’s leadership in technology businesses and industrial companies as well
as her investment and financial experience bring important expertise to the oversight and development of our business.
Matthew R. Cohler has been a member of our Board of Directors since December 2021. Mr. Cohler is a former General
Partner at the venture capital firm Benchmark, where for over a decade he led early-stage investments in Internet and
software startup businesses. He currently serves as a director and nominating and governance committee member at Asana,
as a director and audit committee member at 1stDibs and as a director at several privately held companies. Previously he
served as a director, audit committee member, and nominating and governance committee member at Domo, as a director
and audit committee member at Uber and as a director at privately held companies including Duo Security, Instagram and
Tinder. Prior to Benchmark, Mr. Cohler was Vice President at Facebook, where he was the company’s seventh employee, and
Vice President at LinkedIn, where he was part of the company’s founding team. He serves on the board of trustees at
Environmental Defense Fund (Vice Chair), on the board of governors at the San Francisco Symphony (Vice President) and on
the investment committee at the Chan Zuckerberg Initiative and at the Yale Investments Office. He holds a B.A. from Yale
University, cum laude and with distinction in the study of music. Mr. Cohler’s knowledge and experience as a venture
capitalist and director of multiple leading companies in the technology industry bring to our Board of Directors important
insight and perspectives to our business and future development.
Mary N. Dillon has been a member of our Board of Directors since September 2018. From September 2022 to September
2025, Ms. Dillon was the Chief Executive Officer of Foot Locker, Inc. (and President from September 2022 to March 2025) and
a member of its board of directors. From 2013 to 2022, Ms. Dillon served as a member of the board of directors of Ulta
Beauty, Inc., a beauty products retailer, and was its Executive Chair from June 2021 through June 2022 and Chief Executive
Officer from 2013 to June 2021. From 2010 to 2013, she served as President and Chief Executive Officer and member of the
board of directors of United States Cellular Corporation, a provider of wireless telecommunication services. From 2005 to
2010, Ms. Dillon served as Global Chief Marketing Officer and Executive Vice President of McDonald’s Corporation. From 2002
to 2005, Ms. Dillon held several positions of increasing responsibility at PepsiCo Corporation, including as President of the
Quaker Foods division. Ms. Dillon joined the board of directors of Starbucks in January 2016 and served as chair of its
compensation and management development committee, and as a member of the nominating and corporate governance
committee through August 2022. Ms. Dillon is chair of the board of trustees of Save the Children US since 2025 after having
served on the board of trustees from 2016 to 2023. Ms. Dillon provides our Board of Directors with valuable knowledge and
insights she gained through her various senior management and leadership roles, including as the chief executive officer of a
publicly traded company. In addition, with over 40 years of experience in consumer-driven businesses, Ms. Dillon brings to our
Board of Directors her extensive operational and marketing expertise in the retail industry.
Arturo Gutiérrez Hernández has been a member of our Board of Directors since March 2021. Mr. Gutiérrez has served as
the Chief Executive Officer of Arca Continental, one of the largest Coca-Cola bottlers in the world, since January 2019. Mr.
Gutiérrez held several executive positions in the company from 2001 to 2018, including Deputy Chief Executive Officer, Chief
Operating Officer, Head of the Mexico Beverages Division, Executive Vice President of Human Resources, Director of
Corporate Planning and General Counsel. He serves on several boards of industry-related companies and on the board of
Canadian Pacific Kansas City Limited. He also serves on the Coca-Cola Mexico Foundation. Mr. Gutiérrez earned a law degree
from Escuela Libre de Derecho, in Mexico City, and an L.L.M. from Harvard University, as a Fulbright Scholar. Mr. Gutiérrez
provides our Board of Directors with valuable knowledge, perspectives and insights from his leadership of a large
multinational business based in Latin America and from his broad experience in various aspects of the consumer staples,
including operational, financial, business development, and legal areas.
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Xavier B. Niel has been a member of our Board of Directors since March 2018. Mr. Niel is the Founder and Chairman of
the board of Iliad SA, a French telecommunications company that owns the internet provider Free and the low-cost mobile
operator Free Mobile. Mr. Niel also owns majority stakes in telecom operators in various countries. He has been involved in
the data communications, internet, and telecommunications industry since the late 1980s. In 2010, Mr. Niel founded Kima
Ventures SAS, which is an active early-stage investor. In 2013, he created 42, a school that trains computer specialists in
France, and in 2017, he opened Station-F, a startup campus located in Paris. Mr. Niel brings significant value to our Board of
Directors due to his extensive experience as an entrepreneur who founded multiple companies, in addition to his leadership
and technology experience.
Kimberly A. Ross has been a member of the Board of Directors since September 2023. Ms. Ross is a member of the board
of directors of Northrop Grumman Corporation and The Cigna Group. Ms. Ross served as Chief Financial Officer of WeWork
Inc. from March 2020 through October 2020. Ms. Ross served as Senior Vice President and Chief Financial Officer of Baker
Hughes Company, an energy technology company, from September 2014 to July 2017. Before joining Baker Hughes, Ms. Ross
served as Executive Vice President and Chief Financial Officer of Avon Products, Inc., a global manufacturer and marketer of
beauty and related products, from November 2011 until October 2014. Prior to joining Avon, Ms. Ross served as the Executive
Vice President and Chief Financial Officer of Royal Ahold N.V., a food retail company, from 2007 to 2011 and held a variety of
senior management positions during her tenure there, which began in 2001. She has previously served as a director of Nestlé
S.A. from 2018 through 2024, KKR Acquisition Holdings I Corp from 2021 through 2022, and Chubb Limited from 2014 through
2020. Ms. Ross has significant international business experience through her service as an executive of large public companies
with international operations. Ms. Ross also provides our Board of Directors with valuable knowledge and experience in
corporate finance, financial planning and analysis, strategy, mergers and acquisitions, corporate restructuring, financial
reporting, and internal audit as well as IT operations oversight.
Patricia F. Russo has been a member of our Board of Directors since April 2011. Ms. Russo served as Chief Executive
Officer of Alcatel-Lucent from 2006 to 2008. Prior to the merger of Alcatel and Lucent in 2006, she served as Chairman of
Lucent Technologies, Inc. from 2003 to 2006, and as President and Chief Executive Officer from 2002 to 2006. Before rejoining
Lucent in 2002, Ms. Russo was President and Chief Operating Officer of Eastman Kodak Company from March 2001 to
December 2001. She has served as the Chairman of Hewlett Packard Enterprise Company since 2015, as a director of Merck &
Co., Inc. since 2009 and as a director of General Motors Company since 2009, including as lead independent director from
March 2010 to January 2014 and again since June 2021. Prior to its merger with Merck in 2009, Ms. Russo served as a director
of Schering-Plough since 1995, and she served as a director of Hewlett Packard Company from 2011 to November 2015. From
November 2016 to May 2018, Ms. Russo also served on the board of Arconic Inc., which separated from Alcoa Inc., where Ms.
Russo served as a director from 2008 to November 2016. She graduated from Georgetown University with a bachelor’s degree
in political science and history, and obtained an Advanced Management Degree from Harvard Business School’s Advanced
Management Program. Ms. Russo's management and leadership experience as chief executive officer of complex global
companies as well as her experience with corporate strategy, mergers and acquisitions, and sales and marketing brings to our
Board of Directors important expertise to the oversight and development of our business. Ms. Russo also brings extensive
experience in corporate governance as a member of boards and board committees of other public companies.
Robert W. Scully has been a member of our Board of Directors since July 2010. Mr. Scully was a member of the Office of
the Chairman of Morgan Stanley from 2007 until his retirement in 2009, where he had previously been Co-President of the
firm, Chairman of global capital markets and Vice Chairman of investment banking. Prior to joining Morgan Stanley in 1996, he
served as a Managing Director at Lehman Brothers and at Salomon Brothers. Mr. Scully has served as a director of Chubb
Limited since January 2016, and prior to its acquisition of Chubb Limited, a director of ACE Limited from May 2014 to January
2016. Previously, he was a director of Zoetis Inc. from June 2013 to May 2025, a director of UBS Group AG from May 2016 to
April 2020, a director of Bank of America Corporation from August 2009 to May 2013 and a public governor of the Financial
Industry Regulatory Authority, Inc. from October 2014 to May 2016. He has also served as a director of GMAC Financial
Services and MSCI Inc. He holds an A.B. from Princeton University and an M.B.A. from Harvard Business School. Mr. Scully is a
member of the Nassau Hall Society at Princeton University. Mr. Scully previously was Chair and Co-Chair of Teach for America,
New York, and he previously served on the Board of Teach For All and the Board of Dean’s Advisors of Harvard Business
School. Mr. Scully's 35-year career in the financial services industry brings to our Board of Directors important expertise to the
oversight of our business. In addition, his leadership experience with a global financial services company brings an industry
perspective to our business development within and outside the United States as well as issues such as talent development,
senior client relationship management, strategic initiatives, risk management and audit, and financial reporting.
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Evan T. Spiegel has been a member of our Board of Directors since October 2021. Mr. Spiegel is the Co-Founder of Snap
Inc., a publicly traded technology company that believes the camera represents the greatest opportunity to improve the way
that people live and communicate, and has served as its Chief Executive Officer and a member of its board of directors since
2012. In 2017, Mr. Spiegel formed the Spiegel Family Fund, a non-profit humanitarian organization which supports
organizations across the arts, education, housing and human rights. Mr. Spiegel currently serves on the boards of directors of
Snap Inc. and the Berggruen Institute. Mr. Spiegel holds a bachelor’s degree in Engineering, Product Design from Stanford
University. Mr. Spiegel’s experience as a co-founder and executive of a leading company in technology services brings to our
Board of Directors important insight and perspectives to our business and future development.
Robert H. Lewin joined KKR in 2004 and is our Chief Financial Officer. Since joining KKR, Mr. Lewin has held a number of
positions, including as an investor in private equity, co-leading the firm’s credit and capital markets businesses, serving as
Treasurer and Head of Corporate Development and Head of Human Capital & Strategic Talent. From 2006 through 2010, Mr.
Lewin resided in Hong Kong, helping to launch KKR’s Asia business. Mr. Lewin has a Bachelor of Science from the University of
Pennsylvania. He currently serves on the board of two non-profit organizations: Answer the Call and Ethical Culture Fieldston
School.
Dane E. Holmes joined KKR as Chief Administrative Officer in 2023. Prior to becoming the Chief Administrative Officer,
Mr. Holmes was a member of our Board of Directors from March 2021 to December 2023. Mr. Holmes was previously the
Chairman and Chief Executive Officer of Eskalera, Inc., from 2020 to 2023, an enterprise software company he co-founded.
Prior to Eskalera, Mr. Holmes was the Global Head of Human Capital Management at Goldman Sachs from 2017 to 2019 and
served as a member of the firm’s management committee. He held many positions at Goldman Sachs from 2001 to 2017,
including global head of investor relations, and Mr. Holmes served on a variety of committees, including its risk committee,
client and business standards committee, and global diversity committee. Mr. Holmes serves on several non-profit boards and
is currently the chair of StoryCorps and the former chair and current board member of The Ron Brown Scholar Program. Mr.
Holmes earned a B.A. from Columbia University.
Kathryn K. Sudol joined KKR in 2022 and is our Chief Legal Officer and General Counsel. Prior to her current position, she
served as KKR's General Counsel from September 2022 through March 2023 and its Secretary from September 2022 through
June 2023. Prior to joining KKR, Ms. Sudol was a partner with Simpson Thacher & Bartlett LLP for 24 years where she held
numerous leadership roles, including as Global Co-Head of Mergers & Acquisitions, a long-time member of the firm’s
Executive Committee and head of the firm’s M&A practice in Asia from 2010 through 2018. Ms. Sudol currently serves as a
member of the Board of Trustees of New York University School of Law and as a member of the Northwestern University
School of Communication Board of Advisors. She earned a B.S., with honors, from Northwestern University and a J.D. from
New York University School of Law.
Independence and Composition of the Board of Directors
Our Board of Directors consists of fifteen directors, eleven of whom, Messrs. Arnold, Barakett, Cohler, Gutiérrez, Niel,
Scully, and Spiegel and Mses. Brown, Dillon, Ross, and Russo, are independent under NYSE rules relating to corporate
governance matters and the independence standards described in our corporate governance guidelines.
Because the Series I preferred stockholder has more than 50% of the voting power for the election of our directors, we
are a "controlled company" within the meaning of the corporate governance standards of the NYSE. Under these standards, a
"controlled company" may elect not to comply with certain corporate governance standards, including the requirements (1)
that a majority of its board of directors consist of independent directors, (2) that its board of directors have a compensation
committee that is comprised entirely of independent directors with a written charter addressing the committee's purpose and
responsibilities, and (3) that its board of directors have a nominating and corporate governance committee that is comprised
entirely of independent directors with a written charter addressing the committee's purpose and responsibilities. We
currently utilize the second and third of these exemptions. See "Risk Factors—Risks Related to Our Organizational Structure—
As a "controlled company," we qualify for some exemptions from the corporate governance and other requirements of the
NYSE and are not required to comply with certain provisions of U.S. securities laws." While we are exempt from NYSE rules
relating to board independence, we intend to maintain a board of directors that consists of at least a majority of directors
who are independent under NYSE rules. In the event that we cease to be a "controlled company" and our shares of common
stock continue to be listed on the NYSE, we will be required to comply with these provisions within the applicable transition
periods. In connection with the Reorganization Agreement, at a future date not to be later than December 31, 2026 and
subject to the satisfaction of certain conditions, we expect to no longer be a "controlled company," and thereafter we expect
to comply with all of the then existing NYSE rules regarding corporate governance. For more information, see also "Certain
Relationships and Related Transactions, and Director Independence—Reorganization Agreement."
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In addition, our Board of Directors has considered transactions and relationships between KKR and the companies and
organizations where our non-executive directors are a board member, executive officer or significant owner, including that
one of our non-executive directors (i) indirectly owns a minority interest with joint control in a media company in which KKR
investment vehicles own a majority stake, and (ii) indirectly owns a controlling interest in a company which has entered into
commercial transactions and agreements with a telecommunications company in which KKR investment vehicles own a
significant minority stake. It was determined that none of these transactions or relationships adversely impacted the
independence of any of our non-executive directors.
We seek to enhance the diversity of our Board of Directors to encompass a broad range of expertise, experience and
backgrounds. We believe that a diverse board of directors can strengthen the board’s effectiveness in fulfilling its oversight
role. Our Board of Directors is comprised of experienced leaders with expertise in finance, investments, corporate strategy
and management, supported by public company and CEO-level leadership perspectives and complemented by global, risk,
governance, technology, and human capital capabilities that together enable effective oversight of KKR. Among our fifteen
directors on our Board of Directors, four of our directors have self-identified as women, and four of our directors have self-
identified as non-white.
Board Committees
Our Board of Directors has five standing committees: an Audit Committee, a Risk Committee, a Conflicts Committee, a
Nominating and Corporate Governance Committee, and an Executive Committee. Because we are a "controlled company,"
our Board of Directors is not required by NYSE rules to establish a Compensation Committee or a Nominating and Corporate
Governance Committee or to meet certain other substantive NYSE corporate governance requirements until the
consummation of all the transactions contemplated by the Reorganization Agreement. For more information about the
transactions contemplated by the Reorganization Agreement, see "Certain Relationships and Related Transactions, and
Director Independence—Reorganization Agreement." While the Board of Directors has established a Nominating and
Corporate Governance Committee, we currently rely on available exemptions concerning the committee's composition and
mandate.
