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What changed in KKR & Co.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of KKR & Co.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+1449 added−1414 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-29)

Top changes in KKR & Co.'s 2024 10-K

1449 paragraphs added · 1414 removed · 1112 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

181 edited+57 added−60 removed189 unchanged
Biggest changePast performance is no guarantee of future results. 19 Table of Contents Amount Fair Value of Investments Private Equity and Real Assets Business Lines Investment Funds and Other Vehicles Commitment (2) Invested Realized (4) Unrealized Total Value Gross IRR (5) Net IRR (5) Gross Multiple of Invested Capital (5) ($ in millions) Total Investments Legacy Funds (1) 1976 Fund $ 31 $ 31 $ 537 $ — $ 537 39.5 % 35.5 % 17.1 1980 Fund 357 357 1,828 — 1,828 29.0 % 25.8 % 5.1 1982 Fund 328 328 1,291 — 1,291 48.1 % 39.2 % 3.9 1984 Fund 1,000 1,000 5,964 — 5,964 34.5 % 28.9 % 6.0 1986 Fund 672 672 9,081 — 9,081 34.4 % 28.9 % 13.5 1987 Fund 6,130 6,130 14,949 — 14,949 12.1 % 8.9 % 2.4 1993 Fund 1,946 1,946 4,143 — 4,143 23.6 % 16.8 % 2.1 1996 Fund 6,012 6,012 12,477 — 12,477 18.0 % 13.3 % 2.1 Subtotal - Legacy Funds 16,475 16,475 50,269 — 50,269 26.1 % 19.9 % 3.1 Included Funds European Fund (1999) 3,085 3,085 8,758 — 8,758 26.9 % 20.2 % 2.8 Millennium Fund (2002) 6,000 6,000 14,123 4 14,127 22.0 % 16.1 % 2.4 European Fund II (2005) 5,751 5,751 8,507 25 8,532 6.1 % 4.5 % 1.5 2006 Fund (2006) 17,642 17,309 37,416 8 37,424 11.9 % 9.3 % 2.2 Asian Fund (2007) 3,983 3,974 8,728 — 8,728 18.9 % 13.6 % 2.2 European Fund III (2008) 5,506 5,360 10,625 39 10,664 16.4 % 11.2 % 2.0 E2 Investors (Annex Fund) (2009) 196 196 200 — 200 0.6 % 0.5 % 1.0 China Growth Fund (2010) 1,010 1,010 1,150 22 1,172 3.8 % 0.1 % 1.2 Natural Resources Fund (2010) 887 887 168 — 168 (24.3) % (25.9) % 0.2 Global Infrastructure Investors (2010) 1,040 1,050 2,228 — 2,228 17.6 % 15.6 % 2.1 North America Fund XI (2012) 8,718 10,044 22,833 3,269 26,102 23.8 % 19.2 % 2.6 Asian Fund II (2013) 5,825 7,357 6,509 2,124 8,633 4.6 % 3.0 % 1.2 Real Estate Partners Americas (2013) 1,229 1,024 1,416 32 1,448 15.8 % 11.0 % 1.4 Energy Income and Growth Fund (2013) 1,589 1,589 1,221 — 1,221 (6.1) % (8.8) % 0.8 Global Infrastructure Investors II (2014) 3,040 3,166 5,330 1,135 6,465 19.7 % 17.0 % 2.0 European Fund IV (2015) 3,512 3,642 5,726 2,625 8,351 23.7 % 18.4 % 2.3 Real Estate Partners Europe (2015) 707 687 763 208 971 12.2 % 9.0 % 1.4 Next Generation Technology Growth Fund (2016) 659 668 1,148 934 2,082 31.0 % 26.4 % 3.1 Health Care Strategic Growth Fund (2016) 1,331 1,317 283 1,863 2,146 19.6 % 13.2 % 1.6 Americas Fund XII (2017) 13,500 12,432 8,722 18,767 27,489 24.9 % 20.4 % 2.2 Real Estate Credit Opportunity Partners (2017) 1,130 1,008 508 991 1,499 9.0 % 7.7 % 1.5 Core Investment Vehicles (2017) 25,444 15,768 2,366 24,323 26,689 18.0 % 16.9 % 1.7 Asian Fund III (2017) 9,000 8,189 6,295 12,018 18,313 29.1 % 22.8 % 2.2 Real Estate Partners Americas II (2017) 1,921 1,951 2,688 428 3,116 25.6 % 21.0 % 1.6 Global Infrastructure Investors III (2018) 7,165 6,335 1,910 7,612 9,522 16.0 % 12.5 % 1.5 Global Impact Fund (2019) 1,242 1,194 471 1,562 2,033 24.9 % 18.5 % 1.7 European Fund V (2019) 6,338 5,670 917 6,947 7,864 14.1 % 10.7 % 1.4 Energy Income and Growth Fund II (2018) 994 1,191 305 1,503 1,808 17.1 % 15.1 % 1.5 Asia Real Estate Partners (2019) 1,682 1,238 22 1,383 1,405 10.3 % 4.6 % 1.1 Next Generation Technology Growth Fund II (2019) 2,088 2,131 496 2,894 3,390 22.3 % 17.4 % 1.6 Real Estate Credit Opportunity Partners II (2019) 950 976 226 928 1,154 9.6 % 7.4 % 1.2 Asia Pacific Infrastructure Investors (2020) 3,792 3,375 738 3,347 4,085 14.4 % 9.9 % 1.2 Asian Fund IV (2020) 14,735 6,554 348 8,324 8,672 18.5 % 11.5 % 1.3 Real Estate Partners Europe II (2020) 2,061 1,656 431 1,313 1,744 3.5 % 0.2 % 1.1 Real Estate Partners Americas III (2021) 4,253 2,771 228 2,584 2,812 0.9 % (1.7) % 1.0 Health Care Strategic Growth Fund II (2021) 3,789 933 — 1,045 1,045 14.6 % (4.9) % 1.1 North America Fund XIII (2021) 18,400 7,837 — 8,830 8,830 10.7 % 6.1 % 1.1 Global Infrastructure Investors IV (2021) (3) 16,589 9,672 328 10,598 10,926 — — — European Fund VI (2022) (3) 7,426 1,574 — 1,263 1,263 — — — Global Impact Fund II (2022) (3) 2,704 815 — 753 753 — — — Asia Pacific Infrastructure Investors II (2022) (3) 6,368 — — — — — — — Next Generation Technology Growth Fund III (2022) (3) 2,745 414 — 417 417 — — — Ascendant Fund (2022) (3) 3,003 — — — — — — — Subtotal - Included Funds 229,029 167,800 164,131 130,118 294,249 16.1 % 12.3 % 1.8 All Funds $ 245,504 $ 184,275 $ 214,400 $ 130,118 $ 344,518 25.5 % 18.7 % 1.9 (1) These funds were not contributed to KKR as part of the acquisition of the assets and liabilities of KKR & Co.
Biggest changePast performance is no guarantee of future results. 19 Table of Contents Amount Fair Value of Investments Private Equity and Real Assets Business Lines Investment Funds and Other Investment Vehicles Commitment (2) Invested Realized (4) Unrealized Total Value Gross IRR (5) Net IRR (5) Gross Multiple of Invested Capital (5) ($ in millions) Total Investments Legacy Funds (1) 1976 Fund $ 31 $ 31 $ 537 $ — $ 537 39.5 % 35.5 % 17.1 1980 Fund 357 357 1,828 — 1,828 29.0 % 25.8 % 5.1 1982 Fund 328 328 1,291 — 1,291 48.1 % 39.2 % 3.9 1984 Fund 1,000 1,000 5,964 — 5,964 34.5 % 28.9 % 6.0 1986 Fund 672 672 9,081 — 9,081 34.4 % 28.9 % 13.5 1987 Fund 6,130 6,130 14,949 — 14,949 12.1 % 8.9 % 2.4 1993 Fund 1,946 1,946 4,143 — 4,143 23.6 % 16.8 % 2.1 1996 Fund 6,012 6,012 12,477 — 12,477 18.0 % 13.3 % 2.1 Subtotal - Legacy Funds 16,475 16,475 50,269 — 50,269 26.1 % 19.9 % 3.1 Included Funds European Fund (1999) 3,085 3,085 8,758 — 8,758 26.9 % 20.2 % 2.8 Millennium Fund (2002) 6,000 6,000 14,129 — 14,129 22.0 % 16.1 % 2.4 European Fund II (2005) 5,751 5,751 8,533 — 8,533 6.1 % 4.5 % 1.5 2006 Fund (2006) 17,642 17,309 37,423 — 37,423 11.9 % 9.3 % 2.2 Asian Fund (2007) 3,983 3,974 8,728 — 8,728 18.9 % 13.7 % 2.2 European Fund III (2008) 5,503 5,360 10,625 21 10,646 16.4 % 11.2 % 2.0 E2 Investors (Annex Fund) (2009) 196 196 200 — 200 0.6 % 0.5 % 1.0 China Growth Fund (2010) 1,010 1,010 1,166 — 1,166 3.7 % — % 1.2 Natural Resources Fund (2010) 887 887 168 — 168 (24.3) % (25.9) % 0.2 Global Infrastructure Investors (2010) 1,040 1,050 2,228 — 2,228 17.6 % 15.6 % 2.1 North America Fund XI (2012) 8,718 10,165 23,097 3,343 26,440 23.5 % 19.0 % 2.6 Asian Fund II (2013) 5,825 7,494 6,694 1,296 7,990 1.9 % 0.4 % 1.1 Real Estate Partners Americas (2013) 1,229 1,024 1,438 7 1,445 15.8 % 10.9 % 1.4 Energy Income and Growth Fund (2013) 1,589 1,589 1,221 — 1,221 (6.2) % (8.6) % 0.8 Global Infrastructure Investors II (2014) 3,039 3,167 5,481 1,130 6,611 19.5 % 16.8 % 2.1 European Fund IV (2015) 3,511 3,644 5,726 2,381 8,107 22.0 % 16.8 % 2.2 Real Estate Partners Europe (2015) 706 690 777 179 956 11.1 % 8.2 % 1.4 Next Generation Technology Growth Fund (2016) 659 670 1,314 950 2,264 30.3 % 25.8 % 3.4 Health Care Strategic Growth Fund (2016) 1,331 1,359 461 1,762 2,223 15.4 % 10.4 % 1.6 Americas Fund XII (2017) 13,500 12,612 14,129 18,278 32,407 25.2 % 20.9 % 2.6 Real Estate Credit Opportunity Partners (2017) 1,130 1,008 594 1,005 1,599 9.2 % 7.8 % 1.6 Core Investment Vehicles (2017) 25,881 16,852 3,213 27,216 30,429 16.6 % 15.6 % 1.8 Asian Fund III (2017) 9,000 8,263 8,294 11,099 19,393 26.1 % 20.5 % 2.3 Real Estate Partners Americas II (2017) 1,921 1,970 2,767 364 3,131 24.5 % 19.9 % 1.6 Global Infrastructure Investors III (2018) 7,161 6,592 3,955 6,521 10,476 14.8 % 11.6 % 1.6 Global Impact Fund (2019) 1,242 1,208 483 1,731 2,214 21.5 % 16.1 % 1.8 European Fund V (2019) 6,354 5,802 2,369 6,257 8,626 12.9 % 9.8 % 1.5 Energy Income and Growth Fund II (2018) 994 1,198 449 1,467 1,916 14.7 % 13.0 % 1.6 Asia Real Estate Partners (2019) 1,682 1,346 216 1,389 1,605 8.8 % 5.0 % 1.2 Next Generation Technology Growth Fund II (2019) 2,088 2,254 913 3,045 3,958 20.5 % 16.2 % 1.8 Real Estate Credit Opportunity Partners II (2019) 950 976 348 921 1,269 10.5 % 7.9 % 1.3 Asia Pacific Infrastructure Investors (2020) 3,792 3,475 1,768 2,994 4,762 15.6 % 11.3 % 1.4 Asian Fund IV (2020) 14,735 7,704 1,212 11,027 12,239 22.0 % 15.5 % 1.6 Real Estate Partners Europe II (2020) 2,056 1,919 431 1,572 2,003 2.1 % (0.5) % 1.0 Real Estate Partners Americas III (2021) 4,253 3,619 319 3,589 3,908 3.9 % 1.8 % 1.1 Health Care Strategic Growth Fund II (2021) 3,789 1,590 — 1,798 1,798 10.2 % 0.5 % 1.1 North America Fund XIII (2021) 18,400 12,431 327 15,441 15,768 15.5 % 10.7 % 1.3 Global Infrastructure Investors IV (2022) 16,567 13,494 443 16,516 16,959 14.8 % 11.0 % 1.3 Asia Pacific Infrastructure Investors II (2022) 6,348 2,081 181 2,351 2,532 31.3 % 18.6 % 1.2 Ascendant Fund (2022) (3) 4,328 1,362 — 1,338 1,338 (1.8) % (10.1) % 1.0 Next Generation Technology Growth Fund III (2022) (3) 2,740 961 — 1,067 1,067 19.4 % (2.8) % 1.1 European Fund VI (2023) (3) 7,360 2,915 — 2,221 2,221 — — — Global Impact Fund II (2023) (3) 2,693 857 — 746 746 — — — Global Infrastructure Investors V (2024) (3) 10,788 — — — — — — — Global Climate Fund (2024) (3) 2,589 — — — — — — — Real Estate Partners Americas IV (2024) (3) 1,928 — — — — — — — Subtotal - Included Funds 245,973 186,913 180,578 151,022 331,600 16.0 % 12.3 % 1.8 All Funds $ 262,448 $ 203,388 $ 230,847 $ 151,022 $ 381,869 25.5 % 18.6 % 1.9 (1) These funds were not contributed to KKR as part of the acquisition of the assets and liabilities of KKR & Co.
