KKR & Co. Inc.

Fee-related compensation, as usual, was at the midpoint of our guided range at 22.5% of fee-related revenues for the quarter as well as for the year. Other operating expenses were $156 million. So in total, fee-related earnings were $675 million, or $0.76 per share. As I mentioned just a moment ago, this was a record FRE quarter for us. And this growth really highlights in our view the continued strength as well as the diversification that you're seeing across the firm. Our FRE margin in the quarter came in at 63%, and on a per share basis, FRE was $2.68 for the year. Turning now to realization activity. For the quarter, we generated $411 million of realized performance income. This was driven by multiple successful sales across our traditional private equity and core businesses with realized incentives driven by Marshall Waste in the fourth quarter. Realized investment income in the quarter was $147 million. So together, monetizations were $558 million. In total, asset management operating earnings were $970 million. Moving to our insurance segment, performance continued to be strong in the quarter, with $231 million of pre-tax earnings. That's up 10% quarter over quarter. This was the result of stronger net inflows across both the institutional and individual channels, as well as variable investment income from the sale of a solo developer that generated $16 million of insurance segment pre-tax operating earnings. So in total, after-tax DE was $888 million, or $1 per share. In comparison with the prior quarter, that figure was up 14%. Next, turning to investment performance, you can see this on page seven of the earnings release. The private equity portfolio appreciated 3% in the quarter and 16% in the year. In real assets, the opportunistic real estate portfolio was down one in the quarter and down two for the year. Infrastructure was up 5% in the quarter and up 18% for the year. So very strong broad performance across our infrastructure platforms. And in credit, the leveraged credit composite was up three and the alternative credit composite was up 2%. And over the year, performance year was up 14 and 10% respectively. And finally, consistent with our historical practice, we are intending to increase our annual dividend from 66 cents to 70 cents per share, which we anticipate will go into effect alongside first quarter 2024 earnings. And with that, I'm pleased to turn the call over to Rob.