Audit Committee
The Audit Committee consists of Messrs. Scully (Chair), Arnold, and Cohler and Mses. Ross and Russo. The purpose of the
Audit Committee is to provide assistance to the Board of Directors in fulfilling its responsibility with respect to its oversight of:
(i) the quality and integrity of our financial statements, including investment valuations; (ii) our compliance with legal and
regulatory requirements; (iii) our independent registered public accounting firm's qualifications, independence and
performance; and (iv) the performance of our internal audit function. The members of the Audit Committee meet the
independence standards and financial literacy requirements for service on an Audit Committee of a Board of Directors
pursuant to the Exchange Act and NYSE rules applicable to audit committees. Our Board of Directors has determined that
each of Messrs. Scully, Arnold, and Cohler and Mses. Ross and Russo is an "audit committee financial expert" within the
meaning of Item 407(d)(5) of Regulation S-K. The Audit Committee has a charter, which is available on our website at
ir.kkr.com under the corporate governance page for our stockholders at the "Sustainability & Corporate Governance" section.
Risk Committee
The Risk Committee consists of Mr. Cohler (Chair) and Mses. Brown and Dillon. The purpose of the Risk Committee is to
provide assistance to the Board of Directors with respect to its oversight of KKR’s levels of risk, risk assessment and risk
management, and its oversight of KKR’s overall risk management framework, including monitoring KKR’s reporting systems for
compliance with legal and regulatory requirements.
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Conflicts Committee
The Conflicts Committee consists of Messrs. Scully (Chair) and Gutierrez and Mses. Dillon and Russo. The Conflicts
Committee is responsible for reviewing specific matters that the Board of Directors believes may involve a conflict of interest
and for enforcing our rights against the Series I stockholder, former partners of KKR Holdings or current and former partners
of Associates Holdings under our certificate of incorporation, our bylaws, and certain agreements designated as "covered
agreements", which include the Reorganization Agreement and the amended and restated limited partnership agreement of
KKR Group Partnership. The Conflicts Committee is also authorized to take any action pursuant to any authority or rights
granted to such committee under any covered agreement or with respect to any amendment, supplement, modification, or
waiver to any such agreement that would purport to modify such authority or rights. In addition, the Conflicts Committee is
required to approve any amendment to any of the covered agreements that in the reasonable judgment of our Board of
Directors is, or will result in, a conflict of interest. The Conflicts Committee is authorized to determine if the resolution of any
conflict of interest submitted to it is fair and reasonable to us. The Conflicts Committee may review and approve any related
person transactions, other than those that are approved pursuant to our related person policy, as described under "Certain
Relationships and Related Transactions, and Director Independence—Statement of Policy Regarding Transactions with
Related Persons," and may establish guidelines or rules to cover specific categories of transactions. The members of the
Conflicts Committee meet the independence standards under our corporate governance guidelines as required for service on
the committee in accordance with its charter.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee consists of Messrs. Kravis (Co-Chair), Roberts (Co-Chair), and
Scully. The Nominating and Corporate Governance Committee is responsible for identifying and recommending candidates for
appointment to the Board of Directors and for assisting and advising the Board of Directors with respect to matters relating to
the general operation of the Board of Directors and corporate governance matters. Mr. Scully meets the independence
standards under the rules of the NYSE as required for service on the Nominating and Corporate Governance Committee in
accordance with its charter.
Executive Committee
The Executive Committee consists of Messrs. Kravis and Roberts. The purpose of the Executive Committee is to act, when
necessary, in place of the full Board of Directors during periods in which the Board of Directors is not in session or with
respect to matters delegated to the committee, which includes oversight of our Equity Plans. The Executive Committee is
authorized and empowered to act as if it were the full Board of Directors in overseeing our business and affairs, except that it
is not authorized or empowered to take actions that have been specifically delegated to other board committees or to take
actions with respect to: (i) the declaration of dividends on our common stock; (ii) a merger or consolidation of us with or into
another entity; (iii) a sale, lease or exchange of all or substantially all of our assets; (iv) a liquidation or dissolution of us; (v)
any action that must be submitted to a vote of the Series I preferred stockholder or our stockholders; or (vi) any action that
may not be delegated to a board committee under our certificate of incorporation, our bylaws or the DGCL.
Code of Business Conduct and Ethics
We have a Code of Business Conduct and Ethics that applies to our directors, officers and employees, and is available on
our website at ir.kkr.com under the corporate governance page for our stockholders at the "Sustainability & Corporate
Governance" section. In accordance with, and to the extent required by the rules and regulations of the SEC, we intend to
disclose any amendment to or waiver of the Code of Business Conduct and Ethics on behalf of an executive officer or director
either on our website or in a Current Report on Form 8-K filing.
Insider Trading Arrangements and Policies
We have adopted a trading window policy (the "Policies and Procedures for Trading in Securities of KKR & Co. Inc. by
Directors, Section 16 Officers") that governs the purchase and sale of KKR securities by our directors, officers, employees, and
certain other individuals. This policy is designed to reasonably promote compliance by these persons with U.S. securities laws
governing insider trading, which, among other things, (1) specifies quarterly trading windows outside of which such persons
are generally prohibited from trading in covered securities, subject to exceptions including using pre-approved trading plans
that meet the requirements of Rule 10b5-1 under the Exchange Act and (2) generally prohibits the use of derivative
transactions with respect to KKR securities and from engaging in short-selling to hedge their economic risk of ownership in
KKR securities. Our trading window policy that governs the purchase and sale of KKR securities is filed as Exhibit 19.1 to this
report.
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Corporate Governance Guidelines
Our Board of Directors has a governance policy, which addresses matters such as the Board of Directors' responsibilities
and duties, the Board of Directors' composition and compensation and director independence. The governance guidelines are
available on our website at ir.kkr.com under the corporate governance page for our stockholders at the "Sustainability &
Corporate Governance" section.
Communications to the Board of Directors
The non-executive members of our Board of Directors meet regularly. At each meeting of the non-executive members,
the non-executive directors choose a director to lead the meeting. All interested parties, including any employee or
stockholder, may send communications to the non-executive members of our Board of Directors by writing to: KKR & Co. Inc.,
Attn: Corporate Secretary; 30 Hudson Yards, New York, New York 10001.
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ITEM 11. EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation Philosophy
Our compensation program generally has three primary objectives: (1) to attract, motivate, and retain our employees, (2)
to align the interests of our employees with the interests of our stockholders and other stakeholders, and (3) to reinforce our
culture and values.
Our employees. Our business depends on the services of our employees. We depend on their ability, among other
things, to source and execute transactions, to raise capital and develop client relationships, and to operate our various
businesses, and their contributions are key to our success. Therefore, it is important that our employees are compensated in a
manner that we believe motivates them to excel consistently and encourages them to remain with the firm.
Alignment of interests. Equity ownership in the businesses in which we invest has been a guiding principle throughout
our firm's history, and we apply that principle to ourselves: nearly all employees of the firm are awarded equity in KKR. This
equity ownership serves to align the interests of our employees with those of our stockholders. In addition, because we invest
in and alongside our investment vehicles and have a carry pool from which we allocate to our employees a portion of the
carried interest that we generate through our investments, we believe that our employees' interests are also aligned with
those of our investors in the vehicles that we manage, which in turn benefits our stockholders.
Culture and values. One of our most important values for our employees is our "one firm" approach with shared
responsibility and success, and we also subscribe to a culture of meritocracy and fairness. Therefore, our compensation
program is based on the performance of the firm as a whole as well as on an individual's contributions to the firm. We
generally do not compensate our employees based solely on an individual's accomplishments in relation to the profits and
losses of his or her business unit. In addition, we conduct an annual evaluation process based on input from a wide range of
stakeholders regarding each employee's contribution to the firm, including his or her commitment to the firm's culture and
values. We believe that using this kind of evaluation process also promotes a measure of objectivity as a balance to a single
manager's judgment.
Named Executive Officers. Our "named executive officers" for the year ended December 31, 2025 are our two Co-
Executive Chairmen (Henry Kravis and George Roberts), our two Co-Chief Executive Officers (Joseph Bae and Scott Nuttall),
our Chief Financial Officer (Robert Lewin), and our Chief Legal Officer and General Counsel (Kathryn Sudol).
We are neither required to conduct say-on-pay or say-on-frequency votes nor to provide disclosures relating to pay-
versus-performance under the Dodd-Frank Act until after the Sunset Date.
Compensation Elements
Base Salary
For 2025, our named executive officers were each paid an annual salary of $300,000. We believe that the base salary of
our named executive officers should typically not be the most significant component of total compensation. Our Co-Executive
Chairmen determined that $300,000 is a sufficient minimum base salary for our named executive officers.
Year-End Bonus Compensation
Our named executive officers did not receive any discretionary year-end cash bonus compensation in 2025, based on the
overall values received by them during the year, including their allocations of carried interest.
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Incentive Equity Awards
From time to time, we may grant equity awards consisting of restricted holdings units from our 2019 Equity Incentive
Plan. Restricted holdings units are equity awards issued that provide the recipient with the right to exchange them on a one-
for-one basis for our common stock after vesting and subject to satisfying certain other conditions. The overall objectives of
these grants are principally to incentivize our most senior employees, to align their interests with those of our stockholders,
and to retain them by providing meaningful long-term economic incentives. KKR currently intends that no additional equity
incentive awards will be granted to Messrs. Bae and Nuttall during the five years following the grants they received in
December 2021. Although we did not grant any year-end equity awards to our executive officers in 2025, we may make such
equity grants in the future. See also “—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based
Awards Table”.
Carried Interest
Our named executive officers are eligible for allocations of carried interest from our carry pool. KKR allocates up to 80%
of the carried interest that KKR earns from its investment vehicles that generate carried interest to the carry pool. Until the
Sunset Date, our Co-Founders are authorized to determine the amounts of carried interest allocable to individuals from the
carry pool, provided that any allocation of carried interest to themselves will be on a percentage basis consistent with past
practice. On the Sunset Date, KKR will acquire control of the carry pool and will be entitled to determine the allocations of
carried interest. For more information about transactions occurring on the Sunset Date, see “Certain Relationships and
Related Transactions, and Director Independence—Reorganization Agreement”.
In 2025, our Co-Founders allocated an amount of carried interest to themselves on a percentage basis consistent with
past practice. With respect to carried interest allocations for each other named executive officer in 2025, our Co-Founders
took into consideration each officer’s performance and contributions to the firm, including in terms of driving commercial
results for the firm, leading and managing people, and living the firm's values, as well as the recommendations by our Co-
Chief Executive Officers with respect to the performance and contributions to the firm of our Chief Financial Officer and Chief
Legal Officer and General Counsel, which included managing our business growth and our key risks.
Certain carried interest allocations are made and distributed in a year based on the investment proceeds generated by
our funds during the year. These distributions of carried interest may be made in cash or in-kind and are not subject to
vesting.
In addition, other carried interest allocations are made by determining a total dollar value for each named executive
officer's interest in the carry pool, based on the total amount of investments made by our investment vehicles during the
year. These carried interest allocations represent an entitlement to future realizations of carried interest, if any, which may
be distributed in cash or in-kind, and are generally subject to four-year service-based vesting. Vesting serves as an
employment retention mechanism and enhances the alignment of interests between our employees who participate in our
carry pool and the firm as well as the investors in our investment vehicles. Vesting is subject to certain exceptions, including
additional vesting upon death, disability or retirement. Due to our Co-Executive Chairmen's status as Co-Founders of our firm,
our Co-Founders are completely vested in their carried interest allocations upon grant.
Other Compensation
Our Co-Executive Chairmen are reimbursed by us for the use of a car and driver, and we pay for certain other
miscellaneous benefits for them, including the compensation of certain personnel who administer personal matters for them.
We believe that these benefits are appropriate in light of the time that they spend on our business, the limited compensation
paid by us for their services and their unique status as Co-Founders of our firm. In addition, we reimburse certain executive
officers for personal security services as well as for programs that are generally available to other senior employees, including
charitable donation matching, tax preparation, and financial planning services.
Minimum Retained Ownership and Transfer Restrictions
While employed by us, unless waived in whole or in part by the firm, each of our named executive officers has a minimum
retained ownership requirement obligating them to continue to hold at least 25% of the cumulative amount of equity awards
that have satisfied the vesting conditions during the duration of his or her employment with the firm. Upon vesting, equity
awards are also subject to additional restrictions, including transfer restrictions, which typically last for (1) one year with
respect to one-half of the units vesting on such vesting date and (2) two years with respect to the other one-half of the units
vesting on such vesting date.
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Compensation and Risk
Our compensation program includes elements that we believe discourage excessive risk-taking and align the
compensation of our employees with the long-term performance of the firm. For example, certain elements of our
compensation program, like a discretionary year-end bonus, are determined at year-end and are discretionary based on the
considerations described above. In addition, a significant majority of the equity awards granted to our employees are subject
to multi-year vesting conditions, one- and two-year post-vesting transfer restriction periods and a minimum retained
ownership requirement, in addition to being subject to forfeiture in connection with the breach of certain restrictive covenant
obligations and terminations of employment with or without cause. Because our equity awards typically have multi-year
vesting provisions and, for our most senior employees, vesting conditions based on the market price of our common stock,
the actual amount of compensation realized by the recipient is tied to the long-term performance of our common stock.
Pursuant to our internal policies, without the prior authorization of our Chief Legal Officer and General Counsel, our
employees are not permitted to buy or sell derivative securities, including for hedging purposes, or to engage in short-selling
to hedge their economic risk of ownership.
We only make cash payments of carried interest to our employees when profitable investments have been realized and
after sufficient cash has been distributed to the investors in our investment vehicles. Carried interest allocable to our
employees from the carry pool is only distributed after all of the following criteria are met: (i) a realization event has occurred
(e.g., sale of an investment, receipt of a dividend, etc.); (ii) the investment vehicle has achieved positive overall investment
returns since its inception, in excess of performance hurdles where applicable, and is accruing carried interest; and (iii) with
respect to any investment with a fair value below cost, cost has been returned to investors in an amount sufficient to reduce
remaining cost to the investment's fair value. In addition, certain carried interest allocations to our employees are subject to
multi-year vesting conditions and are subject to forfeiture in connection with the breach of certain restrictive covenant
obligations and terminations of employment with or without cause. Because of multi-year vesting and clawback provisions
applicable to certain carried interest allocations and the fact that the distribution of carried interest is directly tied to the
realized performance of the underlying investments, we believe this fosters a strong alignment of interests among the
investors in those vehicles and our employees, which also benefits our stockholders.
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2025 Summary Compensation Table
The following table presents summary information concerning compensation that was paid for services rendered by our
named executive officers during the fiscal years ended December 31, 2023, 2024, and 2025.
In 2023, 2024, and 2025, our named executive officers received dividends on shares of common stock and distributions
on vested restricted holdings units they hold. Because these dividends and distributions are not considered to be
compensation, they are not reflected as compensation in the table below.
