KKR & Co. Inc.

Overall business momentum within this channel continues to feel very good as well. Global Atlantic AUM pro forma for the MetLife block now totals $158 billion. This is up from $72 billion or over two times since the announcement of our acquisition in July of 2020. In our view, this really demonstrates the strength of GA's franchise, the power of the KKR-GA partnership, as well as the high level of execution we've seen since the outset. So back to our P&L. In aggregate, after-tax distributable earnings totaled $780 million, or $0.88 per share. Next, just turning to page 7 of our earnings release, you see investment performance summarized for the quarter, as well as the trailing 12-month periods. Looking at the figures on the page for the third quarter, our performance metrics broadly compare very favorably relative to public indices, which were mixed in the quarter. The traditional private equity portfolio was up five in the quarter and over the 12 months is up 12%. And looking at our inception to date blended IRR for our most recent flagship funds, that figure continues to stay strong at 23%. In real assets, the real estate portfolio was up 1% for the quarter and down 9% over the last 12 months. Importantly, underlying NOI growth has remained strong across our portfolios, so the decline you see over the trailing 12 months reflects the change in interest rates as well as cap rate assumptions. Infrastructure was up 3% in the quarter and is up 14% over the last 12 months, as this asset class has continued to be resilient for us. In credit, the leveraged and alternative composites were both up 3% in the quarter and 14% and 9% respectively over the last 12 months. And turning for a moment to page 25, our core private equity portfolio has performed. Today, we are the largest manager of core PE capital with $35 billion of AUM, which includes third-party capital alongside of our balance sheet. And as you can see on the page, the fair value of investments we've made off the balance sheet at 930 was $6.5 billion. As a reminder, core PE is a long-duration investment strategy. We expect to hold these investments for 10 to 15 plus years. These investments generally have lower leverage over their whole periods compared to traditional PE and are more cash generative. The portfolio at this point is global, spans a wide range of industries, so we've continued to see strong growth in a portfolio that in our view is more stable and less cyclical in nature, which has really helped during periods of dislocation, such as the early stages of COVID, as well as over the last 12 to 18 months. We got into this asset class and it really treated it as a strategic growth avenue for us since we started, because it's an area where we firmly believed that our business model, including our industry depth, geographic breadth, collaborative culture, and ability to drive business building all set us up very well to be the best global player in the asset class. We're big believers in the earnings power this strategy can create, and we continue to think about how to unlock that potential. And with that summary, I'll turn the call over to Rob.