Thanks a lot, Craig, and good morning, everyone. First, looking at our key operating metrics. New capital raised total $31 billion for the quarter. These results are quite strong and encouraging for us as we head into 2024. Credit and liquid strategies made up about two-thirds of the capital we raised this quarter, as our business has grown with Global Atlantic as a significant partner. GA in particular had record inflows in the quarter, both overall and specifically from the individual channel. So activity here continues to be very strong. Block activity at GA is also active. As you know, the MetLife block closed in the quarter, and the Manulife block transaction is expected to close sometime in the first half of 2024. And similar to prior blocks, GA continues to be very capital efficient here. contributing approximately 25% of the equity in both transactions, with 75% of the capital coming from IV vehicles and additional co-investors. So 75% from third parties where we can earn management fees and have the opportunity for performance income as well. Over the past year, new capital raised totaled right around $70 billion. And looking post-1231, we just announced the final close in Asia Infrastructure II at approximately $6.4 billion. over 65% larger than the previous fund. Of note, more than half of the capital came from new investors to the Asia infrastructure platform. With this successful fundraise, we are clearly the largest infrastructure fund in the region, enhancing our Asia positioning more broadly. And as we look out over the next 12 months and into 2025, a number of our flagship funds will be raising capital as well. so we continue to expect an acceleration in our fundraising from here. Turning to Capital Invested, we've deployed $16 billion in the quarter and $44 billion for the year. Capital Invested was really diversified across private equity, real assets, and credit and liquid strategies in the year, as U.S. private equity and core private equity deployment rebounded in the quarter. Of particular note, we made investments in three TIC private transactions in Q4. And with almost $100 billion of uncalled capital, we continue to be well positioned for the deployment opportunities that are ahead. I wanted to briefly shift now to a reflection on our progress through the course of 2023. Our assets under management now total $553 billion. That's up 10% compared to the end of 2022, with sizable capital raised in the past year. Fee paying AUM now stands at almost $450 billion. Given our consistent growth in fee-paying AUM, management fees increased 14% in 2023, with line of sight of future growth from approximately $40 billion of committed capital that becomes fee-paying as it's invested or when it enters its investment period. And that's at a weighted average rate of just over 90 basis points. And while realized performance and investment income was more muted in 2023, given the environment, our forward visibility has increased meaningfully year over year. Total embedded gains were $12.3 billion at year end. That reflects embedded gains on our balance sheet plus gross unrealized carried interest. This was up almost 40% compared to Q4 of 2022. The opportunity for future investing revenue remains robust. And strategically, we made a lot of progress in 2023. As you likely know, we announced four key initiatives towards the end of November. As an update, On January 2nd, we closed our acquisition of the remaining stake in Global Atlantic for approximately $2.6 billion in cash. We believe this acquisition will create more value for policyholders and shareholders and are excited to unlock future potential together. Concurrent with the closing of GA, we have created a new strategic holding segment, which you will see in our Q1 2024 earnings release. Here, the segment operating earnings will be driven by cash dividends from our core PE portfolio. We also revised our compensation ratios, which similarly will be reflected in our Q1 financials, delivering more FRE to our shareholders and driving even more alignment between our compensation model and the outcomes of our clients. Combining these aspects, we will be introducing a new reporting framework that will better highlight our business model. This will include a new financial metric, total operating earnings, which represents our more recurring forms of income. Prior to our next earnings call, we will provide recast financials to help you further understand the various key metrics. As a reminder, we do expect these announcements to be accretive to all of our per share metrics, and together with the confidence and current visibility we have, It is what allowed us to increase our 2026 FRE per share target to $4.50 plus cents per share. In 2023, we generated $2.68 per share of FRE. So our expectation is for a lot of growth from here. Given these four announcements, paired with the existing growth engines we have, we believe that we are well set up to drive meaningful scale. The opportunities we have across asset management, insurance, and strategic holdings are multifold. Turning first to our asset management business, there remains a lot of upside here with multiple drivers of growth. We have a lot of younger strategies that are just beginning to scale. We started 25 or so investing businesses through the past decade alone, and many are now starting to inflect. We are in asset classes and geographies with massive end markets. Asia, infrastructure, including climate, and credit are all great examples. And as a reminder, we only want to be competing in areas with large addressable markets and where we have conviction that we can be a top three player. We are in the early days of tapping into the private wealth end market. We've had early success in our K-Series suite of products with a tremendous amount of opportunity that is still in front of us. With these growth avenues, along with our strong track record, talent, and the trust that we've built with our clients, We feel that we could double our asset management business from here, and that's without starting anything new. Second, we have a meaningful opportunity in insurance with our partnership with Global Atlantic. Insurance is a very powerful contributor to our business. GA has already created a lot of value, going from $72 billion of assets under management at our announcement of the initial transaction in July of 2020, to over $170 billion of assets under management today, including the pending Manulife Block Deal. We have a strong opportunity to unlock even more value together in investing, product development, global expansion, private wealth distribution, and capital markets. And we are still in the very early stages of our partnership. And finally, number three, strategic holdings, where our opportunity is highly differentiated This segment leverages all of our people, capabilities, and our collaborative culture. As a result, we are uniquely positioned to capitalize on what we believe is a huge addressable market. And that's in addition to the current visibility we already have to drive net dividends in this segment of 300 plus million by 2026 and 600 plus million by 2028. In summary, we are incredibly well positioned as a firm. And we really don't think there are many companies in our industry or others that have the type of visibility that we have for long-term growth. We have a high level of confidence that we can meaningfully grow all three of our business segments, asset management, insurance, and strategic holdings. With that, we are excited to announce we are going to host an Investor Day in New York on April 10th. Given the November strategic announcements and all of the opportunities across our firm, We thought it'd be timely for you to hear directly from our senior leaders. We will provide additional detail in the coming months and hope that you will join our broader team as we discuss our outlook and these opportunities. With that, Scott Craig and I are happy to take your questions.

Thank you. We'll now be conducting the question and answer session. If you'd like to ask a question, please press star 1 from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd 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 we may address questions for as many participants as possible. We ask you please limit yourself to one question. If you have additional questions, you may re-queue, and time permitting, those questions will be addressed. One moment, please, while we poll for questions. Thank you. And our first question today will be from the line of Craig Siegenthaler with Bank of America. Please proceed with your question.