Carried interest distributions to our named executive officers for the years ended December 31, 2023, 2024, and 2025 are
reflected in the All Other Compensation column in the table below. In each of 2023, 2024, and 2025, our Co-Chief Executive
Officers were allocated total dollar values of carried interest that were identical to each other; the different amounts set forth
below are due to historically different allocations of carried interest in respect of fund investments that generated investment
proceeds in each respective year.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1) | All Other Compensation ($) (2) | Total ($) | |||||||
Henry R. Kravis | 2025 | 300,000 | — | — | 62,267,217 | (3) | 62,567,217 | ||||||
Co-Executive Chairman | 2024 | 300,000 | — | — | 46,354,195 | 46,654,195 | |||||||
2023 | 300,000 | — | — | 34,976,652 | 35,276,652 | ||||||||
George R. Roberts | 2025 | 300,000 | — | — | 63,483,936 | (4) | 63,783,936 | ||||||
Co-Executive Chairman | 2024 | 300,000 | — | — | 44,820,455 | 45,120,455 | |||||||
2023 | 300,000 | — | — | 34,918,579 | 35,218,579 | ||||||||
Joseph Y. Bae | 2025 | 300,000 | — | — | 83,970,205 | (5) | 84,270,205 | ||||||
Co-Chief Executive Officer | 2024 | 300,000 | — | — | 72,787,375 | 73,087,375 | |||||||
2023 | 300,000 | 13,000,000 | — | 36,659,449 | 49,959,449 | ||||||||
Scott C. Nuttall | 2025 | 300,000 | — | — | 80,056,440 | (6) | 80,356,440 | ||||||
Co-Chief Executive Officer | 2024 | 300,000 | — | — | 63,895,805 | 64,195,805 | |||||||
2023 | 300,000 | 13,000,000 | — | 33,807,444 | 47,107,444 | ||||||||
Robert H. Lewin | 2025 | 300,000 | — | — | 15,004,124 | (7) | 15,304,124 | ||||||
Chief Financial Officer | 2024 | 300,000 | — | — | 10,358,184 | 10,658,184 | |||||||
2023 | 300,000 | 5,200,000 | 15,975,000 | 4,469,737 | 25,944,737 | ||||||||
Kathryn K. Sudol (8) | 2025 | 300,000 | — | — | 5,484,223 | (9) | 5,784,223 | ||||||
Chief Legal Officer and General Counsel | |||||||||||||
(1) | Stock awards reflected in the table above for each year presented represent the value of the restricted holdings units granted in such reporting period. Fair value of the restricted holdings units granted to our named executive officers are calculated in accordance with Accounting Standards Codification Topic 718, Compensation-Stock Compensation ("ASC Topic 718"). See Note 19 "Equity-Based Compensation" in our consolidated financial statements included elsewhere in this report for additional information about the valuation assumptions with respect to all grants reflected in this column. These amounts reflect the aggregate grant date fair values calculated under ASC Topic 718, and may not correspond to the actual value that will be recognized by our named executive officers. | ||||||||||||
(2) | Carried interest is presented on the basis of cash or in-kind distributions received by our named executive officers in the respective fiscal year. We believe that presenting actual distributions received by our named executive officers is a more representative disclosure of their compensation than presenting allocated or accrued carried interest, because carried interest is paid only if and when there are profitable realization events relating to the underlying investments. Carried interest also includes amounts that are due to a named executive officer, but retained and not yet distributed in order to fund potential future clawback obligations if any were to arise. Any in-kind distributions in respect of carried interest are reported based on the last available reported net asset value of the securities distributed as of the date of distribution. | ||||||||||||
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(3) | Consists of $61,002,910 in cash or in-kind distributions in respect of carried interest during 2025. For 2025, also consists of the following payments made by KKR: $714,590 related to certain personnel who administered personal matters for Mr. Kravis during 2025 (the entire cost of which is reported, because we do not separately track whether their time is spent for business or personal reasons); $25,000 related to financial planning services fees; $15,000 related to tax preparation fees; $50,000 of matching charitable donations; $449,717 related to the cost of a car, driver and other personal security; and up to $10,000 of benefits relating to healthcare costs. KKR also paid certain amounts for the use for KKR business of aircraft owned by an entity controlled by Mr. Kravis as described in “Certain Relationships and Related Party Transactions, Director Independence – Firm Use of Private Aircraft.” From time to time, family members and other personal guests of Mr. Kravis may accompany him on flights or otherwise on business travel, for which KKR incurs no incremental out-of-pocket cost. | ||||||||||||
(4) | Consists of $62,536,126 in cash or in-kind distributions in respect of carried interest during 2025. For 2025, also consists of the following payments made by KKR: $629,436 related to certain personnel who administered personal matters for Mr. Roberts during 2025 (the entire cost of which is reported, because we do not separately track whether their time is spent for business or personal reasons); $25,000 related to financial planning services fees; $15,000 related to tax preparation fees; $50,000 of matching charitable donations; $218,374 related to the cost of a car, driver and other personal security; and up to $10,000 of benefits relating to healthcare costs. KKR also paid certain amounts for the use, for KKR business, of aircraft owned by an entity controlled by Mr. Roberts as described in “Certain Relationships and Related Party Transactions, Director Independence – Firm Use of Private Aircraft.” From time to time, family members and other personal guests of Mr. Roberts may accompany him on flights or otherwise on business travel, for which KKR incurs no incremental out-of-pocket cost. | ||||||||||||
(5) | Consists of $83,286,716 in cash or in-kind distributions in respect of carried interest during 2025. For 2025, also consists of the following payments made by KKR: $25,000 related to financial planning services fees; $15,000 related to tax preparation fees; $50,000 of matching charitable donations; and $593,489 related to the cost of a car, driver and other personal security. From time to time, family members and other personal guests of Mr. Bae may accompany him on flights or otherwise on business travel, for which KKR incurs no incremental out-of-pocket cost. | ||||||||||||
(6) | Consists of $79,691,541 in cash or in-kind distributions in respect of carried interest during 2025. For 2025, also consists of the following payments made by KKR: $25,000 related to financial planning services fees, $15,000 related to tax preparation fees; $50,000 of matching charitable donations; and $274,899 related to the cost of a car, driver and other personal security. KKR also paid certain amounts for the use, for KKR business, of aircraft owned by an entity controlled by Mr. Nuttall as described in “Certain Relationships and Related Party Transactions, Director Independence – Firm Use of Private Aircraft.” From time to time, family members and other personal guests of Mr. Nuttall may accompany him on flights or otherwise on business travel, for which KKR incurs no incremental out-of-pocket cost. | ||||||||||||
(7) | Consists of $14,914,124 in cash or in-kind distributions in respect of carried interest during 2025. For 2025, also consists of the following payments made by KKR: $25,000 related to financial planning services fees; $15,000 related to tax preparation fees; and $50,000 of matching charitable donations. | ||||||||||||
(8) | Ms. Sudol was one of our named executive officers in 2025, and she was not a named executive officer in 2024 or 2023. Therefore, only her compensation information for the fiscal year ended December 31, 2025 is provided in the table. | ||||||||||||
(9) | Consists of $5,394,223 in cash or in-kind distributions in respect of carried interest during 2025. For 2025, also consists of the following payments made by KKR: $25,000 related to financial planning services fees; $15,000 related to tax preparation fees; and $50,000 of matching charitable donations. | ||||||||||||
Grants of Plan-Based Awards in 2025
We made no new grants of plan-based awards to our named executive officers in 2025.
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Terms of Restricted Holdings Units
Restricted holdings units granted under our 2019 Equity Incentive Plan are equity awards, for which the number of shares
of common stock in respect of such equity awards is subject to the overall limitation on the number of shares of common
stock that may be awarded under the 2019 Equity Incentive Plan. The restricted holdings units program was approved by a
committee of independent directors of our Board of Directors in December 2019. KKR's independent directors are ineligible to
receive restricted holdings units.
In general, restricted holdings units are subject to either (i) a service-based vesting condition with vesting in annual
installments over a multi‑year period (generally three to five years) from a specified date, subject to the recipient's continued
employment with us on the applicable vesting dates, subject to exceptions, or (ii) a market price-based vesting condition
where the portion of the units that satisfies stock price target requirements will vest on a scheduled vesting date (generally
five years from the grant date), subject to the recipient's continued employment with us on the scheduled vesting date,
subject to exceptions. Certain restricted holdings units agreements may also contain additional vesting requirements.
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Restricted holdings units provide the holder the ability, after vesting and the satisfaction of certain other conditions, to
exchange them for shares of our common stock on a one-for-one basis (or at the discretion of KKR, cash in an amount equal
to the fair market value of the shares of common stock that would otherwise be deliverable in such exchange). There is no tax
receivable agreement in place for such exchange of restricted holdings units granted under the 2019 Equity Incentive Plan,
and therefore, we will receive 100% of any tax benefits arising from the exchange of restricted holdings units granted under
that plan. Prior to vesting, restricted holdings units are not entitled to any distributions from us. Following vesting, restricted
holdings units become entitled to receive distributions from us. The amount of distribution per vested restricted holdings unit
is equal to the amount distributed on one KKR Group Partnership Unit. To the extent that distributions are made on a KKR
Group Partnership Unit that corresponds to a restricted holdings unit that is not vested, such distribution amount will be
allocated or otherwise applied in a manner we may determine in our discretion. Upon vesting, restricted holdings units are
generally subject to additional restrictions, including transfer restrictions, which typically last for (1) one year with respect to
one-half of the units vesting on such vesting date and (2) two years with respect to the other one-half of the units vesting on
such vesting date, and minimum retained ownership requirements, which obligate the recipients to continuously hold at least
25% of their cumulatively vested restricted holdings units, unless waived. Transfer-restricted units become fully vested and
transferable and may be exchanged into shares of common stock at the end of the transfer restriction period if the holder is
not terminated for cause and has complied with the terms of his or her confidentiality and restrictive covenant agreement
during the transfer restrictions period. See "—Terms of Confidentiality and Restrictive Covenant Agreements" below.
Terms of Confidentiality and Restrictive Covenant Agreements
The confidentiality and restrictive covenant agreements with each of our named executive officers include prohibitions
on them competing with us or soliciting our fund investors, clients or employees while employed by us and during a restricted
period following their departure from the firm. These agreements also have non-disparagement obligations and require our
named executive officers to protect and use the firm's confidential information only in accordance with confidentiality
restrictions set forth in the agreement.
The restricted periods for our Co‑Executive Chairmen expire two years from termination for both the prohibitions on
competition with us and the prohibitions on the solicitation of our fund investors, clients and employees. In cases where a Co-
Executive Chairman is terminated involuntarily and for reasons not constituting cause, such periods are reduced to one year
from termination. The restricted periods for our other named executive officers expire (1) in the case of the prohibitions on
competition with us, 12 months from termination and (2) in the case of the prohibitions on the solicitation of our fund
investors, clients and employees, 15 months from termination. These agreements also require that we, and our Co-Executive
Chairmen and other named executive officers, provide advance notice prior to termination of employment.
Our named executive officers have entered into these confidentiality and restrictive covenant agreements with us
through their restricted holdings unit and carried interest grant agreements.
Outstanding Equity Awards at 2025 Fiscal Year‑End
The following table sets forth information concerning unvested restricted holdings units for each of the named executive
officers as of December 31, 2025.
Stock Awards | |||||
Name | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock that Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |
Henry R. Kravis | — | $— | — | $— | |
George R. Roberts | — | $— | — | $— | |
Joseph Y. Bae | 8,500,000 (2) | $1,083,580,000 | — | $— | |
Scott C. Nuttall | 7,500,000 (3) | $956,100,000 | — | $— | |
Robert H. Lewin | 1,400,000 (4) | $178,472,000 | — | $— | |
Kathryn K. Sudol | 380,000 (5) | $48,442,400 | — | $— | |
(1)These amounts are based on the closing market price of our common stock on the last trading day of the year ended December 31, 2025, which was
$127.48 per share.
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(2)Represents 1,000,000 restricted holdings units granted on February 18, 2021, the vesting of which was subject to the average closing price of our
common stock during 20 consecutive trading days meeting or exceeding certain specified stock price targets ranging from $45.00 to $70.00, all of which
were achieved prior to December 31, 2021. These restricted holdings units will vest on May 1, 2026 if the named executive officer continues to serve as
an employee until that date, subject to certain exceptions. Additionally, represents 7,500,000 restricted holdings units granted on December 9, 2021, the
vesting of which was subject to the average closing price of our common stock during 20 consecutive trading days meeting or exceeding certain specified
stock price targets ranging from $95.80 to $135.80, all of which were achieved prior to December 31, 2024. These restricted holdings units will vest on
December 31, 2026 if the named executive officer continues to serve as an employee until that date, subject to certain exceptions.
(3)Represents 7,500,000 restricted holdings units granted on December 9, 2021, the vesting of which was subject to the average closing price of our
common stock during 20 consecutive trading days meeting or exceeding certain specified stock price targets ranging from $95.80 to $135.80, all of which
were achieved prior to December 31, 2024. These restricted holdings units will vest on December 31, 2026 if the named executive officer continues to
serve as an employee until that date, subject to certain exceptions.
(4)Represents 900,000 restricted holdings units granted on February 18, 2021, the vesting of which was subject to the average closing price of our common
stock during 20 consecutive trading days meeting or exceeding certain specified stock price targets ranging from $45.00 to $70.00, all of which were
achieved prior to December 31, 2021. These restricted holdings units will vest on May 1, 2026 if the named executive officer continues to serve as an
employee until that date, subject to certain exceptions. Additionally, represents 500,000 restricted holdings units granted on August 4, 2023, the vesting
of which was subject to the average closing price of our common stock during 20 consecutive trading days meeting or exceeding certain specified stock
price targets ranging from $95.80 to $135.80, all of which were achieved prior to December 31, 2024. These restricted holdings units will vest on
December 31, 2028 if the named executive officer continues to serve as an employee until that date, subject to certain exceptions.
(5)Represents 80,000 restricted holdings units granted on October 3, 2022, which will vest in two equal annual installments on each of April 1, 2026 and April
1, 2027, subject to the named executive officer’s continued service as an employee on each vesting date. Additionally, represents 200,000 restricted
holdings units granted on October 3, 2022, the vesting of which was subject to the average closing price of our common stock during 20 consecutive
trading days meeting or exceeding certain specified stock price targets ranging from $75.00 to $115.00, all of which were achieved prior to December 31,
2024; these restricted holdings units will vest on April 1, 2027 if the named executive officer continues to serve as an employee until that date, subject to
certain exceptions. Additionally, represents 100,000 restricted holdings units granted on August 4, 2023, the vesting of which was subject to the average
closing price of our common stock during 20 consecutive trading days meeting or exceeding certain specified stock price targets ranging from $95.80 to
$135.80, all of which were achieved prior to December 31, 2024; these restricted holdings units will vest on December 31, 2028 if the named executive
officer continues to serve as an employee until that date, subject to certain exceptions.
Option Exercises and Stock Vested in 2025
The following table sets forth information concerning the vesting of restricted holdings units held by each of our named
executive officers during the year ended December 31, 2025.
Stock Awards | |||||||||||
Name | Number of Shares Acquired on Vesting (#) (1) | Value Realized on Vesting ($) (2) | |||||||||
Henry R. Kravis | — | $— | |||||||||
George R. Roberts | — | $— | |||||||||
Joseph Y. Bae | — | $— | |||||||||
Scott C. Nuttall | — | $— | |||||||||
Robert H. Lewin | — | $— | |||||||||
Kathryn K. Sudol | 40,000 | $4,713,600 | |||||||||
(1)The amounts reflected in this column represent restricted holdings units, a portion of which are subject to one- and two-year transfer restrictions upon
vesting. See "—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table" for additional terms, including with respect
to the transfer of certain restrictions from the restricted stock units to employees' restricted holdings units.
