- Record Earnings Performance Fee-related earnings of $0.98 per share, total operating earnings of $1.33 per share, and adjusted net income of $1.18 per share, all among the highest in company history.
- Management Fees Growth Management fees rose 18% year-over-year to $996 million, driven by successful fundraising initiatives including Americas XIV.
- Capital Deployment & Pipeline Deployed $37 billion year-to-date, with $115 billion in uncalled capital, reflecting strong liquidity and future deployment potential.
- Insurance & Strategic Holdings Insurance segment operating earnings of $278 million and strategic holdings of $29 million, with 80% of segment earnings from recurring streams.
- Fundraising Momentum Raised $217 billion over the last 2 years, with a $300+ billion target for 2024-2026, driven by strong capital markets activity and strategic initiatives.
Business Segments Performance
KKR's business segments performed well, with the company's insurance segment operating earnings reaching $278 million. The company's strategic holdings operating earnings were $29 million. KKR's alternative credit ecosystem, including asset-based finance, direct lending, and capital solutions, is now larger than the traditional high-yield and leveraged loan markets combined. The company raised $28 billion of capital in Q2, with a final close in the second vintage of its asset-based finance drawdown fund and parallel separately managed accounts, with a total of $6.5 billion in commitments.
Capital Deployment and Fundraising
KKR deployed nearly $37 billion of capital since the start of the year, with around half of that deployed in the second quarter. The company has a healthy pipeline for deployment in the second half of 2025, with $115 billion of uncalled capital. KKR's K-Series AUM was $25 billion across private equity, infrastructure, real estate, and credit as of June 30, up from $11 billion a year ago. The company launched two public private solutions through its strategic partnership with Capital Group and filed a registration statement with the SEC for a public private equity product.
Valuation and Outlook
KKR's valuation multiples are relatively high, with a P/E Ratio of 57.34 and a P/B Ratio of 4.61. However, the company's growth prospects and diversified business model justify its premium valuation. According to Scott Nuttall, "the firm remains very active, with investors returning to 'business as usual' and constructive discussions on multiple fronts and around the world." KKR is on track to generate about $5 of adjusted EPS in 2025, implying 40% earnings growth in 2026 to reach the low end of its target.
Growth Drivers
KKR's growth drivers include its asset-based finance (ABF) business, which grew 20% year-over-year to $75 billion of AUM. The company sees significant opportunities in the current environment, with companies looking to free up capital and go capital-light. KKR's insurance business continues to make progress, with $2.5 billion of funding agreements issued over the last four months, and a $2 billion investment from Japan Post Insurance through a new vehicle managed by Global Atlantic.
Financial Position
KKR's financial position is strong, with $17.1 billion of embedded gains on its balance sheet, which can help scale earnings over the next 12 to 18 months. The company's net debt to EBITDA ratio is 3.86, indicating a manageable debt burden. KKR's ROIC is -0.03, and its ROE is 9.12%, indicating a stable return on equity.