We sponsor investment funds that invest in private equity, credit and real assets and have strategic partners that manage hedge funds. Our insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic. Our asset management business offers a broad range of investment management services to fund investors around the world.
We sponsor funds that invest in private equity, credit, and real assets and have strategic partners that manage hedge funds. Our insurance subsidiaries offer retirement, life, and reinsurance products under the management of Global Atlantic. Our asset management business offers a broad range of investment management services to fund investors around the world.
For further information on management fee calculations, see Note 2 "Summary of Significant Accounting Policies" in our financial statements. (3) The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general partner.
For further information on management fee calculations, see Note 2 "Summary of Significant Accounting Policies" in our financial statements. (3) The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general partner.
For further information on management fee calculations, see Note 2 "Summary of Significant Accounting Policies" in our financial statements. (3) The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general partner.
For further information on management fee calculations, see Note 2 "Summary of Significant Accounting Policies" in our financial statements. (3) The commitment represents the aggregate capital commitments to the fund, including capital commitments by third-party fund investors and the general partner.
The information presented below is not intended to be representative of any past or future performance for any particular period other than the period presented below. Past performance is no guarantee of any future result.
The information presented below is not intended to be representative of any past or future performance for any particular period other than the period presented below. Past performance is no guarantee of any future result.
(4) Our alternative credit funds generally have investment periods of two to five years and our newer alternative credit funds generally earn management fees on invested capital throughout their lifecycle. (5) Lower fees on uninvested capital in certain vehicles. (6) Hedge Funds represent KKR's pro rata portion of AUM and FPAUM of our hedge fund partnerships.
(4) Our alternative credit funds generally have investment periods of two to five years and our newer alternative credit funds generally earn management fees on invested capital throughout their lifecycle. (5) Lower fees on uninvested capital in certain investment vehicles. (6) Hedge Funds represent KKR's pro rata portion of AUM and FPAUM of our hedge fund partnerships.
When evaluating the suitability of an investment for our credit vehicles, we typically employ a relative value framework and subject the investment to due diligence.
When evaluating the suitability of an investment for our credit investment vehicles, we typically employ a relative value framework and subject the investment to due diligence.
Credit Vehicles and Fund Structures We pursue leveraged credit and alternative credit investments across a range of vehicles, including investment funds and separately managed accounts, for which we receive a fee and in certain cases an incentive fee or carried interest.
Credit Investment Vehicles and Fund Structures We pursue leveraged credit and alternative credit investments across a range of investment vehicles, including investment funds and separately managed accounts, for which we receive a fee and in certain cases an incentive fee or carried interest.
We also manage structured credit vehicles in the form of CLOs that hold leveraged loans, high-yield bonds or a combination of both. CLOs are typically structured as special purpose investment vehicles that acquire, monitor and, to varying degrees, manage a pool of credit assets.
We also manage structured credit investment vehicles in the form of CLOs that hold leveraged loans, high-yield bonds or a combination of both. CLOs are typically structured as special purpose investment vehicles that acquire, monitor and, to varying degrees, manage a pool of credit assets.
(2) Certain funds and CLOs are subject to a performance fee in which the manager or general partner of the funds share up to 20% of the net profits earned by investors in excess of performance hurdles (generally tied to a benchmark or index) and subject to a provision requiring the funds and vehicles to regain prior losses before any performance fee is earned.
(2) Certain funds and CLOs are subject to a performance fee in which the manager or general partner of the funds share up to 20% of the net profits earned by investors in excess of performance hurdles (generally tied to a benchmark or index) and subject to a provision requiring the funds and investment vehicles to regain prior losses before any performance fee is earned.
Infrastructure We established a dedicated infrastructure team and strategy in 2008, focused on global investment opportunities with an emphasis on investments in assets and businesses located in the member countries of the Organisation for Economic Co-operation and Development. In January 2020, we expanded our strategy to include investment opportunities in the Asia-Pacific region.
Infrastructure We established a dedicated infrastructure team and strategy in 2008, focused on global investment opportunities with an emphasis on investments in assets and businesses located in the member countries of the Organisation for Economic Co-operation and Development (the "OECD"). In January 2020, we expanded our strategy to include investment opportunities in the Asia-Pacific region.
FS/KKR Advisor serves as investment adviser to FS KKR Capital Corp. and KKR FS Income Trust, which are subject to regulations applicable to BDCs under the Investment Company Act, including portfolio construction requirements and limitations on transactions with affiliates. Certain subsidiaries of Kohlberg Kravis Roberts & Co.
FS/KKR Advisor serves as investment adviser to FS KKR Capital Corp., KKR FS Income Trust and KKR FS Income Trust Select, which are subject to regulations applicable to BDCs under the Investment Company Act, including portfolio construction requirements and limitations on transactions with affiliates. Certain subsidiaries of Kohlberg Kravis Roberts & Co.
Global Atlantic believes it has built a strong financial foundation to meet these objectives. Global Atlantic is well capitalized, and its capital position, combined with annual capital generation from its in-force book of business and third-party capital, helps it to fund new business volume growth.
Global Atlantic believes it has built a strong financial foundation to meet these objectives. Global Atlantic is well capitalized, and its capital position, combined with annual capital generation from its seasoned in-force book of business and third-party capital, helps it to fund new business volume growth.
Finally, while the United States federal government in most contexts currently does not directly regulate the insurance business, the Federal Insurance Office (the "FIO") established by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") now has an oversight role in respect to insurance regulation.
Finally, while the United States federal government in most contexts currently does not directly regulate the insurance business, the Federal Insurance Office (the "FIO") established by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") now has an oversight role with respect to insurance regulation.
As an asset management firm, we earn fees, including management fees and incentive fees, and carried interest for providing investment management and other services to our investment vehicles (including our funds), CLOs, managed accounts, portfolio companies and certain operating companies, and we generate transaction fees from capital markets transactions.
As an asset management firm, we earn fees, including management fees and incentive fees, and carried interest for providing investment management and other services to our investment vehicles, CLOs, managed accounts, portfolio companies, and certain operating companies, and we generate transaction fees from capital markets transactions.
Global Atlantic’s proprietary technology platform incorporates analytic models with customized third-party software and database technology, allowing Global Atlantic to dynamically analyze its asset and liability cash flow profile across a range of market and policyholder behavior scenarios.
Global Atlantic’s internal, proprietary technology platform incorporates analytic models with customized third-party software and database technology, allowing Global Atlantic to dynamically analyze its asset and liability cash flow profile across a range of market and policyholder behavior scenarios.
Credit and Liquid Strategies Assets Under Management (1) ($ in billions) (1) AUM of acquired businesses and pro rata AUM of hedge fund partnerships in which KKR has made an investment are included in the years on and after the completion of the respective acquisitions or transactions, as applicable. 23 Table of Contents The table below presents information as of December 31, 2023, relating to our current credit vehicles reported in our Credit and Liquid Strategies business line for which we have the ability to earn carried interest.
Credit and Liquid Strategies Assets Under Management (1) ($ in billions) (1) AUM of acquired businesses and pro rata AUM of hedge fund partnerships in which KKR has made an investment are included in the years on and after the completion of the respective acquisitions or transactions, as applicable. 23 Table of Contents The table below presents information as of December 31, 2024, relating to our current credit investment vehicles reported in our Credit and Liquid Strategies business line for which we have the ability to earn carried interest.
We are also provided with opportunities to invest, in certain strategies where appropriate, in the securities of KKR's private equity portfolio companies, though there are limitations across the platform on the availability and maximum size of such KKR-affiliated investments. 26 Table of Contents Due Diligence and the Investment Decision Once a potential credit investment has been identified, our investment professionals screen the opportunity and make a preliminary determination concerning whether we should proceed with further diligence.
We are also provided with opportunities to invest, in certain strategies where appropriate, in the securities of KKR's private equity portfolio companies, though there are limitations across the platform on the availability and maximum size of such KKR-affiliated investments. 27 Table of Contents Due Diligence and the Investment Decision Once a potential credit investment has been identified, our investment professionals screen the opportunity and make a preliminary determination concerning whether we should proceed with further diligence.
L.P. also serve as investment advisers to publicly listed companies, including KKR Real Estate Finance Trust and Crescent Energy. 41 Table of Contents Regulation as a Broker-Dealer KKR Capital Markets, LLC, one of our subsidiaries, is registered as a broker-dealer with the SEC under the Exchange Act and in 53 U.S. states and territories, and is a member of FINRA.
L.P. also serve as investment advisers to publicly listed companies, including KKR Real Estate Finance Trust and Crescent Energy. 42 Table of Contents Regulation as a Broker-Dealer KKR Capital Markets, LLC, one of our subsidiaries, is registered as a broker-dealer with the SEC under the Exchange Act and in 53 U.S. states and territories, and is a member of FINRA.
Global Atlantic operates in the block reinsurance market by offering solutions to its clients across various sizes of transactions and across multiple product types, including both retirement and life products. In block reinsurance transactions, Global Atlantic’s insurance company subsidiaries assume the obligation to pay the policy benefits from the cedant in exchange for a transfer of assets. • PRT Transactions.
Global Atlantic operates in the block reinsurance market by offering solutions to its clients across various sizes of transactions and across multiple product types, including both retirement and life products. In block reinsurance transactions, Global Atlantic’s insurance company subsidiaries assume the obligation to pay the policy benefits from the cedant in exchange for a transfer of assets. • Flow Reinsurance.
This data does not reflect additional capital raised since December 31, 2023, or acquisitions or disposals of investments, changes in investment values, or distributions occurring after that date. The information presented below is not intended to be representative of any past or future performance for any particular period other than the period presented below.
This data does not reflect additional capital raised since December 31, 2024, or acquisitions or disposals of investments, changes in investment values, or distributions occurring after that date. The information presented below is not intended to be representative of any past or future performance for any particular period other than the period presented below.
For additional information regarding impact of market conditions on the value and performance of our investments, see our "Risk Factors." The table below presents information as of December 31, 2023, relating to the historical performance of certain of our Private Equity and Real Assets investment vehicles since inception, which we believe illustrates the benefits of our investment approach.
For additional information regarding impact of market conditions on the value and performance of our investments, see our "Risk Factors." The table below presents information as of December 31, 2024, relating to the historical performance of certain of our Private Equity and Real Assets investment vehicles since inception, which we believe illustrates the benefits of our investment approach.
Gross management fees for our private equity funds generally range from 1% to 2% of committed capital during the fund's investment period and are generally 0.75% to 1.25% of invested capital after the expiration of the fund's investment period with subsequent reductions over time, which causes the fees to be reduced as investments are liquidated.
Gross management fees for our private equity funds generally range from 1% to 2% of committed capital during the fund's investment period and are generally 0.75% to 1.50% of invested capital after the expiration of the fund's investment period with subsequent reductions over time, which causes the fees to be reduced as investments are liquidated.
The third-party customers of our capital markets business include multi-national corporations, public and private companies, financial sponsors, mutual funds, pension funds, sovereign wealth funds, and hedge funds globally. Our capital markets business provides these third-party clients with differentiated access to capital through our distribution platform. Our capital markets business underwrites credit facilities and arranges loan syndications and participations.
Third-party clients of our capital markets business include multi-national corporations, public and private companies, financial sponsors, mutual funds, pension funds, sovereign wealth funds, and hedge funds globally. Our capital markets business provides these clients with differentiated access to capital through our distribution platform. Our capital markets business underwrites credit facilities and arranges loan syndications and participations.
Foreign currency commitments have been converted into U.S. dollars based on the exchange rate that prevailed on December 31, 2023. (4) The remaining cost represents the initial investment of the general partner and limited partners, reduced for returns of capital.
Foreign currency commitments have been converted into U.S. dollars based on the exchange rate that prevailed on December 31, 2024. (4) The remaining cost represents the initial investment of the general partner and limited partners, reduced for returns of capital.
Our capital markets business also provides syndication services in respect of co-investments in transactions participated in by KKR funds or third-party clients, which may entitle the firm to receive syndication fees, management fees and/or a carried interest.
Our capital markets business also provides syndication services in respect of co-investments in transactions participated in by KKR, our funds, Global Atlantic, and third-party clients, which may entitle the firm to receive syndication fees, management fees, and/or a carried interest.
In addition, you may automatically receive e-mail alerts and other information about our company by enrolling your e-mail address by visiting the "Contacts & Email Alerts" section of our Investor Relations website, available at ir.kkr.com . 45 Tabl e of Contents
In addition, you may automatically receive e-mail alerts and other information about our company by enrolling your e-mail address by visiting the "Contacts & Email Alerts" section of our Investor Relations website, available at ir.kkr.com . 45 Table of Contents
Real Assets Assets Under Management (1) ($ in billions) (1) AUM of acquired businesses are included in the years on and after the completion of the respective acquisitions or transactions, as applicable. 17 Table of Contents The table below presents information as of December 31, 2023, relating to our current real asset and other vehicles reported in our Real Assets business line for which we have the ability to earn carried interest.
Real Assets Assets Under Management (1) ($ in billions) (1) AUM of acquired businesses are included in the years on and after the completion of the respective acquisitions or transactions, as applicable. 17 Table of Contents The table below presents information as of December 31, 2024, relating to our current real asset and other investment vehicles reported in our Real Assets business line for which we have the ability to earn carried interest.
For additional information regarding impact of market conditions on the value and performance of our investments, see "Risk Factors—Risks Related to Our Business—Difficult market and economic conditions can, and periodically do, materially adversely affect KKR." and "Risk Factors—Risks Related to Our Investment Activities—Future results of our investments may be different than, and may not achieve the levels of, any of our historical returns." 25 Table of Contents The table below presents information as of December 31, 2023, based on the investment funds or other vehicles or accounts offered by our Credit and Liquid Strategies business line.