(2)These amounts are based on the closing market price of our common stock on each respective vesting date.
Pension Benefits for 2025
We provided no pension benefits during the fiscal year ended December 31, 2025.
Nonqualified Deferred Compensation for 2025
We provided no defined contribution plan for the deferral of compensation on a basis that is not tax‑qualified during the
fiscal year ended December 31, 2025.
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Potential Payments Upon Termination or Change in Control
Upon termination of employment (other than due to death or permanent disability), vesting generally ceases for
restricted holdings units that have not vested. In addition, transfer-restricted vested restricted holdings units remain subject
to transfer restrictions for one- and two-year periods, except as described below. See "Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters" for additional information regarding the common
stock held by our named executive officers.
In general, a named executive officer who retires after the first date on which his or her age plus years of service to KKR
equals 80 ("qualified retirement") will generally (i) vest in his or her unvested restricted holdings units (for those with service
based vesting conditions) that would otherwise vest within two years following retirement and (ii) vest in a pro rata portion of
his or her unvested and restricted holdings units (for those with market price based vesting conditions) that satisfied the stock
price target requirements at the time of qualified retirement, in each case, subject to compliance, if applicable, with the
requirement that the holder not violate the terms and conditions of his or her confidentiality and restrictive covenants during
the period in which such restricted holdings units, if applicable, remains transfer restricted over the one- and two-year
periods from the original vesting date. However, the additional vesting terms upon a qualified retirement do not apply to the
restricted holdings units awarded to the Co-Chief Executive Officers in December 2021.
Upon death or permanent disability, generally (i) a holder of restricted holdings units with service based vesting
conditions will become vested with respect to service based vesting conditions in all such restricted holdings units and (ii) a
holder of restricted holdings units with market price based conditions will be eligible to vest in a pro rata portion of such
unvested restricted holdings units that satisfied the stock price target requirements at the time of death or permanent
disability based on the number of years of service from the grant date to the time of death or permanent disability. In
addition, upon a change in control of KKR, a holder of restricted holdings units may become immediately vested in all
unvested restricted holdings units. Upon vesting, holders of restricted holdings units are permitted to exchange vested
restricted holdings units into shares of common stock after the applicable transfer restrictions following vesting have lapsed.
The values of unvested restricted holdings units held by the named executive officers as of December 31, 2025 are set forth
above in "—Outstanding Equity Awards at 2025 Fiscal Year-End."
Upon termination of employment, vesting generally ceases for carried interest allocations, a portion of which is subject to
forfeiture for breach of the confidentiality and restrictive covenant agreement, to the extent permitted under applicable law.
In addition, carried interest allocations generally become immediately vested upon death or disability, and certain carried
interest allocations permit additional vesting upon retirement.
Pay Ratio Disclosure
For the fiscal year ended December 31, 2025:
•the median of the annual total compensation of all employees of our company (other than Messrs. Bae and Nuttall,
who were our Co-Chief Executive Officers as of December 31, 2025) was $210,000;
•the annual total compensation of Messrs. Bae and Nuttall was $84,270,205 and $80,356,440, respectively; and
•the ratio of the averaged annual total compensation of our Co-Chief Executive Officers to the median of the annual
total compensation of all other employees was 392 to 1.
To identify the median employee for the purpose of providing the information above, we examined the compensation of
all our current employees (other than our Co-Chief Executive Officers) as of December 31, 2025, using, based on our payroll
records, a consistently applied compensation measure consisting of such employees' annual salary, annual cash bonus, actual
overtime, carried interest payouts, and equity granted. Employees on unpaid leave of absence and employees who were not
part of the regular year-end compensation process are each excluded from the calculation. Compensation of employees who
were employed for less than the full year of 2025 were annualized only if they were part of the regular year-end
compensation process. We reviewed all compensation in U.S. dollars, using the relevant exchange rate for any compensation
paid in other currencies. After identifying the median employee, we calculated annual total compensation for such employee
using the same methodology we use for our principal executive officers as set forth in "—2025 Summary Compensation
Table." As noted in "—Compensation Discussion and Analysis," dividends paid on shares of common stock and distributions
on vested restricted holdings units are not considered compensation and accordingly are not included in the pay ratio
calculation above. The above CEO pay ratio represents a reasonable good faith estimate, calculated in a manner consistent
with SEC rules based on our payroll and employment records and the methodology described above.
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Director Compensation
We pay compensation for service on our Board of Directors only to our independent directors. During 2025, each
independent director received (1) an annual cash retainer of $130,000, (2) an additional annual cash retainer of $15,000 if
such independent director is a member of the nominating and corporate governance committee, (3) an additional annual cash
retainer of $25,000 if such independent director is a member of the audit committee and an additional annual cash retainer of
$25,000 (in addition to the annual cash retainer as a member of the audit committee) if such independent director serves as
the chair of the audit committee, (4) an additional annual cash retainer of $15,000 if such independent director is a member
of the conflicts committee and an additional annual cash retainer of $15,000 (in addition to the annual cash retainer as a
member of the conflicts committee) if such independent director serves as the chair of the conflicts committee, and (5) an
additional annual cash retainer of $20,000 if such independent director is a member of the risk committee and an additional
annual cash retainer of $20,000 (in addition to the annual cash retainer as a member of the risk committee) if such
independent director serves as the chair of the risk committee.
Cash retainers are pro-rated if, during the fiscal year, a director joins or resigns from the Board of Directors, a director
joins or resigns from a committee or the amount of a retainer is increased or decreased. In addition, on December 11, 2025,
restricted stock units were granted to each independent director pursuant to our 2019 Equity Incentive Plan.
The following table sets forth the compensation paid to our independent directors for the fiscal year ended December 31,
2025.
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Total ($) |
Craig Arnold (2) | 42,120 | 263,501 | 305,621 |
Timothy R. Barakett (3) | 104,268 | 354,001 | 458,269 |
Adriane M. Brown | 150,000 | 227,910 | 377,910 |
Matthew R. Cohler | 195,000 | 227,910 | 422,910 |
Mary N. Dillon | 165,000 | 227,910 | 392,910 |
Arturo Gutiérrez Hernández | 145,000 | 227,910 | 372,910 |
Xavier B. Niel | 130,000 | 227,910 | 357,910 |
Kimberly A. Ross | 167,500 | 227,910 | 395,410 |
Patricia F. Russo | 170,000 | 227,910 | 397,910 |
Robert W. Scully | 225,000 | 227,910 | 452,910 |
Evan T. Spiegel | 130,000 | 227,910 | 357,910 |
(1)Represents the aggregate grant date fair value of restricted stock units granted to each of the independent directors during the year ended December 31,
2025 as calculated in accordance with ASC Topic 718. See Note 19 "Equity-Based Compensation" in our consolidated financial statements included
elsewhere in this report for additional information about the valuation assumptions with respect to all grants reflected in this column. These amounts
reflect the aggregate grant date fair values calculated under ASC Topic 718 and may not correspond to the actual value that will be recognized by the
independent directors.
(2)Because Mr. Arnold joined our Board of Directors on September 23, 2025, he was granted an additional 242 restricted stock units.
(3)Because Mr. Barakett joined our Board of Directors on March 13, 2025, he was granted an additional 1,166 restricted stock units.
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The following table details grants of restricted stock units to each independent director in the year ended December 31,
2025. The table includes the grant date and grant date fair value of 2025 restricted stock units and the aggregate number of
unvested restricted stock units as of December 31, 2025 owned by each independent director who served as a director during
the year ended December 31, 2025:
Name | Grant Date (1) | Stock Awards (#) | Grant Date Fair Value ($) (2) | Total Number of Unvested Stock Awards on December 31, 2025 (#) |
Craig Arnold (3) | 9/23/2025 | 242 | 35,591 | — |
12/11/2025 | 1,605 | 227,910 | 1,605 | |
Timothy R. Barakett (4) | 3/13/2025 | 1,166 | 126,091 | — |
12/11/2025 | 1,605 | 227,910 | 1,605 | |
Adriane M. Brown | 12/11/2025 | 1,605 | 227,910 | 1,605 |
Matthew R. Cohler | 12/11/2025 | 1,605 | 227,910 | 1,605 |
Mary N. Dillon | 12/11/2025 | 1,605 | 227,910 | 1,605 |
Arturo Gutiérrez Hernández | 12/11/2025 | 1,605 | 227,910 | 1,605 |
Xavier B. Niel | 12/11/2025 | 1,605 | 227,910 | 1,605 |
Kimberly A. Ross | 12/11/2025 | 1,605 | 227,910 | 1,605 |
Patricia F. Russo | 12/11/2025 | 1,605 | 227,910 | 1,605 |
Robert W. Scully | 12/11/2025 | 1,605 | 227,910 | 1,605 |
Evan T. Spiegel | 12/11/2025 | 1,605 | 227,910 | 1,605 |
(1)The restricted stock units were granted on December 11, 2025 and will vest on December 1, 2026, subject to the grantee's continued service through the
vesting date. The grants were each approved by the Board of Directors on December 10, 2025.
(2)Represents the grant date fair value of restricted stock units granted to each of the independent directors during the year ended December 31, 2025 as
calculated in accordance with ASC Topic 718. See Note 19 "Equity-Based Compensation" in our consolidated financial statements included elsewhere in
this report for additional information about the valuation assumptions with respect to all grants reflected in this column. These amounts reflect the
aggregate grant date fair values calculated under ASC Topic 718 and may not correspond to the actual value that will be recognized by the independent
directors.
(3)An additional 242 restricted stock units granted to Mr. Arnold for joining the Board of Directors on September 23, 2025 vested and were settled into an
equal number of shares of KKR common stock on December 1, 2025.
(4)An additional 1,166 restricted stock units granted to Mr. Barakett for joining the Board of Directors on March 13, 2025 vested and were settled into an
equal number of shares of KKR common stock on December 1, 2025.
KKR & Co. Inc. Equity Incentive Plan
Our outstanding equity awards were granted under the Amended and Restated KKR & Co. Inc. 2019 Equity Incentive Plan,
which we refer to as our 2019 Equity Incentive Plan. Our 2019 Equity Incentive Plan has a term of 10 years from the effective
date.
Administration
Our Board of Directors or a committee thereof administers our Equity Incentive Plan (the "Administrator"). The
Administrator has the authority to make all decisions, determinations and interpretations with respect to the administration
of our 2019 Equity Incentive Plan, including determining who will receive awards thereunder, the number of shares of
common stock underlying the awards and the terms and conditions of the awards, and is permitted, subject to applicable law,
to delegate all or any part of its responsibilities and powers to any employee or employees selected by it in accordance with
the terms of the 2019 Equity Incentive Plan. The Board of Directors authorized its Executive Committee (consisting of Messrs.
Kravis and Roberts) to act as the Administrator under the 2019 Equity Incentive Plan, provided that (i) the Executive
Committee is not authorized to make grants with respect to our executive officers without approval of the Board of Directors
and (ii) the Board of Directors reserved the power and authority to act as the Administrator and to modify the power and
authority of the Executive Committee under the 2019 Equity Incentive Plan.
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Common Stock Subject to the Plan
As of December 31, 2025, 53,140,914 shares of common stock were available for issuance in respect of outstanding
awards and the grant of future awards, representing 15% of the Diluted Common Shares outstanding at the close of business
on December 31, 2025, minus the number of shares underlying any outstanding equity awards granted under our 2019 Equity
Incentive Plan that have not yet been delivered upon vesting. Under the 2019 Equity Incentive Plan, the aggregate number of
shares of common stock available under the plan will be increased, on the first day of each fiscal year, by a number of shares
of common stock equal to the positive difference, if any, between (x) 15% of the number of Diluted Common Shares
outstanding at the close of business on the last day of the immediately preceding fiscal year minus (y) the number of shares of
common stock available for issuance in respect of outstanding awards and the grant of future awards, in each case, under our
2019 Equity Incentive Plan as of the last day of such year, unless the Administrator in its sole discretion should decide to
increase the number of shares of common stock available under the plan by a lesser amount on any such date. As a result, on
the first day of each fiscal year, the number of shares of common stock available for issuance of future awards under our 2019
Equity Incentive Plan will be adjusted upwards to 15% of the number of Diluted Common Shares outstanding at the close of
business on the last day of the immediately preceding fiscal year, minus the number of shares underlying any outstanding
equity awards granted under our 2019 Equity Incentive Plan that have not yet been delivered upon vesting. Therefore, we
expect that the number of shares of common stock available for issuance of future awards under our 2019 Equity Incentive
Plan will increase at the beginning of each fiscal year compared to the end of the immediately preceding fiscal year if, during
the immediately preceding year, there has been (i) any increase in the aggregate number of shares of common stock and KKR
Group Partnership Units outstanding or (ii) any delivery of underlying shares upon vesting of outstanding equity awards under
our 2019 Equity Incentive Plan.
Restricted Stock Units and Other Equity-Based Awards
The Administrator may grant or sell awards of restricted stock units, restricted holdings units, common stock, restricted
common stock, deferred restricted common stock, phantom restricted common stock, or any other awards that are valued in
whole or in part by reference to, or are otherwise based on the fair market value of, our common stock. Any of these or other
equity-based awards may be in such form, and dependent on such conditions, as the Administrator determines, including the
right to receive, or vest with respect to, one or more shares of common stock (or the equivalent cash value of such shares)
upon the completion of a specified period of service, the occurrence of an event and/or the attainment of performance
objectives. The Administrator may determine whether any such equity-based awards will be payable in cash, shares of
common stock or other assets or a combination of cash, common stock and other assets.
Options and Stock Appreciation Rights
The Administrator may award non-qualified stock options and stock appreciation rights. Options and stock appreciation
rights granted under the 2019 Equity Incentive Plan will become vested and exercisable at such times and upon such terms
and conditions as may be determined by the Administrator at the time of grant, but no option or stock appreciation right will
be exercisable for a period of more than ten years after it is granted. The exercise price per share will be determined by the
Administrator, provided that options and stock appreciation rights granted to participants who are U.S. taxpayers will not be
granted with an exercise price less than 100% of the fair market value per share of common stock on the date of grant. To the
extent permitted by the Administrator, the exercise price of an option may be paid in cash or its equivalent, in shares of
common stock having a fair market value equal to the aggregate exercise price and satisfying such other requirements as may
be imposed by the Administrator, partly in cash and partly in shares of common stock or net settlement in shares of common
stock. As determined by the Administrator, stock appreciation rights may be settled in shares of common stock, cash or any
combination thereof.
Compensation Committee Interlocks and Insider Participation
Because we are a "controlled company" within the meaning of the corporate governance standards of the NYSE, our
Board of Directors is not required by NYSE rules to establish a compensation committee. Messrs. Kravis and Roberts, our Co-
Executive Chairmen, participated in discussions regarding executive compensation, and Messrs. Bae and Nuttall, our Co-Chief
Executive Officers, participated in discussions regarding the compensation of our other executive officers. For a description of
certain transactions between us and our executive officers and directors, see "Certain Relationships and Related Transactions,
and Director Independence."
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Compensation Committee Report
Our Board of Directors does not have a compensation committee. The entire Board of Directors has reviewed and
discussed with management the foregoing Compensation Discussion and Analysis and, based on such review and discussion,
has determined that the Compensation Discussion and Analysis should be included in this report.
