KKR & Co. Inc. (NYSE:KKR) CFO Rob Lewin said the firm is entering 2026 with improving visibility into deal activity, stronger fundraising momentum, and a more diversified earnings base that he believes is not fully reflected in the company’s share price. Lewin made the comments during a UBS conference session hosted by UBS analyst Mike Brown.
Macro outlook and expectations for 2026 activity
Lewin described the current environment as “as nuanced a moment” as he has seen in macro markets, citing the interaction of economic conditions with geopolitics, U.S. domestic politics, fiscal deficits, and public policy. Despite recent market volatility, he said KKR expects activity to increase in 2026, pointing to improving deal flow and monetizations across the industry. He added that KKR’s pipeline heading into 2026 is “definitely a lot better” than it was going into 2025.
Diversification and what Lewin said the market may be missing
Lewin argued that the firm’s diversification is underappreciated, highlighting that KKR generated $4.1 billion of management fees last year, with roughly a third coming from each of its three business lines: private equity, real assets, and credit and liquid strategies. He also emphasized KKR’s global footprint, noting that more than half of its investment professionals are outside the U.S. and pointing to Asia-Pacific as a region where KKR expects a significant share of global GDP growth over the next decade.
Arctos acquisition and KKR’s M&A framework
Lewin said KKR is “incredibly excited” about its acquisition of Arctos and called it a top priority. He framed the deal as consistent with KKR’s strategic M&A approach, including a focus on large addressable markets and building “world-class” capabilities.
He described Arctos as spanning three asset classes:
- Sports, which he said is growing at double-digit rates and where Arctos is a global leader.
- GP Solutions, which he characterized as a large market, noting Arctos is on its first fund and has built momentum despite a difficult fundraising backdrop.
- Secondaries, which he called “probably the largest addressable market,” and where he said combining Arctos’ track record with KKR’s global reach and capital base could create a “right to win.”
Lewin said KKR believes the combined effort could build a “$100+ billion business.” He also emphasized the importance of capital duration in M&A, arguing it is easy to make deals accretive over three to five years but difficult over a 10-year horizon. He said recent transactions—including Franklin Square, Global Atlantic, KJRM in Japan, HCR, and Arctos—share a commonality of being “as close to permanent capital as it gets” in the asset management space. He added that KKR expects origination opportunities to be additive to its insurance capital and said the cultural fit was a key priority, noting KKR’s long-standing relationship with Arctos principal Ian Charles.
Fundraising momentum across institutional, insurance, and wealth
Lewin said KKR raised about $130 billion of capital in 2025 and reiterated a previously stated goal of raising $300 billion between 2024 and 2026. He said the firm is already more than 80% toward that target and expects to “meaningfully exceed” it.
By channel, Lewin said institutional fundraising has been the slowest in recent years but is “opening up.” He cited progress in KKR’s Americas Private Equity Fund (its 14th fund), which he said has raised $19 billion and is larger than its predecessor, and the firm’s global infrastructure product, which he said is north of $16 billion and tracking to exceed the prior fund.
On insurance, Lewin said KKR manages more than $80 billion for third-party insurance clients, which he said is more than triple the level when KKR acquired Global Atlantic five years ago. On private wealth, he said KKR manages more than $35 billion through its “K-Suite” products, up from $18 billion 12 months earlier.
2026 adjusted net income target, insurance strategy, and portfolio positioning
Lewin reiterated KKR’s target of $7+ per share of adjusted net income in 2026, first outlined in 2021 and reaffirmed at an investor day. He said KKR is finalizing a bottoms-up budget and views the target as achievable, with building blocks including management fee growth, expansion in capital markets revenue, performance revenue from K-Suite vehicles, and operating leverage. He said since 2022, KKR has grown management fees by over 50% while operating expenses grew 23%, contrasting that with peers he said have grown expenses faster than management fees.
Lewin also discussed insurance and strategic holdings. He said KKR expects its insurance business to generate approximately $1 billion of operating income in 2026, and said strategic holdings are expected to grow year-on-year at more than 100% and deliver operating earnings above $350 million. For investing earnings, he said KKR enters 2026 with $18.6 billion of embedded gains across carried interest and its investment portfolio, up about 20% year-over-year, and said the firm has visibility into $900+ million of monetization-related revenue from items already completed or signed, compared with $400 million at the same time last year.
On Global Atlantic’s alternative investment strategy, Lewin described a transition from minimal alternatives exposure at acquisition to a greater allocation over time, including decisions related to liability duration and leverage. He said KKR has chosen to “cash account” for alternatives rather than mark-to-market them through the P&L, which he said can create near-term earnings pressure as the firm ramps the portfolio before cash income emerges. He said KKR expects that cash income to begin materializing in 2027 and 2028. For 2026, he said KKR expects roughly $350 million of mark-to-market if assets perform, creating a delta versus operating earnings. Lewin also highlighted scaling third-party capital in insurance, noting $6.5 billion of equity “dry powder” he said could translate into more than $65 billion of additional fee-paying assets for KKR once deployed.
In private wealth, Lewin said KKR’s key performance indicators are centered on client experience and performance rather than capital raising. He also discussed product design changes intended to increase durability, including a two-year soft lock and a withdrawal penalty that he said goes to the vehicle, not KKR. He said KKR’s wealth vehicles invest pari passu with institutional vehicles, aiming to align exposure and outcomes.
Lewin said KKR’s overall exposure to software is about 7% of firmwide AUM and 15% within private equity, and noted the firm has $120 billion of dry powder to invest during dislocations. He also said the firm has invested in digital infrastructure and data centers to support AI adoption, describing a difference between “gross exposure” to software and KKR’s “net exposure” to AI themes.
On private credit, Lewin said KKR has about $135 billion in private credit, split between $85 billion in asset-based finance and $50 billion in direct lending, and said he expects asset-based finance to grow faster. He cited an asset-based finance market he described as “huge,” referenced partnerships including Harley-Davidson, Sallie Mae, and PayPal, and said KKR is leaning away from exposure to stressed consumers, particularly lower FICO segments.
About KKR & Co. Inc. (NYSE:KKR)
KKR & Co Inc is a global investment firm headquartered in New York City that specializes in private markets and alternative asset management. Founded in 1976 by Jerome Kohlberg Jr., Henry Kravis and George R. Roberts, the firm built its reputation in leveraged buyouts and has since expanded into a multi-strategy asset manager. KKR operates across private equity, credit, real assets (including real estate and infrastructure), growth equity and hedge fund strategies, offering a range of investment products and strategies for institutional and private investors.
KKR manages capital through traditional closed-end funds as well as customized vehicles such as separate accounts, co-investments, and listed investment vehicles.