For additional information regarding impact of market conditions on the value and performance of our investments, see "Risk Factors—Risks Related to Our Business—Difficult market and economic conditions can, and periodically do, materially adversely affect KKR" and "Risk Factors—Risks Related to Our Investment Activities—Future results of our investments may be different than, and may not achieve the levels of, any of our historical returns." The table below presents information as of December 31, 2024, based on the investment funds or other investment vehicles or accounts offered by our Credit and Liquid Strategies business line.
We believe that competition for fund investors is based primarily on investment performance, investor liquidity and willingness to invest, investor perception of investment managers' drive, focus and alignment of interest, business reputation, duration of relationships, quality of services, pricing, fund terms including fees, and the relative attractiveness of the types of investments that have been or are to be made.
We believe that competition for investors in our investment vehicles is based primarily on investment performance, investor liquidity and willingness to invest, investor perception of investment managers' drive, focus and alignment of interest, business reputation, duration of relationships, quality of services, pricing, fund terms including fees, and the relative attractiveness of the types of investments that have been or are to be made.
Global Atlantic also participates in the funding agreement market, including through membership in Federal Home Loan Banks ("FHLBs") and as a provider of funding agreements in connection with a funding agreement backed notes ("FABN") program established in 2021. • Block Reinsurance.
Global Atlantic also participates in the funding agreement market, including through membership in Federal Home Loan Banks ("FHLBs") and as a provider of funding agreements in connection with a funding agreement backed notes ("FABN") program established in 2021.
Inc. will become the general partner of Associates Holdings and thereby acquire control of the carry pool on the "Sunset Date" (which will be no later than December 31, 2026 as provided in the Reorganization Agreement; see "Certain Relationships and Related Transactions, and Director Independence" in this report). (3) Includes Kohlberg Kravis Roberts & Co.
Inc. will become the general partner of KKR Associates Holdings L.P. and thereby acquire control of the carry pool on the "Sunset Date" (which will be no later than December 31, 2026 as provided in the Reorganization Agreement; see "Certain Relationships and Related Transactions, and Director Independence" in this report). (3) Includes Kohlberg Kravis Roberts & Co.
We also jointly own with a third party FS/KKR Advisor, LLC, which is an investment adviser registered with the SEC under the Investment Advisers Act. In addition, we own a majority of Global Atlantic's investment adviser, Global Atlantic Investment Advisors, LLC, which is another investment adviser registered with the SEC under the Investment Advisers Act.
We also jointly own with a third party FS/KKR Advisor, LLC, which is an investment adviser registered with the SEC under the Investment Advisers Act. In addition, we own Global Atlantic's investment adviser, Global Atlantic Investment Advisors, LLC, which is another investment adviser registered with the SEC under the Investment Advisers Act.
Also since 2016, we have offered growth equity funds to pursue growth equity investment opportunities in the health care sector, primarily in the United States and Europe. Our health care growth strategy targets opportunities across various health care sub-sectors, including biopharmaceuticals, medical devices, diagnostics, life science tools, health care providers, healthcare information technology and other services. Global Impact.
Since 2016, we have offered growth equity funds to pursue growth equity investment opportunities in the health care sector, primarily in the United States and Europe. Our health care growth strategy targets opportunities across various health care sub-sectors, including biopharmaceuticals, medical devices, diagnostics, life science tools, health care providers, healthcare information technology, and other services.
We therefore have not calculated gross IRRs, net IRRs and gross multiples of invested capital with respect to these funds. 20 Table of Contents (4) An investment is considered realized when it has been disposed of or has otherwise generated disposition proceeds or current income that has been distributed by the relevant fund.
We therefore have not calculated gross IRRs, net IRRs, and gross multiples of invested capital with respect to these funds. (4) An investment is considered realized when it has been disposed of or has otherwise generated disposition proceeds or current income that has been distributed by the relevant fund.
From our inception in 1976 through December 31, 2023, our Private Equity and Real Assets investment funds with at least 24 months of investment activity generated a cumulative gross IRR of 25.5%, compared to the 11.9% and 9.2% gross IRR achieved by the S&P 500 Index and MSCI World Index, respectively, over the same period, despite the cyclical and sometimes challenging environments in which we have operated.
From our inception in 1976 through December 31, 2024, our Private Equity and Real Assets investment funds with at least 24 months of investment activity generated a cumulative gross IRR of 25.5%, compared to the 12.2% and 9.5% gross IRR achieved by the S&P 500 Index and MSCI World Index, respectively, over the same period, despite the cyclical and sometimes challenging environments in which we have operated.
For further information on management fee calculations, see Note 2 "Summary of Significant Accounting Policies" in our financial statements. (2) The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which management fees cease to be paid.
For further information on management fee calculations, see Note 2 "Summary of Significant Accounting Policies" in our financial statements. (2) The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which management fees cease to accrue.
For further information on management fee calculations, see Note 2 "Summary of Significant Accounting Policies" in our financial statements. (2) The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which management fees cease to be paid.
For further information on management fee calculations, see Note 2 "Summary of Significant Accounting Policies" in our financial statements. (2) The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which management fees cease to accrue.
For further information on management fee calculations, see Note 2 "Summary of Significant Accounting Policies" in our financial statements. (2) The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which management fees cease to be paid.
For further information on management fee calculations, see Note 2 "Summary of Significant Accounting Policies" in our financial statements. (2) The end date represents the end of the fund's investment period as defined in the fund's governing documents and is generally not the date upon which management fees cease to accrue.
(3) Duration of capital is measured from inception. Inception dates for CLOs were between 2013 and 2023 and for separately managed accounts and funds investing in alternative credit strategies from 2009 through 2023.
(3) Duration of capital is measured from inception. Inception dates for CLOs were between 2013 and 2024 and for separately managed accounts and funds investing in alternative credit strategies from 2009 through 2024.
Strategic buyers may also be able to achieve synergistic cost savings or revenue enhancements with respect to a targeted portfolio company, which may provide them with a competitive advantage in bidding for such investments. 36 Table of Contents Our capital markets business competes primarily with investment banks and independent broker-dealers in North America, Europe, Asia-Pacific and the Middle East.
Strategic buyers may also be able to achieve synergistic cost savings or revenue enhancements with respect to a targeted portfolio company, which may provide them with a competitive advantage in bidding for such investments. Our capital markets business competes primarily with investment banks and independent broker-dealers in North America, Europe, Asia-Pacific, and the Middle East.
The management fees we are paid for managing RICs are generally subject to contractual rights that require their board of directors to provide prior notice in order to terminate our investment management services . 27 Table of Contents Capital Markets Our Capital Markets business line is comprised of our global capital markets business, which is integrated with KKR’s asset management business lines, and serves our firm, our portfolio companies and third-party customers by developing and implementing both traditional and non-traditional capital solutions for investments or companies seeking financing.
The management fees we are paid for managing RICs are generally subject to contractual rights that require their board of directors to provide prior notice in order to terminate our investment management services . 28 Table of Contents Capital Markets Our Capital Markets business line is comprised of our global capital markets business, which is integrated with KKR’s asset management business line, and serves our firm, including our insurance business, our portfolio companies, and third-party customers by developing and implementing both traditional and non-traditional capital solutions for investments or companies seeking financing.
(2) Carried interest earned from our investment funds is allocated to Associates Holdings, which we refer to as the carry pool, from which carried interest that is earned from our investment funds is allocable to our employees and other persons. This entity and the carry pool are not reflected in the organizational structure chart.
(2) Carried interest earned from our investment funds is allocated to KKR Associates Holdings L.P., which we refer to as the carry pool, from which carried interest that is earned from our investment funds is allocable to our employees and other persons. This entity and the carry pool are not reflected in the organizational structure chart.
Both Commonwealth Annuity and Life Insurance Company ("CwA") and First Allmerica Financial Life Insurance Company ("FAFLIC") are organized and domiciled in the Commonwealth of Massachusetts; Accordia Life and Annuity Company ("Accordia") is organized and domiciled in the State of Iowa; and Forethought Life Insurance Company ("FLIC") is organized and domiciled in the State of Indiana (together, these four companies constitute our "U.S. insurance subsidiaries").
Both Commonwealth Annuity and Life Insurance Company and First Allmerica Financial Life Insurance Company are organized and domiciled in the Commonwealth of Massachusetts; Accordia Life and Annuity Company ("Accordia") is organized and domiciled in the State of Iowa; and Forethought Life Insurance Company is organized and domiciled in the State of Indiana (together, these four companies constitute our "U.S. insurance subsidiaries").
The benchmark used for purposes of comparison for the European Credit Opportunities strategy is based on the S&P European Leveraged Loans (All Loans) Index. The following table presents information regarding our alternative credit investment funds where investors have capital commitments from inception to December 31, 2023.
The benchmark used for purposes of comparison for the European Credit Opportunities strategy is based on the S&P European Leveraged Loans (All Loans) Index. 25 Table of Contents The following table presents information regarding our alternative credit investment funds where investors have capital commitments from inception to December 31, 2024.
This data does not reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after December 31, 2023.
This data does not reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after December 31, 2024.
This data does not reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after December 31, 2023.
This data does not reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after December 31, 2024.
This data does not reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after December 31, 2023.
This data does not reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after December 31, 2024.
Global Atlantic operates in flow reinsurance by partnering with insurance companies that sell retirement products, such as multi-year guaranteed annuities or single premium immediate annuities. Global Atlantic seeks to ensure that its partnerships generate profitable growth, repricing flow reinsurance products as market conditions evolve. • Funding Agreements.
Global Atlantic operates in flow reinsurance by partnering with insurance companies that sell retirement products, such as multi-year guaranteed annuities or single premium immediate annuities. Global Atlantic seeks to ensure that its partnerships generate profitable growth, repricing flow reinsurance products as market conditions evolve. • PRT Transactions.
Our investment teams have deep industry knowledge and are supported by a substantial and diversified capital base; an integrated global investment platform; the expertise of operating professionals, senior advisors and other advisors; and a worldwide network of business relationships that provide a significant source of investment opportunities, specialized knowledge during due diligence and substantial resources for creating and realizing value for stakeholders.
Our investment teams have deep industry knowledge and are able to utilize a substantial and diversified capital base; an integrated global investment platform; the expertise of operating professionals, senior advisors, and other advisors; and a worldwide network of business relationships that provide a significant source of investment opportunities, specialized knowledge during due diligence and substantial resources for creating and realizing value for stakeholders.
As of December 31, 2023, we and our employees and other personnel have approximately $25.0 billion invested in or committed to our own funds and portfolio companies, including $12.1 billion of capital funded from our balance sheet, $7.7 billion of additional capital committed by our balance sheet to our investment vehicles, $3.6 billion funded from personal investments, and $1.7 billion of additional capital commitments from personal investments. 9 Table of Contents Private Equity Overview Through our Private Equity business line, we manage and sponsor a group of private equity funds that invest capital for long-term appreciation, either through controlling ownership of a company or strategic non-controlling minority positions.
As of December 31, 2024, we and our employees and other personnel have approximately $28.6 billion invested in or committed to our own funds and portfolio companies, including $12.2 billion of capital funded from our balance sheet, $11.0 billion of additional capital committed by our balance sheet to our investment funds and other investment vehicles, $4.2 billion funded from personal investments, and $1.2 billion of additional capital commitments from personal investments. 9 Table of Contents Private Equity Overview Through our Private Equity business line, we manage and sponsor a group of private equity investment vehicles that invest capital for long-term appreciation, either through controlling ownership of a company or strategic non-controlling minority positions.
Other Asset Management Employees Our other asset management employees come from diverse professional backgrounds in capital markets, operations, economics, capital raising, client services, public affairs, finance, tax, legal, compliance, risk management, human capital, and information technology.
Our other asset management employees come from diverse professional backgrounds in capital markets, operations, economics, capital raising, client services, public affairs, finance, tax, legal, compliance, risk management, human capital, marketing and communications, investor relations, and information technology.
As of December 31, 2023, approximately 92% of our AUM consists of capital that is either not subject to redemption for at least 8 years from inception or what we refer to as perpetual capital.
As of December 31, 2024, approximately 93% of our AUM consists of capital that is either not subject to redemption for at least 8 years from inception or what we refer to as perpetual capital.
Partners LLP has permission to engage in a number of regulated activities including advising on and arranging deals relating to corporate finance business in relation to certain types of specified investments.
Kohlberg Kravis Roberts & Co. Partners LLP has permission to engage in a number of regulated activities including advising on and arranging deals relating to corporate finance business in relation to certain types of specified investments.
KKR Capital Markets (Ireland) Limited Company is authorized to engage in a number of regulated activities regulated under MiFID, including dealing as principal or agent, making arrangements in relation to certain types of specified investments, and arranging the safeguarding and administration of assets.
KKR Capital Markets (Ireland) Limited Company is authorized to engage in a number of regulated activities regulated under MiFID, including dealing as principal or agent, and making arrangements in relation to certain types of specified investments.
Unlike our traditional fund structures, these investments do not have fixed termination dates and provide certain limited opportunities for liquidity. We have K-Series vehicles that operate or invest in private equity companies, infrastructure assets, credit investments and real estate.
Unlike our traditional fund structures, these investments do not have fixed termination dates and provide certain limited opportunities for liquidity. We have K-Series vehicles that operate or invest in private equity companies, infrastructure assets, credit investments, and real estate. We provide our services pursuant to management agreements with these vehicles.
Foreign currency commitments have been converted into U.S. dollars based on the exchange rate that prevailed on December 31, 2023. (4) The remaining cost represents the initial investment of the general partner and limited partners, reduced for returns of capital.
Foreign currency commitments have been converted into U.S. dollars based on the exchange rate that prevailed on December 31, 2024. (4) The remaining cost represents the initial investment of the general partner and limited partners, reduced for returns of capital. (5) Open-ended fund.