Henry R. Kravis | |
George R. Roberts | |
Joseph Y. Bae | |
Scott C. Nuttall | |
Craig Arnold | |
Timothy R. Barakett | |
Adriane M. Brown | |
Matthew R. Cohler | |
Mary N. Dillon | |
Arturo Gutiérrez Hernández | |
Xavier B. Niel | |
Kimberly A. Ross | |
Patricia F. Russo | |
Robert W. Scully | |
Evan T. Spiegel | |
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
The following table sets forth the beneficial ownership of our common stock by:
•each person known to us to beneficially own more than 5% of our common stock based on our review of filings
with the SEC;
•each of our directors and named executive officers; and
•our directors and executive officers as a group.
The percentage of beneficial ownership is based on 891,550,894 shares of common stock issued and outstanding as of
February 24, 2026. Beneficial ownership is in each case determined in accordance with the rules of the SEC, and includes
equity securities of which that person has the right to acquire beneficial ownership within 60 days of February 24, 2026.
Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be
deemed a beneficial owner of securities as to which he has no economic interest. The table below does not reflect ownership
of the sole outstanding share of our Series I preferred stock by KKR Management LLP, which exercises significant voting power
as set forth in our certificate of incorporation.
Name (1) | Common Stock Beneficially Owned (2) | Percentage of Common Stock Beneficially Owned | |||||||
George R. Roberts (3) | 83,862,855 | 9.41% | |||||||
Henry R. Kravis (4) | 81,180,618 | 9.11 | |||||||
Scott C. Nuttall (5) | 21,189,424 | 2.38 | |||||||
Joseph Y. Bae (6) | 18,456,070 | 2.07 | |||||||
Craig Arnold | 242 | * | |||||||
Timothy R. Barakett | 236,166 | * | |||||||
Adriane M. Brown | 11,665 | * | |||||||
Matthew R. Cohler (7) | 141,440 | * | |||||||
Mary N. Dillon | 27,385 | * | |||||||
Arturo Gutiérrez Hernández | 12,780 | * | |||||||
Xavier B. Niel | 30,273 | * | |||||||
Kimberly A. Ross | 4,267 | * | |||||||
Patricia F. Russo | 86,859 | * | |||||||
Robert W. Scully | 188,109 | * | |||||||
Evan T. Spiegel | 10,880 | * | |||||||
Robert H. Lewin (8) | 1,199,226 | * | |||||||
Kathryn K. Sudol (9) | 160,000 | * | |||||||
Directors and executive officers as a group (18 persons) (3)(4)(5)(6)(7)(8)(9)(10) | 206,873,438 | 23.20% | |||||||
5% Stockholders | |||||||||
The Vanguard Group Inc. (11) | 56,245,699 | 6.31 | |||||||
BlackRock, Inc. (12) | 44,890,451 | 5.04 | |||||||
*Less than 1.0%.
(1)The address of each director is c/o KKR & Co. Inc., 30 Hudson Yards, New York, New York, 10001. The address of each executive officer, except Mr.
Roberts, is c/o Kohlberg Kravis Roberts & Co. L.P., 30 Hudson Yards, New York, New York 10001. The address of Mr. Roberts is c/o Kohlberg Kravis Roberts
& Co. L.P., 2800 Sand Hill Road, Suite 200, Menlo Park, California 94025.
(2)Unless otherwise indicated, each individual has sole voting power and sole investment power with respect to the shares owned.
(3)Includes 1,043,242 shares held by a limited partnership over which Mr. Roberts has sole investment power.
(4)Includes (i) 15,227 shares held by Mr. Kravis's spouse over which Mr. Kravis may be deemed to share investment and voting power, (ii) 150,000 shares
held by a charitable foundation over which Mr. Kravis has shared voting power, and (iii) 1,549,369 shares held by a limited partnership over which Mr.
Kravis has sole investment power.
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(5)Includes (i) 129,301 shares held by a trust over which Mr. Nuttall has the right to acquire investment and voting power, (ii) 2,782 shares held by a limited
liability company over which Mr. Nuttall may be deemed to share investment and voting power and (iii) 920,000 shares held by a charitable foundation
over which Mr. Nuttall has shared voting power, which shares have not been sold as of the date of this filing. Not included in the table above is 211,540
shares held by a charitable foundation for which Mr. Nuttall has non-binding advisory powers, which shares have not been sold as of the date of this filing.
(6)Includes 384,257 shares held by a trust over which Mr. Bae has the right to acquire investment and voting power. Not included in the table above is
150,000 shares held by a charitable foundation for which Mr. Bae has non-binding advisory powers, which shares have not been sold as of the date of this
filing.
(7)Includes 46,429 shares held by a trust over which Mr. Cohler has shared investment and voting power.
(8)Includes 2,500 shares held by a trust over which Mr. Lewin has shared investment and voting power.
(9)Represents 160,000 restricted holdings units which are vested or scheduled to vest within 60 days of February 24, 2026.
(10)Includes 226,666 restricted holdings units which are vested or scheduled to vest within 60 days of February 24, 2026.
(11)Based on a Schedule 13G/A filed with the SEC on November 12, 2024, as of September 30, 2024, The Vanguard Group reports it is the beneficial owner of
56,245,699 shares of common stock, with sole dispositive power over 53,380,855 shares of common stock, shared voting power over 813,842 shares of
common stock and shared dispositive power over 2,864,844 shares of common stock. The address of The Vanguard Group is 100 Vanguard Blvd.,
Malvern, Pennsylvania 19355.
(12)Based on a Schedule 13G filed with the SEC on January 21, 2026, BlackRock, Inc. reports it is the beneficial owner of 44,890,451 shares of common stock,
with sole voting power over 40,809,800 shares of common stock, and sole dispositive power over 44,890,451 shares of common stock. The address of
BlackRock, Inc. is 50 Hudson Yards, New York, New York 10001.
Securities Authorized for Issuance under 2019 Equity Compensation Plan
The table set forth below provides information concerning the awards that may be issued under our 2019 Equity
Incentive Plan as of December 31, 2025.
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) | Weighted‑Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in the first column) (2) | |
Equity Compensation Plan Approved by Security Holders | 76,843,384 | — | 53,140,914 |
Equity Compensation Plan Not Approved by Security Holders | — | — | — |
Total | 76,843,384 | — | 53,140,914 |
(1)Reflects the aggregate number of restricted stock units and restricted holdings units granted under our 2019 Equity Incentive Plan and outstanding as of
December 31, 2025.
(2)The aggregate number of shares of common stock available under our 2019 Equity Incentive Plan is increased, on the first day of each fiscal year, by a
number of shares of common stock equal to the positive difference, if any, between (x) 15% of the number of diluted shares of common stock
outstanding at the close of business on the last day of the immediately preceding fiscal year minus (y) the number of shares of common stock available for
issuance in respect of outstanding awards and the grant of future awards, in each case, under our 2019 Equity Incentive Plan as of the last day of such
year, unless the Administrator in its sole discretion should decide to increase the number of shares of common stock available under the plan by a lesser
amount on any such date. We have filed registration statements on Form S-8 under the Securities Act to register shares of common stock covered by our
Equity Incentive Plan. Accordingly, upon issuance pursuant to our 2019 Equity Incentive Plan, these shares of common stock will be available for sale in
the open market.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The following description is a summary of the material terms of the agreements described below, and does not contain
all of the information that you may find useful. For additional information, you should read the copies of such agreements, all
of which have been previously filed with the SEC or incorporated by reference as exhibits to this report.
Reorganization Agreement
On October 8, 2021, KKR entered into a Reorganization Agreement with KKR Holdings, Associates Holdings, KKR
Management (the holder of the sole outstanding share of Series I preferred stock), and the other parties thereto. Pursuant to
the Reorganization Agreement, the parties agreed to undertake a series of integrated transactions to effect a number of
transformative structural and governance changes, including (a) the acquisition by KKR of KKR Holdings and all of the KKR
Group Partnership Units held by it (which as noted below is completed), (b) the future elimination of voting control by KKR
Management and the Series I preferred stock held by it, (c) the future establishment of voting rights for all common stock on a
one vote per share basis, including with respect to the election of directors, and (d) the future control of the carry pool by
KKR.
On May 31, 2022, the merger transactions (“Reorganization Mergers”) contemplated by the Reorganization Agreement to
simplify KKR’s corporate structure were completed. In the Reorganization Mergers, KKR acquired KKR Holdings (which
changed its name to KKR Group Holdings L.P.) and 258.3 million KKR Group Partnership Units held by it, and in exchange KKR
issued and delivered 266.8 million shares of common stock to the former limited partners of KKR Holdings. Following the
Reorganization Mergers, our principals own the same common stock as the public stockholders of KKR & Co. Inc. (which was
formerly known as KKR Aubergine Inc. and become the successor holding company of our business). For additional
information about the Reorganization Mergers, please see Note 1 “Organization” in our financial statements included in this
report.
On May 30, 2022, KKR's tax receivable agreement with KKR Holdings was terminated, other than with respect to
exchanges of KKR Holdings equity for common stock that occurred prior to Reorganization Mergers.
The Reorganization Agreement further provides for:
(i) the future elimination of control of KKR & Co. Inc. by KKR Management, by having all voting power vested in the
common stock of KKR & Co. Inc. on a one vote per share basis on the Sunset Date (as defined below), which will be no
later than December 31, 2026, and
(ii) also on the Sunset Date, the future acquisition of control by KKR of Associates Holdings when a subsidiary of KKR & Co.
Inc. will be the general partner of Associates Holdings.
The “Sunset Date” will be the earlier of (i) December 31, 2026 and (ii) the six-month anniversary of the first date on which
the death or permanent disability of both our Co-Founders has occurred (or any earlier date consented to by KKR
Management, in its sole discretion).
The incremental 8.5 million shares of common stock of KKR & Co. Inc. received in the Reorganization Mergers are not be
transferable (except in the case of death or for estate planning purposes) prior to the Sunset Date, and in addition, KKR
Management agreed not to transfer its ownership of the sole share of Series I preferred stock.
The transactions contemplated to occur under the Reorganization Agreement (including the Reorganization Mergers, the
termination of the tax receivable agreement except with respect to exchanges of KKR Holdings units made prior thereto, and
the changes to occur effective on the Sunset Date) are all required to be consummated together as integrated transactions
under the Reorganization Agreement. Because the Reorganization Mergers have been completed, the changes to occur
effective on the Sunset Date are unconditional commitments of KKR Management, Associates Holdings, KKR & Co. Inc., and
the other parties to the Reorganization Agreement.
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Registration Rights Agreement
In connection with our NYSE listing, we entered into a registration rights agreement with KKR Holdings pursuant to which
we granted KKR Holdings, its affiliates and transferees of its KKR Group Partnership Units (including the shares of KKR & Co.
Inc. received in the Reorganization Mergers) the right, under certain circumstances and subject to certain restrictions, to
require us to register under the Securities Act our common stock (and other securities convertible into or exchangeable or
exercisable for shares of our common stock) held or acquired by them. Under the registration rights agreement, holders of
registration rights have the right to require us to make available shelf registration statements permitting sales of shares of
common stock into the market from time to time over an extended period. In addition, holders of registration rights will have
the ability to exercise certain piggyback registration rights in connection with registered offerings requested by other holders
of registration rights or initiated by us. On October 1, 2010, the registration statement we filed pursuant to this agreement
was declared effective, and related post-effective amendments were declared effective on April 14, 2011, September 21,
2011, July 10, 2018 and June 7, 2022.
Tax Receivable Agreement
We had a tax receivable agreement with KKR Holdings, pursuant to which we were required to pay to KKR Holdings or to
its limited partners a portion of the tax savings realized by exchanges of KKR Group Partnership Units for shares of common
stock pursuant to the exchange agreement described above. As noted above, the tax receivable agreement was terminated
on May 30, 2022, but we remain obligated to make payments under the tax receivable agreement with respect to any
exchanges completed prior to May 30, 2022.
KKR Group Partnership made an election under Section 754 of the Code that was effective for each taxable year in which
an exchange of KKR Group Partnership Units for shares of common stock occurred prior to May 30, 2022, which may have
resulted in an increase in our tax basis of the assets of KKR Group Partnership at the time of an exchange of KKR Group
Partnership Units. Certain of these exchanges have resulted in an increase in our share of the tax basis of the tangible and
intangible assets of KKR Group Partnership, primarily attributable to a portion of the goodwill inherent in our business that
would not otherwise have been available. This increase in tax basis has increased certain depreciation and amortization
deductions for tax purposes and therefore is expected to reduce the amount of income tax we otherwise would be required
to pay. This increase in tax basis is expected to also decrease gain (or increase loss) on future dispositions of certain capital
assets to the extent tax basis is allocated to those capital assets.
The surviving payment obligations under the tax receivable agreement require us to pay to former limited partners of KKR
Holdings who exchanged KKR Holdings units for shares of common stock 85% of the amount of cash savings, if any, in U.S.
federal, state and local income tax that we realized as a result of the increase in tax basis described above, as well as 85% of
the amount of any such savings we actually realize as a result of increases in tax basis that arise due to future payments under
the agreement. We benefit from the remaining 15% of cash savings, if any, in income tax that we realize.
These payment obligations are obligations of KKR Group Co. Inc. and its wholly-owned subsidiary, KKR Group Holdings
Corp., which are treated as corporations for U.S. tax purposes, but are not payment obligations of KKR & Co. Inc. or KKR Group
Partnership L.P. Payments made under the tax receivable agreement are required to be made within 90 days of the filing of
our tax returns, which may result in a timing difference between the tax savings received by KKR and the cash payments made
to the former limited partners of KKR Holdings. There is no tax receivable agreement in place for any exchange of restricted
holdings units granted under the 2019 Equity Incentive Plan, and therefore, we will receive 100% of any tax benefits arising
from such exchanges unless we exercise discretion to make tax distributions to holders of restricted holdings units.
For purposes of the tax receivable agreement, cash savings in income tax is computed by comparing our actual income
tax liability to the amount of such taxes that we would have been required to pay had there been no increase to the tax basis
of the tangible and intangible assets of KKR Group Partnership as a result of the exchanges of KKR Group Partnership Units
and had we not entered into the tax receivable agreement. The surviving payment obligations of the tax receivable agreement
continue until all such tax benefits have been utilized or expired.
Effective July 1, 2018, we amended the tax receivable agreement to reflect our conversion to a corporation. The
amendment also clarifies that the tax benefit payments with respect to exchanges completed at any time prior to the
conversion will be calculated without taking into account the step-up in tax basis in our underlying assets that we generated in
2018 as a result of the conversion.
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Estimating the amount of payments that may be made under the tax receivable agreement is by its nature imprecise,
insofar as the calculation of amounts payable depends on a variety of factors. The actual increase in tax basis, as well as the
amount and timing of any payments under the tax receivable agreement, will vary based upon a number of factors, including
the amount of tax, if any, we are required to pay aside from any tax benefit from the exchanges, and the timing of any such
payment. If we did not have taxable income aside from any tax benefit from the exchanges, we are not required to make
payments under the tax receivable agreement for that taxable year because no tax savings would have been actually realized.
We expect that as a result of the amount of the increases in the tax basis of the tangible and intangible assets of KKR
Group Partnership, assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize
the full tax benefit of the increased amortization of our assets, future payments under the tax receivable agreement could be
significant. As of December 31, 2025, an undiscounted payable of $359.3 million has been recorded in due to affiliates in the
financial statements representing management's best estimate of the amounts currently expected to be owed for certain
exchanges of KKR Holdings equity that took place prior to the termination of the tax receivable agreement. The payments
under the tax receivable agreement are required to be made within 90 days of the filing of our tax returns. During the year
ended December 31, 2025, an aggregate of $25.5 million was made to the former limited partners of KKR Holdings.