Thanks a lot, Craig. I thought it'd be helpful this morning to go through what we are experiencing across the firm day to day. Despite what has been a dynamic operating environment, we find ourselves with a significant amount of momentum, especially across our key strategic growth areas. We are seeing a noticeable uptick in our pipelines around fundraising, deployment, and monetizations, and I'll take you through each today. Turning first to fundraising. This quarter, we raised $14 billion, bringing the past 12 months to $54 billion. While the fundraising environment has been tough, we feel as though we're positioned very differently than a number of our peers. None of the $54 billion that we have raised over the LTM period has come from our flagship strategies, which are due to begin fundraising in the next year or so. Global Atlantic continues to have a lot of success in this rate environment and remains incredibly well positioned. Across our private wealth strategies, While still early, our momentum is strong. And our conviction around the size of the addressable market and our ability to take share continue to grow. And in the framework of KKR, this is really all upside for us from here. Finally, many of our younger strategies continue to scale. Looking at the quarter in a bit more detail. First, our K-Series suite of products. As a reminder, these primarily serve the private wealth and market globally. providing individuals with access to alternative investments that traditionally have not been accessible to non-institutional clients. We now have vehicles for all four of our major asset classes, private equity, infrastructure, real estate, and credit, and we continue to be added to more private wealth platforms as these vehicles ramp. Two years ago, we were on approximately 10 platforms, and today that number is closer to 40 across the suite of products that we manage, with more to come. Looking at our private equity and infrawealth products specifically, they are now raising approximately $500 million a month. It's a really strong start for us, especially relative to our expectations, only reinforcing our confidence in the scale and impact of the long-term opportunity here. Second, we raised $8 billion of capital in credit and liquid strategies in the quarter, and we were particularly active in private credit. As a reminder, private credit is comprised of our direct lending, and our asset-based finance businesses, where AUM has scaled significantly. Today, in total, private credit AUM is $83 billion. That's up roughly three times from $25 billion just three years ago. In direct lending, where we have $36 billion of assets under management, you're seeing us raise capital in a variety of forms. In the quarter, we raised capital for our U.S.-focused strategy in traditional fund format, and through evergreen structures in both the US as well as in Europe. We're seeing more interest in these perpetual vehicles as the asset class has become more mature and a more permanent part of institutions' allocations. And we're at the outset of fundraising for our private BDC and continue to raise capital in our separately managed accounts. In asset-based finance, we're continuing to build on our leadership position here. ABF is now close to $50 billion of AUM as of 930. We are raising capital in a variety of forms, including closed-end and open-ended fund structures in both our high-grade and opportunistic ABF strategies. There will be more to come here in future quarters, as interest in both direct lending and ABF remains very high. This all really builds on the back of strong performance within our leverage credit business, with many of our investment strategies ranking at the top of their respective peer categories. As an example, our investment returns in both our opportunistic leverage credit strategy and our multi-asset credit strategy rank in the top one percentile against their peer universes since their inception in 2008. And the third area on fundraising I wanted to address were some of the more recent announcements that happened post-930. We held a final close in Next Generation Technology III at approximately $3 billion. That represents an over 30% increase to its predecessor fund. Global Impact Fund 2. This is our growth equity platform, investing behind proven companies that deliver scalable commercial solutions to global problems. Also held its final closed post quarter end, totaling $2.8 billion, which is over twice the size of its predecessor fund. And Asia Infrastructure 2. We have already raised $6.1 billion of capital here, making it the largest dedicated infra fund in the region, and up from the $3.8 billion predecessor fund. And we have not yet held the final close. This is another sizable platform that we have added to our infrastructure franchise and I think further cements our leadership position in Asia more broadly. These three funds in aggregate have increased from $7 billion across their prior vintages to approximately $12 billion of total capital today. This is all very high margin AUM for us and in strategies that are still relatively young for KKR. As we looked at 2024 and 2025, we expect fundraising at KKR will accelerate relative to the last 12 months. We have 30 plus strategies and are coming to market, including a number of flagships such as global infrastructure, America's private equity and Asia private equity, with the opportunity for continued scaling in our private wealth products alongside the traditional fund format. We are also launching a new climate investing strategy. We have recruited a really talented and experienced team which is now fully integrated into a broader infrastructure platform, giving us confidence that we can become a real leader and a skilled player in the space. Moving next to deployment. We continue to be very constructive on risk-reward here across a number of our asset classes. We have about $100 billion of dry powder available to deploy, and we've seen an uptick in announced investment activity since June. However, only a small portion of that closed in the 90 days ended September 30th. we do expect an increase in investment activity in Q4 given our pipelines here. This dynamic should help the invested capital figures in addition to our capital markets revenues in Q4. And finally, our monetization activity has continued to pick up. In the quarter, our realized performance and investment income totaled $560 million. Activity in the quarter came from a wide variety of strategies and products. And as we look into the fourth quarter, Standing here today, we currently have visibility on 400-plus million of monetization-related revenue. One of the realizations in Q4 is from our investment in Kokusai Electric. Kokusai is a Japan-based manufacturer of semiconductor production equipment. We invested in the business back in December of 2017 through our Asia private equity platform. It is one of the three Carvo transactions where we've collaborated with the Hitachi Group. You've heard us talk about Japanese carve-outs as a key investment theme a number of times on these calls. Given our operational skills together with our relationships in the region, we feel particularly well positioned to pursue these investments. This is just the latest example for us. At the end of October, Kokusai was listed on the Tokyo Stock Exchange in the largest IPO in Japan since 2018 and the largest ever private equity-backed IPO. The stock has performed well since pricing, trading up approximately 35% and based on last week's closing price, our total investment is now marked at over 15 times multiple money on a gross basis. We continue to own 40% of the company. In addition to the positive outcome for our Asia private equity investors, the IPO also helps our branding across everything that we do in Japan and likely as a result also creates more opportunity as we distribute case series products in this market. Turning to the firm as a whole, we still have 11 plus billion of embedded gains between our investments and carried interest. So the future around monetization-related revenue remains robust. This is compared to 9 billion of embedded gains at the beginning of the year. So we're up roughly 25% in what has been a volatile environment, while at the same time having monetized a healthy amount of that embedded gain since 1231. As you can hear, we continue to be really excited as a management team about our growth and our evolution. We have been executing on our plan of building a very high growth and high margin asset management business, which benefits from and is accelerated by what we are doing across insurance and core private equity. With that, Scott Craig and I are happy to take your questions.

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. So that we may address questions to as many participants as possible, we ask that you please limit yourself to one question. If you have additional questions, you may then re-queue, and time permitting, those questions will be addressed. One moment, please, while we poll for questions. Thank you. And the first question is from the line of Craig Siegenthaler with Bank of America. Pleased to see you with your question.