From our inception through December 31, 2023, the firm has generated approximately $195.9 billion of cash proceeds from the sale of our Private Equity portfolio companies in initial public offerings and secondary offerings, dividends, and sales to strategic and financial buyers.
From our inception through December 31, 2024, the firm has generated approximately $208.1 billion of cash proceeds from the sale of our Private Equity portfolio companies in initial public offerings and secondary offerings, dividends, and sales to strategic and financial buyers.
(7) Represents FS KKR Capital Corp. and KKR FS Income Trust. We report all of the assets under management of these BDCs in our AUM and FPAUM.
(7) Represents FSK, KKR FS Income Trust, and KKR FS Income Trust Select. We report all of the assets under management of these BDCs in our AUM and FPAUM.
Throughout our history, we have consistently been a leader in the private equity industry, having completed more than 730 private equity investments in portfolio companies with a total transaction value in excess of $710 billion as of December 31, 2023.
Throughout our history, we have consistently been a leader in the private equity industry, having completed more than 770 private equity investments in portfolio companies with a total transaction value in excess of $790 billion as of December 31, 2024.
(“Moody’s”), “A-” with a positive outlook from S&P Global Ratings (“S&P”), and “A” with a stable outlook from Fitch Ratings, Inc. ("Fitch"). Global Atlantic also sponsors third-party co-investment vehicles to participate alongside Global Atlantic in qualifying reinsurance opportunities. These sponsored reinsurance sidecar vehicles provide third-party capital to support reinsurance transactions and are not consolidated into our financial statements.
(“Moody’s”), “A-” with a positive outlook from S&P Global Ratings (“S&P”), and “A” with a stable outlook from Fitch Ratings, Inc. ("Fitch"). Global Atlantic also sponsors third-party co-investment vehicles to participate alongside Global Atlantic in qualifying reinsurance opportunities. These sponsored reinsurance vehicles provide third-party capital to support reinsurance transactions.
While we generally target customers with whom we have existing relationships, those customers may have similar relationships with the firm's competitors, many of whom will have access to competing securities transactions, greater financial, technical or marketing resources or more established reputations than us. Global Atlantic operates in highly competitive markets.
While we generally target customers with whom we have existing relationships, those customers may have similar relationships with the firm's competitors, many of whom will have access to competing securities transactions, greater financial, technical or marketing resources, or more established reputations than us.
PRT is a transaction in which a pension plan sponsor, such as a corporation, transfers the risk associated with the pension plan’s liabilities to an insurance company. Global Atlantic has historically operated in the PRT market through reinsurance relationships with insurance company clients that directly underwrite and assume corporate pension liabilities.
PRT is a transaction in which a pension plan sponsor, such as a corporation, transfers the risk associated with the pension plan’s liabilities to an insurance company. Global Atlantic directly underwrites PRT transactions and also operates in the PRT market indirectly through reinsurance relationships with insurance company clients that directly underwrite and assume corporate pension liabilities.
Asset Management In our asset management business, we have five business lines: (1) Private Equity, (2) Real Assets, (3) Credit and Liquid Strategies, (4) Capital Markets, and (5) Principal Activities.
Our Business We operate in three segments: our asset management business, our insurance business, and our strategic holdings business. Asset Management In our asset management business, we have five business lines: (1) Private Equity, (2) Real Assets, (3) Credit and Liquid Strategies, (4) Capital Markets, and (5) Principal Activities.
To further scale its institutional markets business, Global Atlantic sponsors co-investment vehicles (the "sponsored reinsurance sidecar vehicles") to participate alongside Global Atlantic in certain qualifying reinsurance transactions.
To further scale its institutional markets business, Global Atlantic sponsors co-investment vehicles (the "Ivy and other co-investment vehicles") to participate alongside Global Atlantic in certain qualifying reinsurance transactions.
We seek to partner with real estate owners, lenders, operators, and developers to provide flexible capital to respond to transaction-specific needs, including the purchase or financing of existing assets or companies and the funding of future development or acquisition opportunities. We have made real estate equity investments in residential and commercial assets.
We seek to partner with real estate owners, lenders, operators, and developers to provide flexible capital to respond to transaction-specific needs, including the acquisition or financing of existing assets or companies and the funding of future development or acquisition opportunities. We make real estate equity investments through opportunistic closed-end vehicles in residential and commercial assets.
Global Atlantic offers individual customers fixed-rate annuities, fixed-indexed annuities, and targeted life products primarily through a network of banks, broker-dealers, and insurance agencies. Global Atlantic provides its institutional clients customized reinsurance solutions, including block, flow and pension risk transfer ("PRT") reinsurance, as well as funding agreements.
Global Atlantic primarily offers individuals fixed-rate annuities, fixed-indexed annuities, and targeted life products through a network of banks, broker-dealers, and independent marketing organizations. Global Atlantic provides its institutional clients customized reinsurance solutions, including block, flow, and pension risk transfer reinsurance, as well as funding agreements.
Global Atlantic primarily generates income from annuity products by earning a spread between net investment income and the cost of providing benefits under the annuity contract. • Life Products. Global Atlantic’s targeted life products primarily consist of universal life and preneed life insurance.
Global Atlantic primarily generates income from annuity products by earning a spread between net investment income and the cost of providing benefits under the annuity contract. • Life Products. Global Atlantic’s targeted product in this category is preneed life insurance.
Global Atlantic believes that KKR's investment expertise, broad range of investment management services and strong origination capabilities are key to maintaining Global Atlantic's successful track record of identifying assets that are well-suited to the stable and long-dated nature of Global Atlantic's insurance liabilities.
Global Atlantic believes that KKR's investment expertise, broad range of investment management services, and strong origination capabilities are key to maintaining Global Atlantic's successful track record of generating attractive risk-adjusted returns. Global Atlantic’s investment management strategy seeks to procure assets that are well-suited to the stable and long-dated nature of Global Atlantic's insurance liabilities.
(6) Open-ended fund. 18 Table of Contents Real Asset Investment Process and Fund Characteristics Real Asset Investment Process Our infrastructure, real estate, and energy vehicles have a similar investment process as that described under "—Private Equity Investment Process and Fund Characteristics." Investment teams for a particular real asset strategy formally present potential investments to the applicable strategy oriented investment committee or the portfolio manager, as applicable, which monitors our due diligence practices and approves an investment before it is made.
(7) "Unallocated Commitments" represent commitments received from our strategic investor partnerships that have yet to be allocated to a particular investment strategy. 18 Table of Contents Real Asset Investment Process and Fund Characteristics Real Asset Investment Process Our infrastructure, real estate, and energy investment vehicles have a similar investment process as that described under "—Private Equity Investment Process and Fund Characteristics." Investment teams for a particular real asset strategy formally present potential investments to the applicable strategy oriented investment committee or the portfolio manager, as applicable, which monitors our due diligence practices and approves an investment before it is made.
It also leverages a sizable team of operating professionals, as well as senior advisors and other advisors, many of whom are former chief executive officers and leaders of the business community. Our Private Equity business line consists of the following strategies: Traditional Private Equity.
Our investment approach leverages our capital base, sourcing advantage, global network, and industry knowledge. It also leverages a sizable team of operating professionals, as well as senior advisors and other advisors, many of whom are former chief executive officers and leaders of the business community. Our Private Equity business line consists of the following strategies: Traditional Private Equity.
As of December 31, 2023, 44% of its reserves were in its individual market and 56% were in its institutional market. 33 Table of Contents The table below represents a breakdown of Global Atlantic’s policy liabilities by business and product type as of December 31, 2023, separated by reserves originated through its individual and institutional markets.
As of December 31, 2024, 41% of its reserves were in its individual markets and 59% were in its institutional markets. 34 Table of Contents The table below represents a breakdown of Global Atlantic’s policy liabilities by business and product type as of December 31, 2024, separated by reserves originated through its individual and institutional markets.
While the returns of our leveraged credit strategies reflect the reinvestment of income and dividends, none of the indices presented in the chart above reflect such reinvestment, which has the effect of increasing the reported relative performance of these strategies as compared to the indices.
While the returns of our leveraged credit strategies reflect the reinvestment of income and dividends, none of the indices presented in the chart above reflect such reinvestment, which has the effect of increasing the reported relative performance of these strategies as compared to the indices. Furthermore, these indices are not subject to management fees, incentive allocations, or expenses.
Traditional Private Equity Portfolio As of December 31, 2023, our traditional private equity portfolio consisted of over 130 companies with approximately $285 billion of annual revenues. These companies are headquartered in over 20 countries and operate in approximately 20 general industries, which take advantage of our broad and deep industry and operating expertise.
Traditional Private Equity Portfolio As of December 31, 2024, our traditional private equity portfolio consisted of over 140 companies with approximately $345 billion of annual revenues. These companies are headquartered in over 30 countries and operate in a variety of industries, which take advantage of our broad and deep industry and operating expertise.
Since Global Atlantic’s founding, it has closed multiple reinsurance transactions, including block, flow and PRT reinsurance, with 29 clients representing a total of $136.2 billion of assets as of December 31, 2023. For the year ended December 31, 2023, Global Atlantic generated $9.8 billion and $1.5 billion of flow and PRT reinsurance production, respectively.
Since Global Atlantic’s founding, it has closed multiple reinsurance transactions, including block, flow, and PRT, with 32 clients representing a total of $162.6 billion of assets as of December 31, 2024. For the year ended December 31, 2024, Global Atlantic generated $11.9 billion and $1.0 billion of flow and PRT reinsurance production, respectively.
With professionals in North America, Europe and the Asia-Pacific, KKR Capstone provides additional expertise for assessing investment opportunities and assisting managers of portfolio companies in defining strategic priorities and implementing operational changes.
With professionals in North America, Europe, and Asia-Pacific, KKR Capstone provides additional expertise for assessing investment opportunities and assisting managers of portfolio companies in defining strategic priorities and implementing operational changes. As of December 31, 2024, we employed approximately 941 investment professionals and KKR Capstone operating professionals.
Life insurance product sales do not include the recurring premiums that policyholders may pay over time. (2) Effective July 1, 2023, Global Atlantic no longer underwrites new indexed universal life products. Indexed universal life policies written prior to this date remain effective. (3) Funding agreements new business volumes represent funding agreements issued in connection with the FABN program only.
Life insurance product sales do not include the recurring premiums that policyholders may pay over time. (2) Effective July 1, 2023, Global Atlantic no longer underwrites new indexed universal life products. Indexed universal life policies written prior to this date remain effective.
For example, funds focused on credit and equity strategies have become active in taking control positions in companies, while private equity funds have acquired minority equity or debt positions in publicly listed companies. This convergence heighten competition for investments.
For example, traditional asset management firms have acquired alternative asset management firms, and hedge funds focused on credit and equity strategies have taken control positions in companies, while private equity funds have acquired minority equity or debt positions in publicly listed companies. This convergence heighten competition for investments.
As part of our effort, we utilize a team of operating professionals at KKR Capstone, who work exclusively with our investment professionals and portfolio company management teams or our designees.
We have developed an institutionalized process for creating value in investments. As part of our effort, we utilize a team of operating professionals at KKR Capstone, who work exclusively with our investment professionals and portfolio company management teams or our designees.
For sales through banks and broker-dealers, Global Atlantic generally delegates suitability reviews to these distribution partners. 34 Table of Contents When pricing reinsurance transactions in the institutional market, Global Atlantic performs asset and liability modeling of the block of business to be reinsured and typically re-underwrites the liability assumptions on the block using then-current market conditions, actuarial experience provided by the ceding company and its own experience from business Global Atlantic has originated.
When pricing reinsurance transactions in the institutional market, Global Atlantic performs asset and liability modeling of the block of business to be reinsured and typically re-underwrites the liability assumptions on the block using then-current market conditions, actuarial experience provided by the ceding company, and its own experience from business Global Atlantic has originated.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese rules only apply to products offered to retail customers in the UK, and as certain of our products are now available to such investors through third-party distributors, these new rules may increase the regulatory compliance cost of doing business in the UK; 74 Tabl e of Contents • the second Markets in Financial Instruments Directive ("MiFID II") and its UK equivalent (as implemented in English law via the European Union (Withdrawal) Act 2018, the Markets in Financial Instruments (Capital Markets) (Amendment) Regulations 2021 and the rules of the FCA), which imposes a range of compliance requirements on our business in areas such as transaction reporting, marketing infrastructure and securities and derivatives trading; • the Market Abuse Regulation ("MAR") and its UK equivalent, which requires, among other things, systems and controls regarding inside information, record keeping and other prescribed procedures for market soundings, and conflicts of interest and other relevant disclosure when providing investment recommendations; • the EU's Investment Firms Directive and the Investment Firms Regulation and their UK equivalents, which imposes a prudential regime for certain investment firms in Europe (including capital and liquidity standards), as well as various governance and remuneration obligations (including certain performance adjustment requirements to variable remuneration such as malus and clawback that apply in certain circumstances), with different rules applying depending on an investment firm's classification, which is based on factors such as the firm's size and the nature of its activities; • other EU bank regulatory initiatives, including the Second Bank Recovery and Resolution Directive and the European Banking Authority's guidelines on limits to exposures to shadow banking entities which carry out banking activities outside a regulated framework under EU law (including funds employing leverage on a substantial basis, within the meaning of AIFMD and its implementing rules, and credit funds); • the Securitization Regulation and its UK equivalent, which establishes due diligence, risk retention and disclosure regarding certain of our European investments, subsidiaries and CLOs; • the Short Selling Regulation and its UK equivalent, which limits naked short selling of sovereign bonds and stocks; • the Financial Conglomerates Directive and its UK equivalent, which establishes a prudential regime for financial conglomerates to address perceived risks associated with large cross-sector businesses, and could increase the costs of investing in insurance companies, investment firms and banks located in the EU; • the Sustainable Finance Disclosure Regulation, Taxonomy Regulation and the accompanying regulatory technical standards, which impose sustainability risk assessment requirements and ESG-specific transparency disclosure and reporting requirements; • the Securities Financing Transaction Regulation, which requires securities financing transactions to be reported to trade repositories, places additional reporting requirements on investment managers and introduces prior risk disclosures and written consent before assets are rehypothecated; • the GDPR and its UK equivalent, which imposes stringent data protection requirements and provides for significant penalties for noncompliance; and • the European regulation on digital operational resilience for the financial sector, and the associated directive, designed to harmonize and strengthen digital operational resilience requirements for the EU's financial services sector.