Payments under the tax receivable agreement are based upon the tax reporting positions that we determined. We are
not aware of any issue that would cause the IRS to challenge a tax basis increase that we have taken. However, none of the
former limited partners of KKR Holdings will reimburse us for any payments previously made under the tax receivable
agreement if such tax basis increase, or the tax benefits we claimed arising from such increase, is successfully challenged by
the IRS. As a result, in certain circumstances, payments to former limited partners of KKR Holdings under the tax receivable
agreement could be in excess of our cash tax savings. Our ability to achieve benefits from any tax basis increase, and the
payments to be made under this agreement, will depend upon a number of factors, as discussed above, including the timing
and amount of our future income.
KKR Group Partnership Agreement
We control the general partner of KKR Group Partnership and, through KKR Group Partnership and its subsidiaries, the
KKR business. KKR Group Partnership is the owner of the entirety of KKR's business.
Pursuant to the limited partnership agreement of KKR Group Partnership, we, as the controlling general partner of KKR
Group Partnership, have the indirect right to determine when distributions will be made to the holders of KKR Group
Partnership Units and the amount of any such distributions.
The limited partnership agreement of KKR Group Partnership permits tax distributions to the holders of KKR Group
Partnership Units if the general partner of KKR Group Partnership determines that distributions from KKR Group Partnership
would otherwise be insufficient to cover the tax liabilities of a holder of a KKR Group Partnership Unit. Generally, these tax
distributions will be computed based on our estimate of the net taxable income of the relevant partnership allocable to a
holder of a KKR Group Partnership Unit multiplied by an assumed tax rate equal to the highest effective marginal combined
U.S. federal, state and local income tax rate prescribed for an individual or corporate resident in New York, New York (taking
into account the non-deductibility of certain expenses and the character of our income).
The limited partnership agreement of KKR Group Partnership authorizes the general partner of KKR Group Partnership to
issue an unlimited number of additional securities of KKR Group Partnership with such designations, preferences, rights,
powers and duties that are different from, and may be senior to, those applicable to KKR Group Partnership Units, and which
may be exchangeable for KKR Group Partnership Units.
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Firm Use of Private Aircraft
From time to time, we use private aircraft to transport employees for business purposes. In accordance with KKR & Co.
Inc.'s policy on reimbursement of the cost of use of private aircraft while traveling for business, we reimbursed certain of our
executive officers for firm use of private aircraft.
Companies associated with Messrs. Kravis, Roberts, and Nuttall own aircraft that are used for KKR's business in the
ordinary course of our operations. Messrs. Kravis, Roberts, and Nuttall funded the purchase of these aircraft with their
personal funds and fund all operating, personnel and maintenance costs associated with their operation. The hourly rates that
we pay for the use of these aircraft are based on current market rates for chartering private aircraft of the same type. For the
year ended December 31, 2025, we paid a total of $5.8 million (including applicable taxes) for the use of these aircraft, of
which substantially all was borne by us rather than our investment funds (which indirectly bear the cost of some of these
flights at commercial airline rates). Of this total, $2.6 million relates to use of an aircraft owned by an entity controlled by Mr.
Kravis, $0.9 million relates to use of an aircraft owned by an entity controlled by Mr. Roberts, and $2.3 million relates to use
of an aircraft owned by an entity controlled by Mr. Nuttall.
Side-By-Side and Other Investments
Because fund investors typically are unwilling to invest their capital in a fund unless the fund's manager also invests its
own capital in the fund's investments, our investment fund documents generally require the general partners of our
investment funds to make minimum capital commitments to the funds. The amount of these commitments, which are
negotiated by fund investors, generally range from 2% to 8% of a fund's total capital commitments at final closing, but may be
greater for certain funds pursuing new strategies. When investments are made, the general partner contributes capital to the
fund based on its fund commitment percentage and if applicable, acquires a capital interest in the investment that is not
subject to a carried interest or management fees. Historically, these capital contributions have been funded with cash from
operations that otherwise would be distributed to our employees.
We did not acquire capital interests in certain investments that were funded by our employees or others involved in our
business prior to October 1, 2009. Rather, those capital interests were allocated to our employees or others involved in our
business and are reflected in our financial statements as noncontrolling interests in consolidated entities to the extent that we
hold the general partner interest in the fund. Any capital contributions that our fund general partners are required to make to
a fund will be funded by us and we will be entitled to receive our allocable share of the returns thereon.
In addition, certain of our current and former employees and certain other qualifying personnel are permitted to invest,
and have invested, their own capital in our investment funds and vehicles, in side-by-side investments with our funds and the
firm, as well as in funds managed by our hedge fund partnerships. Side-by-side investments are investments generally made
on the same terms and conditions as those available to the applicable fund or the firm and, they, together with their
investments in our funds and vehicles or the funds managed by our hedge fund partnerships, are not generally subject to
management fees or a carried interest. The cash invested by our current and former employees and certain other qualifying
personnel and their investment vehicles aggregated to $611.9 million for the year ended December 31, 2025, of which $35.0
million, $60.4 million, $38.9 million, $27.7 million, $4.4 million, and $0.9 million was invested by Messrs. Kravis, Roberts, Bae,
Nuttall, and Lewin and Ms. Sudol and their personal or estate planning vehicles, respectively. These investments are not
included in the accompanying consolidated financial statements.
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Indemnification of Directors, Officers and Others
Under our certificate of incorporation, in most circumstances we will indemnify the following persons, to the fullest
extent permitted by law, from and against all losses, claims, damages, liabilities, joint or several, expenses (including legal fees
and expenses), judgments, fines, penalties, interest, settlements or other amounts: (a) the Series I preferred stockholder; (b)
KKR Management in its capacity as the former general partner of KKR & Co. L.P. (the "Former Managing Partner"); (c) any
person who is or was an affiliate of the Series I preferred stockholder or the Former Managing Partner (excluding any affiliate
that is or was controlled by KKR & Co. Inc. or one of its subsidiaries); (d) any person who is or was a member, partner, tax
matters partner (as defined in the Code, as in effect prior to 2018), partnership representative (as defined in the Code),
officer, director, employee, agent, fiduciary or trustee of KKR & Co. Inc. or one of its subsidiaries, Series I preferred
stockholder or the Former Managing Partner; (e) any person who is or was serving at our request or the request of the Former
Managing Partner or any subsidiary of KKR & Co. Inc. or the Former Managing Partner as an officer, director, employee,
member, partner, tax matters partner, partnership representative, agent, fiduciary or trustee of another person (provided
that, for clauses (d) and (e), a person shall not be an indemnitee by reason of providing, on a fee-for-services basis or similar
arms-length compensatory basis, agency, advisory, consulting, trustee, fiduciary or custodial services); or (f) any other person
designated by us at any time as an indemnitee as permitted by applicable law.
We have agreed to provide this indemnification unless there has been a final and non-appealable judgment by a court of
competent jurisdiction determining that these persons acted in bad faith or engaged in fraud or willful misconduct. We have
also agreed to provide this indemnification for criminal proceedings. Any indemnification under these provisions will only be
out of our assets. Unless it otherwise agrees, the Series I preferred stockholder will not be liable for, or have any obligation to
contribute or loan any monies or property to us to enable us to effectuate, indemnification. The indemnification of the
persons described above shall be secondary to any indemnification such person is entitled from another person or the
relevant KKR fund to the extent applicable. We may purchase insurance against liabilities asserted against, and expenses
incurred by, persons in connection with their activities, regardless of whether we would have the power to indemnify the
person against liabilities under our certificate of incorporation. We currently maintain liability insurance for our directors and
officers. Such insurance would be available to our directors and officers in accordance with its terms.
In addition, we have entered into indemnification agreements with KKR Management and each of our directors. Each
indemnification agreement provides that the indemnitee, subject to the limitations set forth in each indemnification
agreement, will be indemnified and held harmless by us on an after-tax basis from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest,
settlements or other amounts arising from any and all threatened, pending or completed claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, and whether formal or informal and including appeals, in
which the indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an
indemnitee or by reason of any action alleged to have been taken or omitted in such capacity, whether arising from alleged
acts or omissions to act occurring on, before or after the date of such indemnification agreement. Each indemnification
agreement provides that the indemnitee shall not be indemnified and held harmless if there has been a final and non-
appealable judgment entered by an arbitral tribunal or court of competent jurisdiction determining that, in respect of the
matter for which the indemnitee is seeking indemnification pursuant to the indemnification agreement, the indemnitee acted
in bad faith or engaged in fraud or willful misconduct.
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Guarantee of Contingent Obligations to Fund Partners; Indemnification
The partnership documents governing KKR's carry-paying investment funds and vehicles generally include a "clawback"
provision that, if triggered, may give rise to a contingent obligation requiring the general partner to return amounts to the
fund for distribution to the fund investors at the end of the life of the fund. Under a clawback obligation, upon the liquidation
of a fund, the general partner is required to return, typically on an after-tax basis, previously distributed carry to the extent
that, due to the diminished performance of later investments, the aggregate amount of carry distributions received by the
general partner during the term of the fund exceed the amount to which the general partner was ultimately entitled,
including the effects of any performance thresholds. As of December 31, 2025, $150.0 million of carried interest was subject
to this clawback obligation, assuming that all applicable carry-paying funds were liquidated at their December 31, 2025 fair
values. Had the investments in such funds been liquidated at zero value, the clawback obligation would have been
approximately $5.8 billion. Carried interest is recognized in the consolidated statements of operations based on the
contractual conditions set forth in the agreements governing the fund as if the fund were terminated and liquidated at the
reporting date and the fund's investments were realized at the then estimated fair values. Amounts earned pursuant to
carried interest are earned by the general partner of those funds to the extent that cumulative investment returns are
positive and where applicable, preferred return thresholds have been met. If these investment amounts earned decrease or
turn negative in subsequent periods, recognized carried interest will be reversed and to the extent that the aggregate amount
of carry distributions received by the general partner during the term of the fund exceed the amount to which the general
partner was ultimately entitled, a clawback obligation would be recorded. For funds that are consolidated, this clawback
obligation, if any, is reflected as an increase in noncontrolling interests in the consolidated statements of financial condition.
For funds that are not consolidated, this clawback obligation, if any, is reflected as a reduction of KKR's investment balance as
this is where carried interest is initially recorded.
Menlo Park Office
Our office in Menlo Park, California, is owned by a real estate partnership that is controlled and majority-owned by
persons unaffiliated with KKR and its executive officers. However, Messrs. Kravis and Roberts and their estate planning
vehicles own and control a minority limited partner interest in the real estate partnership. In November 2022, KKR entered
into a new 15-year lease with the real estate partnership, representing an annual rent of $6.3 million, subject to certain
current and annual adjustments. Payments made from KKR to this real estate partnership aggregated $7.1 million for the year
ended December 31, 2025.
Confidentiality and Restrictive Covenant Agreements
Our employees have entered into confidentiality and restrictive covenant agreements that include prohibitions on our
employees competing with us or soliciting clients, investments or employees of our firm during a restricted period following
their departure from the firm. For further information on these agreements, see "Executive Compensation—Narrative
Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Confidentiality and Restrictive
Covenant Agreements."
Other Transactions with Related Persons
We have entered, and may in the future continue to enter, into ordinary course transactions with unaffiliated entities
known to us to beneficially own more than 5% of any class of our outstanding voting securities. These transactions may
include investments by them in our funds generally on the same terms and conditions offered to other unaffiliated fund
investors and participation in our capital markets transactions, including underwritings and syndications, generally on the
same terms and conditions offered to other unaffiliated capital markets participants. See "Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters."
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Statement of Policy Regarding Transactions with Related Persons
Our Board of Directors adopted a written statement of policy for transactions with related persons (our "related person
policy"). Our related person policy requires that a "related person" (as defined as in Item 404(a) of Regulation S-K) must
promptly disclose to our General Counsel or other designated person any "related person transaction" (defined as any
transaction, arrangement or relationship, or series of similar transactions, arrangements or relationships, including, without
limitation, any loan, guarantee of indebtedness, transfer or lease of real estate, or use of company property that is reportable
by us under Item 404(a) of Regulation S-K in which we were or are to be a participant and the amount involved exceeds
$120,000 and in which any related person had or will have a direct or indirect material interest) and all material facts with
respect thereto. Those individuals will then communicate that information to the Board of Directors. No related person
transaction will be consummated without the approval or ratification of a committee of the board consisting exclusively of
disinterested directors; provided, however, the conflicts committee of our Board of Directors has pre-approved: certain
ordinary course transactions with persons known to us to beneficially own more than 5% of our outstanding common stock
on terms generally not less favorable as obtained from other third parties, including investments in our funds as limited
partners and participation in capital markets transactions like underwritings and syndications; the renewal of pre-existing
strategic relationships with persons known to us to beneficially own more than 5% of our outstanding common stock; the use
of aircraft owned by our senior employees for business purposes; certain investments by eligible employees or directors in
our funds, in side-by-side investments with our funds and the firm, as well as in funds managed by our hedge fund
partnerships; and certain pro rata cash contributions to the KKR Group Partnership for cash management purposes. In
addition, it is our policy that directors interested in a related person transaction should recuse themselves from any vote on a
related person transaction in which they have an interest, unless otherwise permitted by applicable law.
Director Independence
See "Directors, Executive Officers and Corporate Governance—Independence and Composition of the Board of Directors"
for information on director independence.
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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table summarizes the aggregate fees for professional services provided by Deloitte & Touche LLP (PCAOB ID
No. 34 ), the member firms of Deloitte Touche Tohmatsu Limited, or their respective affiliates (collectively, the "Deloitte
Entities") for the years ended December 31, 2025 and 2024.
For the Year Ended December 31, 2025 | ||
($ in thousands) | ||
Audit Fees | $78,323 | (1) |
Audit-Related Fees | $49,779 | (2) |
Tax Compliance Fees | $74,583 | (3) |
Tax Planning and Advisory Fees | $29,961 | (4) |
All Other Fees | $1,221 |
For the Year Ended December 31, 2024 | ||
($ in thousands) | ||
Audit Fees | $65,999 | (1) |
Audit-Related Fees | $52,505 | (2) |
Tax Compliance Fees | $63,215 | (3) |
Tax Planning and Advisory Fees | $26,754 | (4) |
All Other Fees | $230 |
(1)Audit Fees consisted of estimated fees for each audit year for (a) the audits of our consolidated financial statements in this report on Form 10-K and
services related to, or required by, statute or regulation, including other corporate entities; (b) reviews of the interim condensed consolidated financial
statements included in our quarterly reports on Form 10-Q; (c) comfort letters, consents and other services related to SEC and other regulatory filings;
and (d) audit services provided to KKR funds, the costs of which are generally borne by the KKR funds.
(2)Audit-Related Fees primarily included merger, acquisition, and investment due diligence services for strategic acquisitions or investments in target
companies, the costs of which are generally borne by the KKR funds.
(3)Tax Compliance Fees consisted of fees for services rendered for tax compliance.
(4)Tax Planning and Advisory Fees primarily included tax planning and advisory services, as well as tax fees for merger, acquisition, and investment
structuring services for strategic acquisitions or investments in target companies, the costs of which are generally borne by the KKR funds.
The Deloitte Entities provided audit, audit-related, tax, and other services to KKR portfolio companies, which are
approved directly by the portfolio company’s management and are not included in the amounts presented above.
