KKR & Co. (NYSE:KKR) used its second-quarter earnings call to push back against several of Wall Street’s biggest concerns, saying private credit fundraising is on track for a record year while downplaying worries about private wealth redemptions and AI-driven disruption in software.
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“We expect a record third-party credit fundraising year,” co-CEO Scott Nuttall said, adding that KKR continues to see a significant runway for growth in private credit.
KKR’s Head of Investor Relations Craig Larson pointed to increasing demand from investment-grade borrowers for customized financing, saying issuers are seeking “privately bespoke solutions” that have “really, really catalyzed the growth of the private IG market.”
The firm’s credit platform has expanded rapidly since acquiring Global Atlantic. Executives said credit assets have grown from roughly $80 billion to $300 billion, while annual management fees tied to the business have more than tripled to approximately $1.2 billion.
Management also pushed back on concerns surrounding private wealth, where industry attention has centered on redemption requests from retail investors.
“What you don’t read about in the articles, there’s the inflows,” Nuttall said. He noted that KKR’s private wealth business is up 20% on a net basis year-to-date and 70% over the past 12 months. Roughly 85% of the firm’s K-Series products are invested in private equity and infrastructure, and he said recent market volatility has not altered KKR’s commitment to expanding the business.
Software was another topic management sought to defend, saying investor concerns over AI-driven disruption have become overblown. Software represents about 6% of KKR’s assets under management.
“We sold OneStream, which is a software business, for four and a half times our cost earlier this year,” Nuttall said. “And we’re still seeing high-single-digit last-12-month revenue and EBITDA growth.”
Nuttall argued that many of the market’s biggest concerns — including private credit, private wealth, software exposure, monetizations and fundraising — are inconsistent with what KKR is seeing across its portfolio.
“Our industry is increasingly K-shaped, and most of the external focus is going to be on the unhappy part of the K,” he said. “We find ourselves on the happy part of the K; that’s what’s showing up in the numbers.”
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