Biggest changeThe MiFID III and MiFIR II changes include, but are not limited to, amendments to provisions relating to trade transparency, share and derivatives trading obligations, payment for order flow, transaction reporting and consolidated tape providers; 75 Table of Contents • the Market Abuse Regulation ("MAR") and its UK equivalent, which requires, among other things, systems and controls regarding inside information, record keeping and other prescribed procedures for market soundings, and conflicts of interest and other relevant disclosure when providing investment recommendations; • the EU's Investment Firms Directive and the Investment Firms Regulation and their UK equivalents, which imposes a prudential regime for certain investment firms in Europe (including capital and liquidity standards), as well as various governance and remuneration obligations (including certain performance adjustment requirements to variable remuneration such as malus and clawback that apply in certain circumstances), with different rules applying depending on an investment firm's classification, which is based on factors such as the firm's size and the nature of its activities; • other EU bank regulatory initiatives, including the Second Bank Recovery and Resolution Directive and the European Banking Authority's guidelines on limits to exposures to shadow banking entities which carry out banking activities outside a regulated framework under EU law (including funds employing leverage on a substantial basis, within the meaning of AIFMD and its implementing rules, and credit funds); • the Securitization Regulation and its UK equivalent, which establishes due diligence, risk retention and disclosure regarding certain of our European investments, subsidiaries and CLOs; • the Short Selling Regulation and its UK equivalent, which limits naked short selling of sovereign bonds and stocks; • the Financial Conglomerates Directive and its UK equivalent, which establishes a prudential regime for financial conglomerates to address perceived risks associated with large cross-sector businesses, and could increase the costs of investing in insurance companies, investment firms and banks located in the EU; • the United Kingdom Financial Conduct Authority has heightened its oversight of private markets, initiating thorough reviews to evaluate valuation practices and the management of confidential information within the sector.
In instances where we hold assets at a prime broker and/or custodian, in the event of the insolvency of such entity, our investment vehicles may not be able to recover equivalent assets in full as they will rank among the prime broker's and custodian's unsecured creditors in relation to assets that the prime broker or custodian borrows, lends or otherwise uses.
In instances where we hold assets at a prime broker or custodian, in the event of the insolvency of such entity, our investment vehicles may not be able to recover equivalent assets in full as they will rank among the prime broker's and custodian's unsecured creditors in relation to assets that the prime broker or custodian borrows, lends or otherwise uses.
The success of our new Strategic Holdings segment will be dependent on the success of our balance sheet strategy. Our balance sheet assets have been a significant source of capital for new strategies and products.
The success of our Strategic Holdings segment will be dependent on the success of our balance sheet strategy. Our balance sheet assets have been a significant source of capital for new strategies and products.
Complying with these laws imposes potentially significant costs and complex additional burdens, and any failure by us or our portfolio companies to comply with them could expose us significant penalties, sanctions, loss of future investment opportunities, additional regulatory scrutiny, and reputational harm. We face significant harm as a result of legal claims, litigations, investigations, and negative publicity.
Complying with these laws imposes potentially significant costs and complex additional burdens, and any failure by us or our portfolio companies to comply with them could expose us to significant penalties, sanctions, loss of future investment opportunities, additional regulatory scrutiny, or reputational harm. We face significant harm as a result of legal claims, litigations, investigations, and negative publicity.
The offering of opportunities to invest in investment companies registered under the Investment Company Act (or other non-U.S. investment vehicles) and in operating companies not registered under the Investment Company Act may result in increased risks, including the vehicles we call K-Series, which could materially and adversely affect us.
The offering of opportunities to invest in investment companies registered under the Investment Company Act (or other non-U.S. investment vehicles) and in operating companies not registered under the Investment Company Act, including the vehicles we call K-Series, may result in increased risks, which could materially and adversely affect us.
If Global Atlantic's derivative counterparties or clearinghouse fail, refuse to meet their obligations in this regard or there is insufficient collateral to cover potential obligations, Global Atlantic's efforts to mitigate risks to which it is subject may prove to be ineffective or inefficient.
If Global Atlantic's derivative counterparties or clearinghouse fail or refuse to meet their obligations in this regard or there is insufficient collateral to cover potential obligations, Global Atlantic's efforts to mitigate risks to which it is subject may prove to be ineffective or inefficient.
Conflicts of interest may arise between an investment vehicle, on one hand, and KKR (including our insurance subsidiaries), on the other, or among our investment vehicles, including those relating to the purchase or sale of investments, the structuring or exercise of rights with respect to investment transactions, and the advice we provide to our investment vehicles and our insurance subsidiaries.
Conflicts of interest may arise between an investment vehicle, on one hand, and KKR, on the other, or among our investment vehicles, including those relating to the purchase or sale of investments, the structuring or exercise of rights with respect to investment transactions, and the advice we provide to our investment vehicles and our insurance subsidiaries.
We also could be forced to sell investments at a loss in connection with our insurance business to cover policyholder benefits, surrenders, withdrawals, recaptures or collateralization requirements of Global Atlantic’s reinsurance commitments or other events. Many of the products in Global Atlantic’s in-force book allow policyholders to withdraw their funds, also referred to as a surrender, under defined circumstances.
We also could be forced to sell investments at a loss in connection with our insurance business to cover policyholder benefits, surrenders, withdrawals, recaptures or collateralization requirements of Global Atlantic’s reinsurance commitments or other events. Many of the products in Global Atlantic’s in-force book allow policyholders to withdraw their funds, also referred to as a surrender, under contractually-defined circumstances.
These complex tax structures are costly to establish, monitor and maintain, and as we pursue a larger number of transactions across multiple assets classes and in multiple jurisdictions, such costs will increase and the risk that a tax matter is overlooked or inadequately or inconsistently addressed will increase. • We or our investment vehicles may acquire an investment that is subject to significant liabilities, including contingent liabilities, which could be unknown to us at the time of acquisition or, if they are known to us, we may not accurately assess or protect against the risks that they present, which could result in material unforeseen losses. • We rely on the management of our portfolio companies or other third party operators to provide for financial projections and other information about their companies, businesses or assets, which may not be accurate or realistic and thus could result in performance to fall short of our expectations or even result in bankruptcy.
These complex tax structures are costly to establish, monitor and maintain, and as we pursue a larger number of transactions across multiple assets classes and in multiple jurisdictions, such costs will increase and the risk that a tax matter is overlooked or inadequately or inconsistently addressed will increase. • We or our investment vehicles may acquire an investment that is subject to significant liabilities, including contingent liabilities, which could be unknown to us at the time of acquisition or, if they are known to us, we may not accurately assess or protect against the risks that they present, which could result in material unforeseen losses. • We rely on the management of our portfolio companies or other third-party operators to provide for financial projections and other information about their companies, businesses or assets, which may not be accurate or realistic and thus could result in performance that falls short of our expectations or even result in bankruptcy.
In addition, if preferences for Global Atlantic's individual or institutional products change or Global Atlantic is unable to offer competitive pricing and attractive terms, Global Atlantic's revenues and results of operations may be materially and adversely impacted. Moreover, as an insurance company, Global Atlantic's ability to grow is dependent on the sufficiency of its capital base to support that growth.
In addition, if preferences for Global Atlantic's individual or institutional products change or Global Atlantic is unable to offer competitive pricing and attractive terms, our revenues and results of operations may be materially and adversely impacted. Moreover, as an insurance company, Global Atlantic's ability to grow is dependent on the sufficiency of its capital base to support that growth.
We recognize earnings on investments in our investment vehicles based on our allocable share of realized and unrealized gains (or losses) reported by such investment vehicles and for certain of our recent investment vehicles when a performance hurdle is achieved, which in each case are subject to significant uncertainty and risk, including as a result of other risks discussed in this report.
We recognize earnings on investments in our investment vehicles based on our allocable share of realized and unrealized gains (or losses) reported by such investment vehicles and for certain of our recent investment vehicles when a performance hurdle is achieved, which in each case is subject to significant uncertainty and risk, including as a result of other risks discussed in this report.
Interest rate risk in particular is a significant market risk for our insurance business, as fluctuations in market interest rates can expose Global Atlantic to the risk of reduced income in respect of its investment portfolio, increases in the cost of acquiring or maintaining its insurance liabilities, increases in the cost of hedging, or other fluctuations in Global Atlantic's financial, capital and operating profile which materially and adversely affect its business.
Interest rate risk in particular is a significant market risk for our insurance business, as fluctuations in market interest rates can expose Global Atlantic to the risk of reduced income in respect of its investment portfolio, increases in the cost of acquiring or maintaining its insurance liabilities, increases in the cost of hedging, or other fluctuations in Global Atlantic's financial, capital and operating profile which materially and adversely affect us.
If any one of such distributors were to terminate its relationship with Global Atlantic or reduce the amount of sales which it produces, our insurance business would likely be adversely affected. In addition, some of Global Atlantic's distribution partners and potential partners use proprietary or third-party scoring systems in determining which products to sell.
If any one of such distribution partners were to terminate its relationship with Global Atlantic or reduce the amount of sales which it produces, our insurance business would likely be adversely affected. In addition, some of Global Atlantic's distribution partners and potential distribution partners use proprietary or third-party scoring systems in determining which products to sell.
We cannot assure you that our cyber risk management efforts and our investment in information technology will prevent significant breakdowns, data leakages, breaches in our systems, or those of our third-party vendors and other contractors and consultants, or other cyber incidents that could have a material adverse effect upon our reputation, business, operations, or financial condition.
We cannot assure you that our cybersecurity risk management efforts and our investment in information technology will prevent significant breakdowns, data leakages, breaches in our systems, or those of our third-party vendors and other contractors and consultants, or other cyber incidents that could have a material adverse effect upon our reputation, business, operations, or financial condition.
For example, KKR or a specific investment vehicle may sell an investment at a different time or for different consideration than other investment vehicles; • We may invest on behalf of our investment vehicles, or for our own account, in a portfolio company of one investment vehicle that is a competitor, service provider, supplier, customer, or other counterparty with respect to a portfolio company of another investment vehicle; • We may structure an investment in a manner that may be attractive to investment vehicle investors from a tax perspective even though KKR is required to pay corporate taxes; • A decision to acquire material non-public information about a company while pursuing an investment opportunity for a particular investment vehicle or our own account may result in our having to restrict the ability of other investment vehicles to take any action with regards to that company or its securities; • Our fiduciary obligations to our investment vehicle investors may preclude us from pursuing attractive proprietary investment opportunities, in particular as we enter into strategic relationships with broad investment mandates similar to the investments we make with our balance sheet; • Conflicts may arise in allocating investments, time, services, expenses or resources among the investment activities of our investment vehicles, KKR (including our insurance subsidiaries), other KKR-affiliated entities and the employees of KKR; • Our employees have made personal investments in a variety of our investment vehicles, which may result in conflicts of interest among investors of our investment vehicles or stockholders regarding investment decisions for these investment vehicles; • Our entitlement to receive carried interest from many of our investment vehicles may create an incentive for us to make riskier and more speculative investments on behalf of an investment vehicle than would be the case in the absence of such an arrangement.
For example, KKR or a specific investment vehicle may sell an investment at a different time or for different consideration than other investment vehicles; • We may invest on behalf of our investment vehicles, or for our own account, in a portfolio company of one investment vehicle that is a competitor, service provider, supplier, customer, or other counterparty with respect to a portfolio company of another investment vehicle; • We may structure an investment in a manner that may be attractive to investment vehicle investors from a tax perspective even though KKR is required to pay corporate taxes; • A decision to acquire material non-public information about a company while pursuing an investment opportunity for a particular investment vehicle or our own account may result in our having to restrict the ability of other investment vehicles to take any action with regards to that company or its securities; • Our fiduciary obligations to our investment vehicle investors may preclude us from pursuing attractive proprietary investment opportunities, in particular as we enter into strategic relationships with broad investment mandates similar to the investments we make with our balance sheet; • Conflicts may arise in allocating investments, time, services, expenses or resources among the investment activities of our investment vehicles, KKR, other KKR-affiliated entities and the employees of KKR; • Our employees have made personal investments in a variety of our investment vehicles, which may result in conflicts of interest among investors of our investment vehicles or stockholders regarding investment decisions for these investment vehicles; • Our entitlement to receive carried interest from many of our investment vehicles may create an incentive for us to make riskier and more speculative investments on behalf of an investment vehicle than would be the case in the absence of such an arrangement.
For example, on July 1, 2018, we converted from a Delaware limited partnership to a Delaware corporation; on January 1, 2020, we completed an reorganization to, among other changes, consolidate the three intermediate holdings companies for KKR's business; and, most recently, on May 31, 2022, we completed the mergers contemplated by the Reorganization Agreement by which KKR acquired KKR Holdings.
For example, on July 1, 2018, we converted from a Delaware limited partnership to a Delaware corporation; on January 1, 2020, we completed a reorganization to, among other changes, consolidate the three intermediate holdings companies for KKR's business; and, most recently, on May 31, 2022, we completed the mergers contemplated by the Reorganization Agreement by which KKR acquired KKR Holdings.