Our Audit Committee charter, which is available on our website at www.kkr.com under "Investor Relations—
Sustainability & Corporate Governance—Corporate Governance—Audit Committee Charter," requires the Audit Committee to
approve in advance all audit and non-audit related services to be provided by our independent registered public accounting
firm in accordance with the audit and non-audit related services pre-approval policy. All services reported in the Audit, Audit-
Related, Tax, and All Other categories above were approved by the Audit Committee.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this report.
1. Financial Statements
See Item 8 above.
2. Financial Statement Schedules:
See Schedule II - Valuation and Qualifying Accounts - Years Ended December 31, 2025, 2024, and 2023 and
Schedule IV - Reinsurance - Years Ended December 31, 2025, 2024, and 2023 - of this report on Form 10-K. The other
schedules are omitted as they are not applicable or the amounts involved are not material.
3. Exhibits:
2.1 | Plan of Conversion (incorporated by reference to Exhibit 2.1 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on May 8, 2018). | |
2.2 | Merger Agreement, dated as of July 7, 2020, by and among Global Atlantic Financial Group Limited, a Bermuda exempted company, Global Atlantic Financial Life Limited, a Bermuda exempted company, Magnolia Merger Sub Limited, a Bermuda exempted company, Magnolia Parent LLC, a Cayman Islands limited liability company, and solely for Section 2.10(a) thereunder, LAMC LP, a Cayman Island exempted limited partnership, and Goldman Sachs & Co. LLC, solely as the equity representative (incorporated by reference to Exhibit 2.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on July 10, 2020). | |
2.3 | Reorganization Agreement, dated as of October 8, 2021, by and among KKR & Co. Inc., KKR Group Holdings Corp., KKR Group Partnership L.P., KKR Holdings L.P., KKR Holdings GP Limited, KKR Associates Holdings L.P., KKR Associates Holdings GP Limited and KKR Management LLP (incorporated by reference to Exhibit 10.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on October 12, 2021). | |
2.4 | Merger Agreement, dated as of November 28, 2023, by and among KKR Magnolia Holdings LLC, Sweetbay Merger Sub LLC and The Global Atlantic Financial Group LLC (incorporated by reference to Exhibit 2.1 to KKR & Co. Inc.’s Current Report on Form 8-K filed on November 29, 2023). | |
3.1 | Second Amended and Restated Certificate of Incorporation of KKR & Co. Inc. (incorporated by reference to Exhibit 3.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on August 9, 2024). | |
3.2 | Second Amended and Restated Bylaws of KKR & Co. Inc. (incorporated by reference to Exhibit 3.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on August 9, 2024). | |
3.3 | Certificate of Designations of 6.25% Series D Mandatory Convertible Preferred Stock of KKR & Co. Inc. (incorporated by reference to Exhibit 3.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on March 7, 2025). | |
4.1 | Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 | |
4.2 | Form of 6.25% Series D Mandatory Convertible Preferred Stock Certificate (included within Exhibit 3.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on March 7, 2025). | |
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4.3 | Indenture dated as of February 1, 2013 among KKR Group Finance Co. II LLC, KKR & Co. L.P., KKR Management Holdings L.P., KKR Fund Holdings L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on February 1, 2013). | |
4.4 | First Supplemental Indenture dated as of February 1, 2013 among KKR Group Finance Co. II LLC, KKR & Co. L.P., KKR Management Holdings L.P., KKR Fund Holdings L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on February 1, 2013). | |
4.5 | Second Supplemental Indenture dated as of August 5, 2014 among KKR Group Finance Co. II LLC, KKR & Co. L.P., KKR Management Holdings L.P., KKR Fund Holdings L.P., KKR International Holdings L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 7, 2014). | |
4.6 | Third Supplemental Indenture dated as of May 31, 2022 among KKR Group Finance Co. II LLC, KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.11 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 5, 2022). | |
4.7 | Form of 5.500% Senior Note due 2043 (included in Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8- K filed on February 1, 2013). | |
4.8 | Indenture dated as of May 29, 2014 among KKR Group Finance Co. III LLC, KKR & Co. L.P., KKR Management Holdings L.P., KKR Fund Holdings L.P. and The Bank of New York Mellon Trust Company, N. A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 29, 2014). | |
4.9 | First Supplemental Indenture dated as of May 29, 2014 among KKR Group Finance Co. III LLC, KKR & Co. L.P., KKR Management Holdings L.P., KKR Fund Holdings L.P. and The Bank of New York Mellon Trust Company, N. A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 29, 2014). | |
4.10 | Second Supplemental Indenture dated as of August 5, 2014 among KKR Group Finance Co. III LLC, KKR & Co. L.P., KKR Management Holdings L.P., KKR Fund Holdings L.P., KKR International Holdings L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.3 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 7, 2014). | |
4.11 | Third Supplemental Indenture dated as of May 31, 2022 among KKR Group Finance Co. III LLC, KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.12 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 5, 2022). | |
4.12 | Form of 5.125% Senior Note due 2044 (included in Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8- K filed on May 29, 2014). | |
4.13 | Indenture dated as of March 23, 2018 among KKR Group Finance Co. IV LLC, KKR & Co. L.P., KKR Management Holdings L.P., KKR Fund Holdings L.P., KKR International Holdings L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on March 23, 2018). | |
4.14 | First Supplemental Indenture dated as of March 23, 2018 among KKR Group Finance Co. IV LLC, KKR & Co. L.P., KKR Management Holdings L.P., KKR Fund Holdings L.P., KKR International Holdings L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on March 23, 2018). |
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4.15 | Second Supplemental Indenture dated as of May 31, 2022 among KKR Group Finance Co. IV LLC, KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.13 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 5, 2022). | |
4.16 | Form of 0.764% Senior Note due 2025 (included in Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8- K filed on March 23, 2018). | |
4.17 | Form of 1.595% Senior Note due 2038 (included in Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8- K filed on March 23, 2018). | |
4.18 | Indenture dated as of May 22, 2019 among KKR Group Finance Co. V LLC, KKR & Co. Inc., KKR Management Holdings L.P., KKR Fund Holdings L.P., KKR International Holdings L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 22, 2019). | |
4.19 | First Supplemental Indenture dated as of May 22, 2019 among KKR Group Finance Co. V LLC, KKR & Co. Inc., KKR Management Holdings L.P., KKR Fund Holdings L.P., KKR International Holdings L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 22, 2019). | |
4.20 | Second Supplemental Indenture dated as of May 31, 2022 among KKR Group Finance Co. V LLC, KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.14 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 5, 2022). | |
4.21 | Form of 1.625% Senior Note due 2029 (included in Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8- K filed on May 22, 2019). | |
4.22 | Indenture dated as of July 1, 2019 among KKR Group Finance Co. VI LLC, KKR & Co. Inc., KKR Management Holdings L.P., KKR Fund Holdings L.P., KKR International Holdings L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on July 1, 2019). | |
4.23 | First Supplemental Indenture dated as of July 1, 2019 among KKR Group Finance Co. VI LLC, KKR & Co Inc., KKR Management Holdings L.P., KKR Fund Holdings L.P., KKR International Holdings L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on July 1, 2019). | |
4.24 | Form of 3.750% Senior Note due 2029 (included in Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8- K filed on July 1, 2019). | |
4.25 | Second Supplemental Indenture dated as of April 21, 2020 among KKR Group Finance Co. VI LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on April 21, 2020). | |
4.26 | Third Supplemental Indenture dated as of May 31, 2022 among KKR Group Finance Co. VI LLC, KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.15 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 5, 2022). | |
4.27 | Form of 3.750% Senior Note due 2029 (included in Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8- K filed on April 21, 2020). | |
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4.28 | Indenture dated as of February 25, 2020 among KKR Group Finance Co. VII LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on February 25, 2020). | |
4.29 | First Supplemental Indenture, dated as of February 25, 2020 among KKR Group Finance Co. VII LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on February 25, 2020). | |
4.30 | Second Supplemental Indenture dated as of May 31, 2022 among KKR Group Finance Co. VII LLC, KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.16 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 5, 2022). | |
4.31 | Form of 3.625% Senior Note Due 2050 (included in Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8- K filed on February 25, 2020). | |
4.32 | Indenture dated as of August 25, 2020 among KKR Group Finance Co. VIII LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on August 25, 2020). | |
4.33 | First Supplemental Indenture dated as of August 25, 2020 among KKR Group Finance Co. VIII LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on August 25, 2020). | |
4.34 | Second Supplemental Indenture dated as of May 31, 2022 among KKR Group Finance Co. VIII LLC, KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.17 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 5, 2022). | |
4.35 | Form of 3.500% Senior Note due 2050 (included in Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8- K filed on August 25, 2020). | |
4.36 | Indenture dated as of March 31, 2021 among KKR Group Finance Co. IX LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on March 31, 2021). | |
4.37 | First Supplemental Indenture dated as of March 31, 2021 among KKR Group Finance Co. IX LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on March 31, 2021). | |
4.38 | Second Supplemental Indenture dated as of May 31, 2022 among KKR Group Finance Co. IX LLC, KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.18 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 5, 2022). | |
4.39 | Form of 4.625% Subordinated Note due 2061 of KKR Group Finance Co. IX LLC (included within Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on March 31, 2021). | |
4.40 | Indenture dated as of December 8, 2021 among KKR Group Finance Co. X LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on December 8, 2021). | |
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4.41 | First Supplemental Indenture dated as of December 8, 2021 among KKR Group Finance Co. X LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on December 8, 2021). | |
4.42 | Second Supplemental Indenture dated as of May 31, 2022 among KKR Group Finance Co. X LLC, KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.19 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 5, 2022). | |
4.43 | Form of 3.250% Senior Note due 2051 (included within Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on December 8, 2021). | |
4.44 | Indenture dated as of April 26, 2022 among KKR Group Finance Co. XI LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on April 26, 2022). | |
4.45 | First Supplemental Indenture dated as of April 26, 2022 among KKR Group Finance Co. XI LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on April 26, 2022). | |
4.46 | Second Supplemental Indenture dated as of May 31, 2022 among KKR Group Finance Co. XI LLC, KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.20 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 5, 2022). | |
4.47 | Form of 1.054% Senior Note due 2027 (included within Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on April 26, 2022). | |
4.48 | Form of 1.244% Senior Note due 2029 (included within Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on April 26, 2022). | |
4.49 | Form of 1.437% Senior Note due 2032 (included within Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on April 26, 2022). | |
4.50 | Form of 1.553% Senior Note due 2034 (included within Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on April 26, 2022). | |
4.51 | Form of 1.795% Senior Note due 2037 (included within Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on April 26, 2022). | |
4.52 | Indenture dated as of May 17, 2022 among KKR Group Finance Co. XII LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 17, 2022). | |
4.53 | First Supplemental Indenture dated as of May 17, 2022 among KKR Group Finance Co. XII LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 17, 2022). | |
4.54 | Second Supplemental Indenture dated as of May 31, 2022 among KKR Group Finance Co. XII LLC, KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.21 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on August 5, 2022). | |
4.55 | Form of 4.850% Senior Note due 2032 (included within Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 17, 2022). |
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4.56 | Third Supplemental Indenture, dated as of May 25, 2023, among KKR Group Finance Co. XI LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 25, 2023). | |
4.57 | Form of 1.428% Senior Note due 2028 (included within Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 25, 2023). | |
4.58 | Form of 1.614% Senior Note due 2030 (included within Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 25, 2023). | |
4.59 | Form of 1.939% Senior Note due 2033 (included within Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 25, 2023). | |
4.60 | Form of 2.312% Senior Note due 2038 (included within Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 25, 2023). | |
4.61 | Form of 2.574% Senior Note due 2043 (included within Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 25, 2023). | |
4.62 | Form of 2.747% Senior Note due 2053 (included within Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 25, 2023). | |
4.63 | Fourth Supplemental Indenture, dated as of May 30, 2024, among KKR Group Finance Co. XI LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 30, 2024). | |
4.64 | Fifth Supplemental Indenture, dated as of June 10, 2024, among KKR Group Finance Co. XI LLC, KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on August 9, 2024). | |
4.65 | Form of 1.559% Senior Note due 2029 (included within Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 30, 2024 and incorporated by reference). | |
4.66 | Form of 1.762% Senior Note due 2031 (included within Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 30, 2024 and incorporated by reference). | |
4.67 | Form of 2.083% Senior Note due 2034 (included within Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 30, 2024 and incorporated by reference). | |
4.68 | Form of 2.719% Senior Note due 2044 (included within Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 30, 2024 and incorporated by reference). | |
4.69 | Form of 3.008% Senior Note due 2054 (included within Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 30, 2024 and incorporated by reference). | |
4.70 | Indenture, dated as of May 28, 2025, between KKR & Co. Inc. and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 28, 2025). | |
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4.71 | First Supplemental Indenture dated as of May 28, 2025 among KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 28, 2025). | |
4.72 | Form of 6.875% Subordinated Note due 2065 (included within Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on May 28, 2025). | |
4.73 | Second Supplemental Indenture dated as of August 7, 2025 among KKR & Co. Inc., KKR Group Partnership L.P. and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on August 7, 2025). | |
4.74 | Form of 5.100% Senior Note due 2035 (included within Exhibit 4.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on August 7, 2025). | |
10.1 | Fourth Amended and Restated Limited Partnership Agreement of KKR Group Partnership L.P., dated August 6, 2024 (incorporated by reference to Exhibit 10.5 to the KKR & Co. Inc. Current Report on Form 8-K filed on August 9, 2024). | |
10.2 | Registration Rights Agreement dated July 14, 2010, by and among KKR & Co. L.P., KKR Holdings L.P. and the persons from time to time party thereto (incorporated by reference to Exhibit 10.2 to the KKR & Co. Inc. Current Report on Form 8-K filed on July 20, 2010). | |
10.3 | * | Amended and Restated KKR & Co. Inc. 2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 19, 2021). |
10.4 | Tax Receivable Agreement, dated as of July 14, 2010, among KKR Holdings L.P., KKR Management Holdings Corp., KKR & Co. L.P., KKR Management Holdings, L.P., and other persons who executed a joinder thereto (incorporated by reference to Exhibit 10.3 to the KKR & Co. Inc. Current Report on Form 8-K filed on July 20, 2010). | |