In addition to fluctuations based on the valuations of the underlying investments of the AUM, this capital is subject, however, to withdrawals, redemptions and periodic payments such as dividends. Perpetual capital may also be reduced through elections by investment vehicle investors to redeem their investment, which is permitted in certain of our vehicles.
In addition to fluctuations based on the valuations of the underlying investments of the AUM, this capital is subject to withdrawals, redemptions and periodic payments such as dividends. Perpetual capital may also be reduced through elections by investment vehicle investors to redeem their investment, which is permitted in certain of our vehicles.
Several of our investment vehicles invest in emerging market countries that may not have established laws and regulations that are as stringent as in more developed nations, or where existing laws and regulations may not be consistently enforced. For example, our investment vehicles invest throughout jurisdictions that have material perceptions of corruption according to international rating standards.
Several of our investment vehicles invest in emerging market countries that may not have established laws and regulations that are as stringent as those in more developed nations, or where existing laws and regulations may not be consistently enforced. For example, our investment vehicles invest throughout jurisdictions that have material perceptions of corruption according to international rating standards.
After the sale of a real estate asset, buyers may later sue for losses associated with problems alleged not to have been assumed by the buyer; and • We manage REITs, which may be affected by changes in the value of their underlying properties and by defaults by borrowers or tenants.
After the sale of a real estate asset, buyers may later sue for losses associated with problems alleged not to have been assumed by the buyer; and • We manage and invest in REITs, which may be affected by changes in the value of their underlying properties and by defaults by borrowers or tenants.
Investors in certain of our leveraged credit investment vehicles may generally submit redemptions to redeem their investments on a quarterly, monthly, or other periodic basis (subject to, in some cases, the expiration of a specified period of time or, in certain cases, a withdrawal fee on withdrawals before the expiration of a specified period), subject to the applicable investment vehicle’s specific redemption provisions.
Investors in certain of our credit investment vehicles may generally submit redemptions to redeem their investments on a quarterly, monthly, or other periodic basis (subject to, in some cases, the expiration of a specified period of time or, in certain cases, a withdrawal fee on withdrawals before the expiration of a specified period), subject to the applicable investment vehicle’s specific redemption provisions.
These risks may include the following: • the possibility of restrictions on foreign direct investment and exchange control regulations; • restrictions on repatriation of profit on investments or of capital invested; • the imposition of non-U.S. taxes or withholding taxes on income or gain with respect to certain assets and/or changes in tax law; • differences in the legal and regulatory environment, such as the recognition of information barriers, or enhanced legal and regulatory compliance; • greater levels of corruption and potential exposure to the FCPA and other laws that prohibit improper payments or offers of payments to foreign governments, their officials and other third parties; • violations of trade sanctions or trade control regimes and the potential for the imposition of new or additional tariffs; • limitations on borrowings to be used to fund acquisitions or dividends; • limitations on the deductibility of interest and other financing costs and expense for income tax purposes in certain jurisdictions; • limitations on permissible counterparties in our transactions or consolidation rules that effectively restrict the types of businesses in which we may invest; 98 Tabl e of Contents • political risks generally, including political and social instability, nationalization, expropriation of assets or political hostility to investments by foreign or private equity investors; • less liquid markets; • reliance on a more limited number of commodity inputs, service providers or distribution mechanisms; • adverse fluctuations in currency exchange rates and costs associated with conversion of investment principal and income from one currency into another; • higher rates of inflation; • less available current information about an issuer; • higher transaction costs; • less government supervision of exchanges, brokers and issuers; • less developed bankruptcy and other laws; • greater application of concepts like equitable subordination, which may, in bankruptcy or insolvency, result in the subordination of debt or other senior interests held by our investment funds, vehicles or accounts in companies in which our investment funds, vehicles or accounts also hold equity interests; • difficulty in enforcing contractual obligations; • lack of uniform or robust accounting, auditing, financial reporting standards, practices and disclosure requirements, and less government supervision and regulation; • less stringent requirements relating to fiduciary duties; • fewer investor protections; and • greater price volatility.
These risks may include the following: • the possibility of restrictions on foreign direct investment and exchange control regulations; • restrictions on repatriation of profit on investments or of capital invested; • the imposition of non-U.S. taxes or withholding taxes on income or gain with respect to certain assets and/or changes in tax law; • differences in the legal and regulatory environment, such as the recognition of information barriers, or enhanced legal and regulatory compliance; • greater levels of corruption and potential exposure to the FCPA and other laws that prohibit improper payments or offers of payments to foreign governments, their officials and other third parties; • violations of trade sanctions or trade control regimes and the potential for the imposition of new or additional tariffs; • limitations on borrowings to be used to fund acquisitions or dividends; 99 Table of Contents • limitations on the deductibility of interest and other financing costs and expense for income tax purposes in certain jurisdictions; • limitations on permissible counterparties in our transactions or consolidation rules that effectively restrict the types of businesses in which we may invest; • political risks generally, including political and social instability, nationalization, expropriation of assets or political hostility to investments by foreign or private equity investors; • less liquid markets; • reliance on a more limited number of commodity inputs, service providers or distribution mechanisms; • adverse fluctuations in currency exchange rates and costs associated with conversion of investment principal and income from one currency into another; • higher rates of inflation; • less available current information about an issuer; • higher transaction costs; • less government supervision of exchanges, brokers and issuers; • less developed bankruptcy and other laws; • greater application of concepts like equitable subordination, which may, in bankruptcy or insolvency, result in the subordination of debt or other senior interests held by our investment funds, vehicles or accounts in companies in which our investment funds, vehicles or accounts also hold equity interests; • difficulty in enforcing contractual obligations; • lack of uniform or robust accounting, auditing, financial reporting standards, practices and disclosure requirements, and less government supervision and regulation; • less stringent requirements relating to fiduciary duties; • fewer investor protections; and • greater price volatility.
Growing interest on the part of investors and regulators in ESG factors and increased demand for, and scrutiny of, asset managers' sustainability-related disclosure, have also increased the risk that asset managers could be perceived as, or accused of, making inaccurate or misleading statements regarding these matters.
Growing interest on the part of investors and regulators in sustainability factors and increased demand for, and scrutiny of, asset managers' sustainability-related disclosure, have also increased the risk that asset managers could be perceived as, or accused of, making inaccurate or misleading statements regarding these matters.
Accordingly, from time-to-time Global Atlantic is required to adopt new guidance or interpretations, or could be subject to existing guidance as Global Atlantic enters into new transactions or business lines, which may have a material effect on Global Atlantic that is either unexpected or has a greater impact than expected.
Accordingly, from time-to-time Global Atlantic is required to adopt new guidance or interpretations, or could be subject to existing guidance as Global Atlantic enters into new transactions or business lines, which may have a material effect on us that is either unexpected or has a greater impact than expected.
The NAIC and state insurance regulators will use the NAIC List to review additional information related to affiliates and investment structures (including revisions to the capital charges for asset-backed securities, in particular CLOs), investment management agreements, governance, market conduct practices and use of third-party administrators.
The NAIC and state insurance regulators use the NAIC List to review additional information related to affiliates and investment structures (including revisions to the capital charges for asset-backed securities, in particular CLOs), investment management agreements, governance, market conduct practices and use of third-party administrators.
We also rely on Rule 506 in connection with our capital markets business activities, including with respect to various fundraising activities discussed above and in connection with transactions in which our investment funds or insurance companies may participate as a purchaser or a seller of securities.
We also rely on Rule 506 in connection with our capital markets business activities, including with respect to various fundraising activities discussed above and in connection with transactions in which our investment funds or insurance companies may participate as a sponsor or as a purchaser or a seller of securities.
Additionally, certain of our portfolio companies may be subject to reporting requirements under Australia’s Foreign Acquisitions and Takeovers Act (1975), which is administered by the Foreign Investment Review Board (“FIRB”), because of the composition of KKR’s investment funds, among other reasons.
Additionally, certain of our portfolio companies may be subject to reporting requirements under, among others, Australia’s Foreign Acquisitions and Takeovers Act (1975), which is administered by the Foreign Investment Review Board (“FIRB”), because of the composition of KKR’s investment funds, among other reasons.
In particular, the future results may differ significantly from their historical results for the following reasons, among others: • the rates of returns of our investment vehicles reflect unrealized gains as of the applicable valuation date that may never be realized, which may adversely affect the ultimate value realized from their investments; 83 Tabl e of Contents • certain historical returns that we present in this report are based on the performance of our historical private equity funds, the results of which have already been realized and are significantly less relevant for raising capital for our future investment vehicles; • the future performance of our investment vehicles will be affected by various market and economic conditions and other factors; • in some historical periods, the rates of return of some of our investment vehicles have been positively influenced by a number of investments that experienced a substantial decrease in the average holding period of such investments and rapid and substantial increases in value following the dates on which those investments were made; those trends and rates of return may not be repeated in the future as the actual or expected length of holding periods related to investments is likely longer than such historical periods; • our newly established investment vehicles may generate lower returns during the period that they take to deploy their capital, which may result in little or no carried interests due to performance hurdles; • our investment vehicles' returns have benefited from investment opportunities and various market and economic conditions in certain historical periods that may not repeat themselves; • we may create new investment vehicles and investment products in the future that reflect a different asset mix in terms of allocations among investment vehicles, investment strategies, geographic and industry exposure, vintage year and economic terms; and our historical rates of return reflect our historical cost structure, which has varied and may vary further in the future.
In particular, the future results may differ significantly from their historical results for the following reasons, among others: • the rates of return of our investment vehicles reflect unrealized gains as of the applicable valuation date that may never be realized, which may adversely affect the ultimate value realized from their investments; • certain historical returns that we present in this report are based on the performance of our historical private equity funds, the results of which have already been realized and are significantly less relevant for raising capital for our future investment vehicles; • the future performance of our investment vehicles will be affected by various market and economic conditions and other factors; • in some historical periods, the rates of return of some of our investment vehicles have been positively influenced by a number of investments that experienced a substantial decrease in the average holding period of such investments and rapid and substantial increases in value following the dates on which those investments were made; those trends and rates of return may not be repeated in the future as the actual or expected length of holding periods related to investments is likely longer than such historical periods; • our newly established investment vehicles may generate lower returns during the period that they take to deploy their capital, which may result in little or no carried interests due to performance hurdles; • our investment vehicles' returns have benefited from investment opportunities and various market and economic conditions in certain historical periods that may not repeat themselves; • we may create new investment vehicles and investment products in the future that reflect a different asset mix in terms of allocations among investment vehicles, investment strategies, geographic and industry exposure, vintage year and economic terms; and our historical rates of return reflect our historical cost structure, which has varied and may vary further in the future.
We cannot determine with precision the amounts that Global Atlantic will pay for, or the timing of payment of, actual benefits, claims and expenses or whether the assets supporting policy liabilities, together with future premiums, will grow to the level assumed prior to the payment of benefits or claims.
We cannot, however, determine with precision the amounts that Global Atlantic will pay for, or the timing of payment of, actual benefits, claims and expenses or whether the assets supporting policy liabilities, together with future premiums, will grow to the level assumed prior to the payment of benefits or claims.
For Global Atlantic's directly issued fixed-rate annuities, reserves are equal to policyholder account balances before applicable surrender charges, and lapse, surrender rates and persistency assumptions are important assumptions used in calculating these reserves and drivers of profitability with respect to these products.
For example, for Global Atlantic's directly issued fixed-rate annuities, reserves are equal to policyholder account balances before applicable surrender charges, and lapse, surrender rates and persistency assumptions are important assumptions used in calculating these reserves and drivers of profitability with respect to these products.
If the data we, or third parties whose services we rely on, use in connection with the possible development or deployment of artificial intelligence is incomplete, inadequate or biased in some way, the performance of our products, services, and businesses could suffer.
If the data we, or third parties whose services we rely on, use in connection with the development or deployment of artificial intelligence is incomplete, inadequate or biased in some way, the performance of our products, services, and businesses could suffer.
In 2023, the BMA issued a series of consultation papers exploring updates to its framework, including updated requirements for reserves, capital and governance. The BMA is in the process of implementing these requirements and could propose further updates to certain aspects of the EBS Framework.
In 2023 and 2024, the BMA issued a series of consultation papers exploring updates to its framework, including updated requirements for reserves, capital and governance. The BMA is in the process of implementing these requirements and could propose further updates to certain aspects of the EBS Framework.
Our real estate investments are also subject to additional risks, including the following: • The success of certain investments will depend on the ability to restructure and effectuate improvements in the operations of the applicable properties, and there is no assurance that we will be successful in implementing such restructuring programs and/or improvements; • If we acquire direct or indirect interests in undeveloped land or underdeveloped real property, which may often be non-income producing, they will be subject to the risks normally associated with such assets and development activities, including risks relating to the availability and timely receipt of zoning and other regulatory or environmental approvals, the cost and timely completion of construction, and the availability of both construction and permanent financing on favorable terms; • The strategy of our real estate investment vehicles may be based, in part, on the availability for purchase of assets at favorable prices followed by the continuation or improvement of market conditions or on the availability of refinancing.
Our real estate investments are also subject to additional risks, including the following: • The success of certain investments will depend on the ability to restructure and effectuate improvements in the operations of the applicable properties, and there is no assurance that we will be successful in implementing such restructuring programs and/or improvements; • If we acquire direct or indirect interests in undeveloped land or underdeveloped real property, which may often be non-income producing, they will be subject to the risks normally associated with such assets and development activities, including risks relating to the availability and timely receipt of zoning and other regulatory or environmental approvals, the cost and timely completion of construction, and the availability of both construction and permanent financing on favorable terms; 97 Table of Contents • The strategy of our real estate investment vehicles may be based, in part, on the availability for purchase of assets at favorable prices followed by the continuation or improvement of market conditions or on the availability of refinancing.
Regulators in enforcement actions and private litigants could also find it easier to attempt to extend fiduciary status to, or to claim fiduciary or contractual breach by, advisors who would not be deemed fiduciaries under current regulations.