10.5 | Amendment to Tax Receivable Agreement, dated as of May 3, 2018, among KKR Holdings L.P., KKR Management Holdings Corp., KKR & Co. L.P., KKR Management Holdings L.P. and KKR Group Holdings Corp. (incorporated by reference to Exhibit 10.1 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on May 8, 2018). | |
10.6 | Amendment No. 2 to Tax Receivable Agreement, dated as of May 30, 2022, among KKR Holdings L.P., KKR Holdings (AIV) L.P., KKR & Co. Inc. and KKR Group Holdings Corp. (incorporated by reference to Exhibit 10.1 to the KKR & Co. Inc. Current Report on Form 8-K12B filed on May 31, 2022). |
10.7 | Third Amended and Restated Credit Agreement, dated as of July 3, 2024, among Kohlberg Kravis Roberts & Co. L.P., KKR Group Partnership L.P., the guarantors party thereto from time to time, the lenders party thereto from time to time, and HSBC Bank USA, National Association, as administrative agent (incorporated by reference to Exhibit 10.4 to the KKR & Co. Inc. Current Report on Form 8-K filed on August 9, 2024). | |
10.8 | † | Fourth Amended and Restated 5-Year Revolving Credit Agreement, dated as of April 4, 2024, among KKR Capital Markets Holdings L.P., certain subsidiaries of KKR Capital Markets Holdings L.P., Mizuho Bank, Ltd., as administrative agent, and the one or more lenders party thereto (incorporated by reference to Exhibit 10.1 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on May 9, 2024). |
10.9 | † | Credit Agreement, dated as of May 7, 2024, among Global Atlantic Limited (Delaware), Global Atlantic (Fin) Company, the guarantors party thereto from time to time, the lenders from time to time party thereto, Wells Fargo Bank, N.A., as administrative agent, and the other agents and arrangers party thereto (incorporated by reference to Exhibit 10.3 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on May 9, 2024). |
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10.10 | Form of Indemnification Agreement for Directors of KKR & Co. Inc. (incorporated by reference to Exhibit 10.15 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 29, 2024). | |
10.11 | Indemnification Agreement, dated as of May 3, 2018, between KKR & Co. L.P. and KKR Management LLP, formerly KKR Management LLC (incorporated by reference to Exhibit 10.6 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on May 8, 2018). | |
10.12 | * | Form of Grant Certificate (Executive Officers) (incorporated by reference to Exhibit 10.23 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 23, 2018). |
10.13 | * | Form of Public Company Holdings Unit Award Agreement of KKR & Co. L.P. (Executive Officers) (Market Price Vesting) (incorporated by reference to Exhibit 10.24 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 23, 2018). |
10.14 | * | Form of Public Company Holdings Unit Award Agreement of KKR & Co. L.P. (Executive Officers) (Service Vesting) (incorporated by reference to Exhibit 10.25 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 23, 2018). |
10.15 | * | Form of Restricted Stock Unit Agreement of KKR & Co. Inc. (Directors) (incorporated by reference to Exhibit 10.21 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 29, 2024). |
10.16 | * | Form of Cliff Vesting Dollars-At-Work Grant Certificate of KKR Associates Holdings L.P. (incorporated by reference to Exhibit 10.22 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 28, 2022). |
10.17 | * | Form of Pro Rata Vesting Dollars-At-Work Grant Certificate of KKR Associates Holdings L.P. (incorporated by reference to Exhibit 10.23 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 28, 2022). |
10.18 | * | Form of Pro Rata Vesting Dollars-At-Work Grant Certificate of KKR Associates Holdings L.P. (incorporated by reference to Exhibit 10.24 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 27, 2023). |
10.19 | * | Form of Restricted Holdings Unit Agreement of KKR & Co. Inc. (Executive Officers) (Market Condition). (incorporated by reference to Exhibit 10.24 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 28, 2022). |
10.20 | * | Form of Restricted Holdings Unit Agreement of KKR & Co. Inc. (Executive Officers) (Market Condition) (incorporated by reference to Exhibit 10.26 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 27, 2023). |
10.21 | * | Form of Restricted Holdings Unit Agreement of KKR & Co. Inc. (Executive Officers) (Market Condition) (incorporated by reference to Exhibit 10.27 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 27, 2023). |
10.22 | * | Form of Restricted Holdings Unit Agreement of KKR & Co. Inc. (Executive Officers) (Service Vesting) (incorporated by reference to Exhibit 10.28 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 27, 2023). |
10.23 | * | Form of Restricted Holdings Unit Agreement of KKR & Co. Inc. (Executive Officers) (Market Condition) (incorporated by reference to Exhibit 10.29 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 29, 2024). |
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10.24 | * | Form of Restricted Holdings Unit Agreement of KKR & Co. Inc. (Executive Officers) (Service Condition) (incorporated by reference to Exhibit 10.30 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 29, 2024). |
10.25 | * | Form of Unit Grant Certificate of KKR Holdings L.P. (Co-Chief Executive Officer) (incorporated by reference to Exhibit 10.25 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 28, 2022). |
10.26 | * | Form of Restricted Holdings Unit Agreement of KKR & Co. Inc. (Co-Chief Executive Officer) (incorporated by reference to Exhibit 10.26 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 28, 2022). |
10.27 | * | Form of K-Series Unit Certificate of KKR Associates K-Series Holdings L.P. |
10.28 | † | Credit Agreement, dated as of January 16, 2026, among Global Atlantic Limited (Delaware), Global Atlantic (Fin) Company, the borrowers party thereto, the lenders from time to time party thereto, Wells Fargo Bank, N.A., as administrative agent, and the other agents and arrangers party thereto. |
19.1 | Policies and Procedures for Trading in Securities of KKR & Co. Inc. by Directors, Section 16 Officers and Employees (incorporated by reference to Exhibit 19.1 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 28, 2025). | |
21.1 | Subsidiaries of the Registrant. | |
22.1 | Description of Subsidiary Guarantor and Subsidiary Issuers (incorporated by reference to Exhibit 22.1 to the KKR & Co. Inc. Quarterly Report on Form 10-Q filed on November 7, 2025). | |
23.1 | Consent of Independent Registered Public Accounting Firm Relating to the Financial Statements of KKR & Co. Inc. | |
31.1 | Certification of Co-Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Co-Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.3 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.3 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
97.1 | KKR & Co. Inc. Incentive Compensation Clawback Policy (incorporated by reference to Exhibit 97.1 to the KKR & Co. Inc. Annual Report on Form 10-K filed on February 29, 2024). | |
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101 | Interactive data files pursuant to Rule 405 of Regulation S-T, formatted in Inline XBRL: (i) the Consolidated Statements of Financial Condition as of December 31, 2025 and December 31, 2024, (ii) the Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023, (iii) the Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025, 2024 and 2023, (iv) the Consolidated Statements of Changes in Equity for the years ended December 31, 2025, 2024 and 2023 (v) the Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023, and (vi) the Notes to the Consolidated Financial Statements. | |
104 | Cover page interactive data file, formatted in Inline XBRL and contained in Exhibit 101. |
*Management contract or compensatory plan in which directors and/or executive officers are eligible to participate.
† Certain information contained in this agreement has been omitted because it is not material and is the type that the registrant treats as private or
confidential.
The registrant hereby agrees to furnish to the SEC at its request copies of long-term debt instruments defining the rights of
holders of outstanding long-term debt that are not required to be filed herewith.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or
other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not
rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other
documents were made solely within the specific context of the relevant agreement or document and may not describe the
actual state of affairs as of the date they were made or at any other time.
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FINANCIAL STATEMENT SCHEDULES
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | |||||||
Valuation Allowance for Deferred Tax Assets | |||||||
(in thousands) | |||||||
Asset Management and Strategic Holdings | |||||||
Balance at Beginning of Period | Tax Valuation Allowance (Charged) / Credited to Income Tax Provision | Tax Valuation Allowance (Charged) / Credited to Balance Sheet | Balance at End of Period | ||||
Year Ended: | |||||||
December 31, 2023 | $ | $ | $ | $ | |||
December 31, 2024 | $ | $ | $ | $ | |||
December 31, 2025 | $ | $( | (1) | $ | $( | ||
(1) A valuation allowance has been recorded for deferred tax assets related to State credit carryforwards that are not considered to be more likely than not realized prior to their expiration. | |||||||
Insurance | |||||||
Balance at Beginning of Period | Tax Valuation Allowance (Charged) / Credited to Income Tax Provision | Tax Valuation Allowance (Charged) / Credited to Balance Sheet | Balance at End of Period | ||||
Year Ended: | |||||||
December 31, 2023 | $( | $ | $ | $( | |||
December 31, 2024 | $( | $ | $( | (2) | $( | ||
December 31, 2025 | $( | $( | $ | $( | |||
(2) On January 2, 2024, Global Atlantic became subject to Bermuda CIT and resulted in the establishment of a $ available-for-sale securities, which was offset by a full valuation allowance. As of December 31, 2024, a valuation allowance of $ the deferred tax assets associated with Bermuda CIT. | |||||||
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Insurance | |||||||||||||
Year Ended December 31, 2025 | |||||||||||||
Additions | |||||||||||||
Balance at Beginning of Period | Charged to Costs and Expenses | Assumed | Recoveries | Deductions | Charge-off | Balance at End of Period | |||||||
Reserves Deducted from Assets to Which They Apply: | |||||||||||||
Credit Loss Allowance on Available-for-sale Securities | $ | $ | $ | $ | $( | $( | $ | ||||||
Credit Loss Allowance on Loans | ( | ||||||||||||
Credit Loss Allowance on Unfunded Commitments and Letters of Credit | |||||||||||||
Credit Loss Allowance on Reinsurance Recoverables | |||||||||||||
Year Ended December 31, 2024 | |||||||||||||
Additions | |||||||||||||
Balance at Beginning of Period | Charged to Costs and Expenses | Assumed | Recoveries | Deductions | Charge-off | Balance at End of Period | |||||||
Reserves Deducted from Assets to Which They Apply: | |||||||||||||
Credit Loss Allowance on Available-for-sale Securities | $ | $ | $ | $ | $( | $( | $ | ||||||
Credit Loss Allowance on Loans | ( | ||||||||||||
Credit Loss Allowance on Unfunded Commitments and Letters of Credit | ( | ||||||||||||
Credit Loss Allowance on Reinsurance Recoverables | ( | ||||||||||||
Year Ended December 31, 2023 | |||||||||||||
Additions | |||||||||||||
Balance at Beginning of Period | Charged to Costs and Expenses | Assumed | Recoveries | Deductions | Charge-off | Balance at End of Period | |||||||
Reserves Deducted from Assets to Which They Apply: | |||||||||||||
Credit Loss Allowance on Available-for-sale Securities | $ | $ | $ | $ | $( | $( | $ | ||||||
Credit Loss Allowance on Loans | ( | ||||||||||||
Credit Loss Allowance on Unfunded Commitments | ( | ||||||||||||
Credit Loss Allowance on Reinsurance Recoverables | ( | ||||||||||||
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SCHEDULE IV—REINSURANCE | |||||||||
As of December 31, 2025 | |||||||||
($ in thousands) | Gross Amount | Ceded to Other Companies | Assumed from Other Companies | Net Amount | Percentage of Amount Assumed to Net | ||||
Life Insurance In-force | $ | $( | $ | $ | |||||
Premiums and Other Considerations: | |||||||||
Premiums | $ | $( | $ | $ | |||||
Policy Fees | $ | $( | $ | $ | |||||
As of December 31, 2024 | |||||||||
($ in thousands) | Gross Amount | Ceded to Other Companies | Assumed from Other Companies | Net Amount | Percentage of Amount Assumed to Net | ||||
Life Insurance In-force | $ | $( | $ | $ | |||||
Premiums and Other Considerations: | |||||||||
Premiums | $ | $( | $ | $ | |||||
Policy Fees | $ | $( | $ | $ | |||||
As of December 31, 2023 | |||||||||
($ in thousands) | Gross Amount | Ceded to Other Companies | Assumed from Other Companies | Net Amount | Percentage of Amount Assumed to Net | ||||
Life Insurance In-force | $ | $( | $ | $ | |||||
Premiums and Other Considerations: | |||||||||
Premiums | $ | $( | $ | $ | |||||
Policy Fees | $ | $( | $ | $ | |||||
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: | February 27, 2026 | ||
KKR & CO. INC. | |||
/s/ ROBERT H. LEWIN | |||
Name: | Robert H. Lewin | ||
Title: | Chief Financial Officer | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||
/s/ HENRY R. KRAVIS | Co-Executive Chairman, Director | February 27, 2026 | ||
Henry R. Kravis | ||||
/s/ GEORGE R. ROBERTS | Co-Executive Chairman, Director | February 27, 2026 | ||
George R. Roberts | ||||
/s/ JOSEPH Y. BAE | Director, Co-Chief Executive Officer | February 27, 2026 | ||
Joseph Y. Bae | (principal executive officer) | |||
/s/ SCOTT C. NUTTALL | Director, Co-Chief Executive Officer | February 27, 2026 | ||
Scott C. Nuttall | (principal executive officer) | |||
/s/ CRAIG ARNOLD | Director | February 27, 2026 | ||
Craig Arnold | ||||
/s/ TIMOTHY R. BARAKETT | Director | February 27, 2026 | ||
Timothy R. Barakett | ||||
/s/ ADRIANE M. BROWN | Director | February 27, 2026 | ||
Adriane M. Brown | ||||
/s/ MATTHEW R. COHLER | Director | February 27, 2026 | ||
Matthew R. Cohler | ||||
/s/ MARY N. DILLON | Director | February 27, 2026 | ||
Mary N. Dillon | ||||
/s/ ARTURO GUTIÉRREZ HERNÁNDEZ | Director | February 27, 2026 | ||
Arturo Gutiérrez Hernández | ||||
/s/ XAVIER B. NIEL | Director | February 27, 2026 | ||
Xavier B. Niel | ||||
/s/ KIMBERLY A. ROSS | Director | February 27, 2026 | ||
Kimberly A. Ross | ||||
/s/ PATRICIA F. RUSSO | Director | February 27, 2026 | ||
Patricia F. Russo | ||||
/s/ ROBERT W. SCULLY | Director | February 27, 2026 | ||
Robert W. Scully | ||||
/s/ EVAN T. SPIEGEL | Director | February 27, 2026 | ||
Evan T. Spiegel | ||||
/s/ ROBERT H. LEWIN | Chief Financial Officer (principal financial and accounting officer) | February 27, 2026 | ||
Robert H. Lewin |
FAQ
What is KKR (KKR) describing in its latest Form 10-K?
KKR’s Form 10-K describes its global alternative asset management, insurance, and capital markets businesses, including strategy, structure, and key metrics. It explains how the firm earns fees, invests alongside clients, manages risk, and organizes operations across private equity, credit, real assets, insurance, and Strategic Holdings.
How much assets under management does KKR (KKR) report for 2025?
KKR reports $744 billion in assets under management as of December 31, 2025. This includes $229 billion in Private Equity, $192 billion in Real Assets, $322 billion in Credit and Liquid Strategies, and $219 billion contributed by its Global Atlantic insurance business, reflecting significant platform scale and diversification.
How does KKR (KKR) generate its management and fee revenues?
KKR earns recurring management fees and performance-based fees from investment vehicles it manages, plus transaction, monitoring, and capital markets fees. In 2025, management fees totaled $4.1 billion, while capital markets transaction fees reached $930 million, driven by arranging financings and underwriting or placing securities for clients.
What role does Global Atlantic play in KKR’s (KKR) business?
Global Atlantic operates KKR’s insurance business, providing retirement and life products and reinsurance solutions. It contributed $219 billion of KKR’s $744 billion AUM in 2025. KKR now owns 100% of Global Atlantic and uses it alongside third-party vehicles to deploy capital into insurance-related opportunities and support new business volumes.
What is KKR’s (KKR) Strategic Holdings segment?
Strategic Holdings is a segment that owns interests in operating companies held long term, primarily related to KKR’s core private equity strategy. As of December 31, 2025, it included stakes in 19 companies, generating income mainly through dividends and realized gains, while paying management and performance fees to KKR’s Asset Management segment.
How many employees does KKR (KKR) have and where are they focused?
KKR employed 5,043 people worldwide as of December 31, 2025. About 2,705 work in asset management, 1,491 in insurance, and 847 in subsidiary organizations. The firm emphasizes a one-firm culture, equity-based compensation, and extensive training to attract, develop, and retain talent across its global offices and strategies.
What key risks does KKR (KKR) highlight for investors?
KKR highlights risks from market and economic conditions, regulatory changes, technology and cybersecurity, competition, liquidity management, complex investment activities, insurance regulation, and its organizational structure. The summary risk factors span business, regulatory, investment, insurance, and governance-related risks that could materially affect results and cash flows.
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