Regulators in enforcement actions and private litigants in litigation could also find it easier to attempt to extend fiduciary status to, or to claim fiduciary or contractual breach by, advisors who would not be deemed fiduciaries under current regulations.
New climate-related regulations or interpretations of existing laws may result in enhanced disclosure obligations, which could negatively affect our and our investment vehicles’ investments and materially increase the regulatory burden and cost of compliance.
New climate-related regulations or interpretations of existing laws may result in enhanced disclosure or other compliance obligations, which could negatively affect our and our investment vehicles’ investments and materially increase the regulatory burden and cost of compliance.
We often pursue investment opportunities that involve unique business, regulatory, legal or other complexities, including complexities arising from the large size of our investment or from a lack of control over the investment, which involves significant risks.
We often pursue investment opportunities that involve unique business, regulatory, legal, tax or other complexities, including complexities arising from the large size of our investment or from a lack of control over the investment, which involves significant risks.
Growth opportunities may be in new or adjacent product offerings and in new jurisdictions where Global Atlantic historically has had less experience. Pursuing opportunities in these new areas may subject Global Atlantic to new and complex insurance regulations and business considerations.
Growth opportunities may also be in new or adjacent product offerings and in new jurisdictions where Global Atlantic historically has had less experience. Pursuing opportunities in these new areas may subject Global Atlantic to new and complex insurance regulations and business considerations.
For additional information about regulatory risks we face with respect to portfolio companies in various asset classes, such as real assets, or risks we face with respect to our insurance business, please see other risks discussed in this report, including “—Risks Related to Our Investment Activities—Our investments in real assets such as real estate, infrastructure and energy may expose us to increased risks and liabilities” and “—Risks Related to Our Insurance Activities—Global Atlantic's businesses are heavily regulated across numerous jurisdictions, including with respect to capital requirements, and changes in regulation could reduce the profitability of our insurance business.” Anti-corruption, sanctions and foreign direct investment laws Federal, state and foreign anti-corruption and trade sanctions laws and restrictions on foreign direct investment applicable to us and our portfolio companies create the potential for significant liabilities and penalties, the inability to complete transactions, imposition of significant costs and burdens, and reputational harm.
For additional information about regulatory risks we face with respect to portfolio companies in various asset classes, such as real assets, or risks we face with respect to our insurance business, please see other risks discussed in this report, including “—Risks Related to Our Investment Activities—Our investments in real assets such as real estate, infrastructure and energy may expose us to increased risks and liabilities” and “—Risks Related to Our Insurance Activities—Global Atlantic's businesses are heavily regulated across numerous jurisdictions, including with respect to capital requirements, and changes in regulation could reduce the profitability of our insurance business.” Anti-corruption, economic sanctions, trade controls, and foreign direct investment laws Federal, state and foreign anti-corruption and economic sanctions, trade control laws and restrictions on foreign direct investment applicable to us and our portfolio companies create the potential for significant liabilities and penalties, the inability to complete transactions, imposition of significant costs and burdens, and reputational harm.
Any inability, or perceived inability, by us or our portfolio companies to adequately address privacy concerns, or comply with applicable privacy laws, regulations, policies, industry standards and guidance, related contractual obligations, or other privacy legal obligations, even if unfounded, could result in significant regulatory and third party liability, increased costs, disruption of our and our portfolio companies’ business and operations, and a loss of investment vehicle investor confidence and other reputational damage.
Any inability, or perceived inability, by us or our portfolio companies to adequately address privacy concerns, or comply with applicable privacy laws, regulations, policies, industry standards and guidance, related contractual obligations, or other privacy legal obligations, even if unfounded, could result in significant regulatory and third party liability, increased costs, disruption of our and our portfolio companies’ business and operations, and a loss of investor confidence and other reputational damage.
The Financial Services and Markets Bill contains measures to, among other things: (i) establish a framework for the revocation of EU financial services law that was retained in English law following Brexit; (ii) reform the legislative framework governing the UK's capital markets; (iii) reform the financial promotion framework; and (iv) give the FCA and the Prudential Regulation Authority ("PRA") a new secondary objective to advance long-term economic growth and international competitiveness of the UK.
The Financial Markets Act contains measures to, among other things: (i) establish a framework for the revocation of EU financial services law that was retained in English law following Brexit; (ii) reform the legislative framework governing the UK's capital markets; (iii) reform the financial promotion framework; and (iv) give the FCA and the Prudential Regulation Authority ("PRA") a new secondary objective to advance long-term economic growth and international competitiveness of the UK.
To the extent we commit to buy and sell an issue of securities in firm commitment underwritings or otherwise, we expect to borrow under these revolving credit facilities or may require other sources of liquidity to fund such obligations, which, depending on the size and timing of the obligations, may limit our ability to enter into other underwriting arrangements or similar activities, service existing debt obligations or otherwise grow our business.
To the extent we commit to buy and sell an issuance of securities in firm commitment underwritings or otherwise, we expect to borrow under these revolving credit facilities or may require other sources of liquidity to fund such obligations, which, depending on the size and timing of the obligations, may limit our ability to enter into other underwriting arrangements or similar activities, service existing debt obligations or otherwise grow our business.
We believe that competition for investors in our insurance products is based primarily on: (i) price; (ii) terms and conditions; (iii) relationships; (iv) quality of service and execution certainty; (v) capital and perceived financial strength (including third-party ratings); (vi) technology, innovation and ease of use; (vii) breadth of product offerings; and (viii) reputation, experience and brand recognition.
We believe that competition for investors in our insurance products is based primarily on: (i) price; (ii) terms and conditions; (iii) relationships; (iv) quality of service and execution certainty; (v) capital and perceived financial strength (including third-party ratings); (vi) technology, innovation and ease of use; (vii) breadth of product offerings; and (viii) reputation, experience, brand recognition, client service, and user experience.
The risks of having such consultants and other contingent workers as integral parts of our business are similar to the risks for employees as discussed in “—Risks Related to Our Business—We depend on the efforts, skills, reputations, business contacts, and conduct of our employees and our ability to retain our employees and to recruit prospective employees.” Cyber-security failures and data security breaches may disrupt or have a material adverse impact on our businesses, operations and investments.
The risks of having such consultants and other contingent workers as integral parts of our business are similar to the risks for employees as discussed in “—Risks Related to Our Business—We depend on the efforts, skills, reputations, business contacts, and conduct of our employees and our ability to retain our employees and to recruit prospective employees.” Cybersecurity failures and data security breaches may disrupt or have a material adverse impact on our businesses, operations and investments.
If Global Atlantic is unable to find or manage profitable growth opportunities, it will be more difficult for Global Atlantic to continue to grow and could materially affect Global Atlantic.
If Global Atlantic is unable to find or manage profitable growth opportunities, it will be more difficult for Global Atlantic to continue to grow and could materially affect us.
Not all carry may be recoverable from current or former employees and other persons once it has been distributed by us. As of December 31, 2023, approximately $546 million of carried interest was subject to this clawback obligation, assuming that all applicable carry-paying funds were liquidated at their December 31, 2023 fair values.
Not all carry may be recoverable from current or former employees and other persons once it has been distributed by us. As of December 31, 2024, approximately $546 million of carried interest was subject to this clawback obligation, assuming that all applicable carry-paying funds were liquidated at their December 31, 2024 fair values.
Conversely, management actions to reduce rates on inforce contracts in response to declining interest rates may result in greater surrenders than originally estimated, which may adversely affect Global Atlantic's earnings related to those products. While Global Atlantic seeks to cash-flow match its assets to its policy liabilities, greater market volatility and uncertainty has made matching more difficult.
Conversely, management actions to reduce rates on in-force contracts in response to declining interest rates may result in greater surrenders than originally estimated, which may adversely affect Global Atlantic's earnings related to those products. While Global Atlantic seeks to cash-flow match its assets to its policy liabilities, greater market volatility and uncertainty has made matching more difficult.
Global Atlantic periodically revises the key assumptions used in the calculation of the amortization of DAC, VOBA, URR, UFEL and DSI as part of the assumption review process.
Global Atlantic periodically revises the key assumptions used in the calculation of the amortization of DAC, VOBA, DRL, URR, UFEL and DSI as part of the assumption review process.
Internal Revenue Code of 1986, as amended (the "Code"), as in effect prior to 2018), partnership representative (as defined in the Code), officer, director, employee, agent, fiduciary or trustee of any of KKR or its subsidiaries (which includes KKR Group Partnership), the Series I preferred stockholder or any of our or the Series I preferred stockholder's affiliates and certain other specified persons (collectively, "Indemnitees"), to the fullest extent permitted by law, against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts incurred by any Indemnitee.
Internal Revenue Code of 1986, as amended (the "Code"), as in effect prior to 2018), partnership representative (as defined in the Code), officer, director, employee, agent, fiduciary or trustee of any of KKR or its 122 Table of Contents subsidiaries (which includes KKR Group Partnership), the Series I preferred stockholder or any of our or the Series I preferred stockholder's affiliates and certain other specified persons (collectively, "Indemnitees"), to the fullest extent permitted by law, against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts incurred by any Indemnitee.
For example, due to regulatory restrictions on the payment of dividends, our U.S. insurance subsidiaries may not declare a dividend in 2024 to their holding companies without prior domiciliary state regulatory approval. Offering new products or offering products in additional jurisdictions will also subject Global Atlantic to additional regulation and compliance requirements.
For example, due to regulatory restrictions on the payment of dividends, our U.S. insurance subsidiaries may not declare a dividend in 2025 to their holding companies without prior domiciliary state regulatory approval. Offering new products or offering products in additional jurisdictions will also subject Global Atlantic to additional regulation and compliance requirements.
For discussions of the risks posed by Regulation Best Interest and similar rules on Global Atlantic, see "—Risks Related to Our Insurance Activities—Global Atlantic's businesses are heavily regulated across numerous jurisdictions, including with respect to capital requirements, and changes in regulation could reduce the profitability of our insurance business.” The CFTC, and in certain cases the SEC, has proposed or adopted regulations governing transactions in futures and swaps, which may limit our trading activities and our ability to implement effective hedging strategies or increase the costs of compliance.
For discussions of the risks posed by Regulation Best Interest and similar rules on Global Atlantic, see "—Risks Related to Our Insurance Activities—Global Atlantic's businesses are heavily regulated across numerous jurisdictions, including with respect to capital requirements, and changes in regulation could reduce the profitability of our insurance business.” 74 Table of Contents The CFTC, and in certain cases the SEC, has proposed or adopted regulations governing transactions in futures and swaps, which may limit our trading activities and our ability to implement effective hedging strategies or increase the costs of compliance.
In addition, for our investment vehicles that pay carried interest based on accrued rather than realized gains, the amount of carried interest to which we are entitled and the timing of its receipt will depend on our valuation of the investment vehicle's investment; • Under the 2017 Tax Act, investments must be held for more than three years, rather than the prior requirement of more than one year, for carried interest to be treated for U.S. federal income tax purposes as capital gain, which may create a conflict of interest between the limited partner investors (whose investments would receive such capital gain treatment after a holding period of only one year) and the general partner on the execution, closing or timing of sales of an investment vehicle's investments in connection with the receipt of carried interest; • From time to time, one of our funds or other investment vehicles (including CLOs) may seek to effect a purchase or sale of an investment with one or more of our other funds or other investment vehicles in a so-called "cross transaction," or we (including our insurance subsidiaries) as a principal may seek to effect a purchase or sale of our investment with one or more of our funds or other investment vehicles in a so-called "principal transaction"; 100 Tabl e of Contents • A dispute may arise between our portfolio companies, and if such dispute is not resolved amicably or results in litigation, it could cause significant reputational harm to us, and our investment vehicle investors may become dissatisfied with our handling of the dispute; • The investors in our investment vehicles are based in a wide variety of jurisdictions and take a wide variety of forms, and consequently have diverging interests among themselves from a regulatory, tax or legal perspective or with respect to investment policies and target risk/return profiles; and • We or our affiliates, including our capital markets business, may receive fees or other compensation in connection with specific transactions or different clients that may give rise to conflicts.
In addition, for our investment vehicles that pay carried interest based on accrued rather than realized gains, the amount of carried interest to which we are entitled and the timing of its receipt will depend on our valuation of the investment vehicle's investment; • Under the 2017 Tax Act, investments must be held for more than three years, rather than the prior requirement of more than one year, for carried interest to be treated for U.S. federal income tax purposes as capital gain, which may create a conflict of interest between the limited partner investors (whose investments would receive such capital gain treatment after a holding period of only one year) and the general partner on the execution, closing or timing of sales of an investment vehicle's investments in connection with the receipt of carried interest; 101 Table of Contents • From time to time, one of our funds or other investment vehicles (including CLOs) may seek to effect a purchase or sale of an investment with one or more of our other funds or other investment vehicles in a so-called "cross transaction," or we as a principal may seek to effect a purchase or sale of our investment with one or more of our funds or other investment vehicles in a so-called "principal transaction"; • A dispute may arise between our portfolio companies, and if such dispute is not resolved amicably or results in litigation, it could cause significant reputational harm to us, and our investment vehicle investors may become dissatisfied with our handling of the dispute; • The investors in our investment vehicles are based in a wide variety of jurisdictions and take a wide variety of forms, and consequently have diverging interests among themselves from a regulatory, tax or legal perspective or with respect to investment policies and target risk/return profiles; • We or our affiliates, including our capital markets business, may receive fees or other compensation in connection with specific transactions or different clients that may give rise to conflicts.
See “—Risks Related to Our Investment Activities—Investors in certain of our investment vehicles are entitled to redeem their investments in these vehicles on a periodic basis, and certain of our investment advisory agreements may be terminated with minimal notice.” In addition, we expect that the capital arising from KKR’s investment management agreements with our insurance subsidiaries would, in general, be reduced if outflows to pay policyholder obligations under Global Atlantic’s insurance policies and reinsurance agreements exceed inflow from writing new insurance policies or entering into new reinsurance transactions.
See “—Risks Related to Our Investment Activities—Investors in certain of our investment vehicles are entitled to redeem their 49 Table of Contents investments in these vehicles on a periodic basis, and certain of our investment advisory agreements may be terminated with minimal notice.” In addition, we expect that the capital arising from KKR’s investment management agreements with our insurance subsidiaries would, in general, be reduced if outflows to pay policyholder obligations under Global Atlantic’s insurance policies and reinsurance agreements exceed inflow from writing new insurance policies or entering into new reinsurance transactions.
Our success in deploying our balance sheet assets and generating returns on this capital, particularly as it relates to our new expected business segment, Strategic Holdings (the performance of which depends on the investment performance, and dividends of, many of our balance sheet assets), will depend, among other things, on the availability of suitable opportunities after giving priority in investment opportunities to our advisory clients, the level of competition from other companies that may have greater financial resources and our ability to value potential development or acquisition opportunities accurately and negotiate acceptable terms for those opportunities.
Our success in deploying our balance sheet assets and generating returns on this capital, particularly as it relates to our business, Strategic Holdings (the performance of which depends on the investment performance, and dividends of, many of our balance sheet assets), will depend, among other things, on the availability of suitable opportunities after giving priority in investment opportunities to our advisory clients, the level of competition from other companies that may have greater financial resources and our ability to value potential development or acquisition opportunities accurately and negotiate acceptable terms for those opportunities.
Both the FSOC 2022 and 2023 annual reports noted the potential for increased interconnectivity of the financial markets as a result of private equity firms’ growing role in the insurance sector and raised concerns with the growing concentration of private debt and other complex alternative investments on the balance sheets of insurers owned by private equity firms.
The FSOC 2022, 2023 and 2024 annual reports noted the potential for increased interconnectivity of the financial markets as a result of private equity firms’ growing role in the insurance sector and raised concerns with the growing concentration of private debt and other complex alternative investments on the balance sheets of insurers owned by private equity firms.
During periods of falling interest rates, Global Atlantic may also face cash flow mismatches between interest earned on its investment portfolio and policy liabilities that may be crediting higher rates. When rates decline more policyholders might hold onto their products than expected because those products seem more attractive.
During periods of falling or lower interest rates, Global Atlantic may also face cash flow mismatches between interest earned on its investment portfolio and policy liabilities that may be crediting higher rates. When rates decline more policyholders might hold onto their products than expected because those products seem more attractive.
In addition, changes in corporate tax rates and/or individual tax rates and/or the estate tax exclusion could impact the competitiveness of Global Atlantic’s product pricing or demand for such products, which could affect our insurance subsidiaries’ ability to attract or retain clients or could reduce the profitability of our insurance products and have a material adverse effect on our insurance business.
In addition, changes in corporate tax rates and/or individual tax rates and/or the estate tax exclusion could impact the competitiveness of Global Atlantic’s product pricing or demand for such products, which could affect our insurance subsidiaries’ ability to attract or retain clients or could reduce the profitability of our insurance products and have a material adverse effect on us.
We have increasingly undertaken business initiatives to increase the number and type of investment products and vehicles we offer to investors, especially individual investors. We have also launched holding company conglomerates that are structured and operated in a manner permitting them to be excluded from the definition of “investment company” under the Investment Company Act.
We have increasingly undertaken business initiatives to increase the number and types of investment products and vehicles we offer to investors, especially individual investors. We have also launched holding company conglomerates that are structured and operated in a manner permitting them to be excluded from the definition of “investment company” under the Investment Company Act.
Our initiatives to expand our individual investor base, including marketing, creating and maintaining the types of products and vehicles that they may invest in, requires the investment of significant time, effort and resources, including the potential hiring of additional personnel, the implementation of new operational, compliance and other systems and processes and the development or implementation of new technology.
Our initiatives to expand our individual investor base, including marketing, creating and maintaining the types of products and vehicles that they may invest in, require the investment of significant time, effort and resources, including the potential hiring of additional personnel, the implementation of new operational, compliance and other systems and processes and the development or implementation of new technology.
GAAP requires the application of accounting guidance and policies that often involve a significant degree of judgment when accounting for insurance products. These estimates include, but are not limited to, premium persistency, future policy benefits and related expenses, valuation of embedded derivatives, valuation and impairment of investments and amortization of deferred revenues and expenses.
GAAP requires the application of accounting guidance and policies that often involve a significant degree of judgment when accounting for insurance products. These estimates include, but are not limited to, premium persistency, future policy benefits and related expenses, valuation and impairment of investments and amortization of deferred revenues and expenses.
The nature of these obligations exposes the owners of infrastructure assets to a higher level of regulatory control than is typically imposed on other businesses, which could prevent operation of a facility owned by an infrastructure asset, the completion of a previously announced acquisition or sale to third parties, or could otherwise result in additional costs and material adverse consequences to an infrastructure asset and investments in such assets; • infrastructure investments may require operators to manage such investments, and such operators' failure to comply with laws may materially and adversely affect the value of such investments and cause us serious reputational and legal harm; • from a commercial perspective, revenues for such investments may rely on contractual agreements for the provision of services with a limited number of counterparties and are consequently subject to heightened counterparty default risk; • the operations and cash flow of infrastructure investments are also more sensitive to inflation and, in certain cases, commodity price risk; and 97 Tabl e of Contents • services provided by infrastructure investments may be subject to rate regulations by government entities that determine or limit prices that may be charged and users of applicable services, or government entities in response to such users, may react negatively to any adjustments in rates, which may reduce the profitability of such infrastructure investments'.
The nature of these obligations exposes the owners of infrastructure assets to a higher level of regulatory control than is typically imposed on other businesses, which could prevent operation of a facility owned by an infrastructure asset, the completion of a previously announced acquisition or sale to third parties, or could otherwise result in additional costs and material adverse consequences to an infrastructure asset and investments in such assets; • infrastructure investments may require operators to manage such investments, and such operators' failure to comply with laws may materially and adversely affect the value of such investments and cause us serious reputational and legal harm; 98 Table of Contents • from a commercial perspective, revenues for such investments may rely on contractual agreements for the provision of services with a limited number of counterparties and are consequently subject to heightened counterparty default risk; • the operations and cash flow of infrastructure investments are also more sensitive to inflation and, in certain cases, commodity price risk; and • services provided by infrastructure investments may be subject to rate regulations by government entities that determine or limit prices that may be charged and users of applicable services, or government entities in response to such users, may react negatively to any adjustments in rates, which may reduce the profitability of such infrastructure investments.
The laws and regulations of the jurisdictions in which our insurance and reinsurance subsidiaries are domiciled or may be deemed commercially domiciled may require these companies to, among other things, maintain minimum levels of statutory capital, surplus and liquidity, meet solvency standards, submit to periodic examinations of their financial condition, restrict payments of dividends and distributions of capital, restrict our ability, in certain cases, to write insurance and reinsurance policies, make certain types of investments and distribute funds, and restrict the type and concentration of investments that can be made.
The laws and regulations of the jurisdictions in which our insurance and reinsurance subsidiaries are domiciled or may be deemed commercially domiciled may require these companies to, among other things, maintain minimum levels of 116 Table of Contents statutory capital, surplus and liquidity, meet solvency standards, submit to periodic examinations of their financial condition, restrict payments of dividends and distributions of capital, restrict our ability, in certain cases, to write insurance and reinsurance policies, make certain types of investments and distribute funds, and restrict the type and concentration of investments that can be made.
Geopolitical developments and other local and global events outside of our control can, and periodically do, materially and adversely impact various aspects of KKR and its businesses. We are a global financial institution with operations, investors and investments located in many countries around the world, which are not immune to geopolitical developments.
Geopolitical developments and other local and global events outside of our control can materially and adversely impact various aspects of KKR and its businesses. We are a global financial institution with operations, investors and investments located in many countries around the world, which are not immune to geopolitical developments.
For example, we allocate carried interest to our employees, and if tax laws alter the favorable tax characteristics of carried interest, then the value of the carry as an incentive tool is materially diminished. Furthermore, clawback provisions related to our equity incentive awards may render such compensation less attractive.
For example, we allocate carried interest to certain of our employees, and if tax laws alter the favorable tax characteristics of carried interest, then the value of the carry as an incentive tool is materially diminished. Furthermore, clawback provisions related to our carried interest allocations and equity incentive awards to employees may render such compensation less attractive.
As part of Global Atlantic's overall risk management strategy, it cedes business to other insurance companies through reinsurance. Global Atlantic's inability to collect from its reinsurers (including reinsurance clients in transactions where Global Atlantic reinsures business net of ceded reinsurance) on its reinsurance claims could have a material adverse effect on our insurance business.
As part of Global Atlantic's overall risk management strategy, it cedes business to other insurance companies through reinsurance. Global Atlantic's inability to collect from its reinsurers (including reinsurance clients in transactions where Global Atlantic reinsures business net of ceded reinsurance) on its reinsurance claims could have a material adverse effect on us.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity Needs” for further information regarding our liquidity needs along with our capital commitments as of December 31, 2023 and Note 16 “Debt Obligations” in our financial statements for further information regarding our senior notes, credit facilities and other outstanding debt obligations.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity Needs” for further information regarding our liquidity needs along with our capital commitments as of December 31, 2024 and Note 16 “Debt Obligations” in our financial statements for further information regarding our senior notes, credit facilities and other outstanding debt obligations.
Global Atlantic establishes an unearned revenue reserve ("URR") liability for revenues from certain universal life insurance products that are deferred to future periods and an unearned front-end load ("UFEL") for gross premium in excess of the benefit reserve plus additional insurance liability for certain preneed contracts.
Global Atlantic also defers certain revenues and establishes an unearned revenue reserve ("URR") liability for revenues from certain universal life insurance products that are deferred to future periods and an unearned front-end load ("UFEL") for gross premium in excess of the benefit reserve plus additional insurance liability for certain preneed contracts.
Even if Global Atlantic does find suitable opportunities on commercially acceptable terms, Global Atlantic may not be able to consummate these transactions because of the regulatory approvals required or other considerations. There is no assurance Global Atlantic will continue to be successful in these institutional markets.
Even if Global Atlantic does find suitable opportunities on commercially acceptable terms, Global Atlantic may not be able to consummate these transactions because of the regulatory approvals required or other considerations. There is no assurance Global Atlantic will continue to be successful in entering adjacent institutional markets.
The market values of commercial real estate assets are subject to volatility and may be adversely affected by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; retroactive changes to building or similar codes, tenant demand, market occupancy and rental rate trends, and capitalization rates and valuation trends.
The market values of commercial real estate assets are subject to volatility and may be adversely affected by a number of factors, including, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; retroactive changes to building or similar codes, tenant demand, market occupancy and rental rate trends, and capitalization rates and valuation trends.
In particular, the SEC's areas of focus on private equity firms have included, among others, fiduciary duty and compliance programs, conflicts of interest allocation of investment opportunities, the allocation of fees and expenses, including the acceleration of monitoring fees and the allocation of broken-deal and other expenses, valuation practices, the disclosure, use and compensation of operating partners or consultants as well as third-party compliance or similar service providers, outside investment and business activities of firm principals and employees, group purchasing arrangements, disclosure of affiliated service providers, disclosure of conflicts of interest and investment risks, adherence to notice, consent and other contractual requirements, electronic communications, cyber-security, data privacy and protection, the use of purchased data, valuation, retail investors, foreign bribery and corruption, and policies covering custody, auditing, handling of material nonpublic information, insider trading, business continuity and transition planning, conflicts of interest relating to liquidity, such as certain adviser-led fund restructurings, as well as private fund advisers' portfolio strategies, risk management, and investment recommendations and allocations.
In particular, the SEC's areas of focus on private equity firms have included, among others, fiduciary duty and compliance programs, conflicts of interest, allocation of investment opportunities, the allocation of fees and expenses, including the acceleration of monitoring fees and the allocation of broken-deal and other expenses, valuation practices, the disclosure, use and compensation of operating partners or consultants as well as third-party compliance or similar service providers, outside investment and business activities of firm principals and employees, group purchasing arrangements, disclosure of affiliated service providers, disclosure of conflicts of interest and investment risks, adherence to notice, consent and other contractual requirements, electronic communications, cybersecurity, data privacy and protection, the use of purchased data, valuation, retail investors, foreign bribery and corruption, and policies covering custody, auditing, handling of material nonpublic information, insider trading, business continuity and transition planning, conflicts of interest relating to liquidity, such as certain adviser-led fund 68 Table of Contents restructurings, as well as private fund advisers' portfolio strategies, risk management, and investment recommendations and allocations.
As a result, the funds would not be able to achieve the market position selected by the management company or general partner of such funds, and might incur a loss in liquidating their position; • Hedge funds may make investments that they do not advantageously dispose of prior to the date the applicable fund is dissolved, either by expiration of such fund’s term or otherwise.
As a result, the funds would not be able to achieve the market position selected by the management company or general partner of such funds, and might incur a loss in liquidating their position; 104 Table of Contents • Hedge funds may make investments that they do not advantageously dispose of prior to the date the applicable fund is dissolved, either by expiration of such fund’s term or otherwise.
However, dividends may not be declared out of net profits if our capital, computed in accordance with DGCL, shall have been diminished by depreciation in the value of our property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets.
However, dividends may not be declared out of net profits if our capital, computed in accordance with DGCL, shall have been diminished by depreciation in the value of our property, or by losses, or otherwise, to an amount less than the aggregate 124 Table of Contents amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets.
It is not always possible to detect or deter such misconduct, and the precautions we take may not be effective in all cases. 59 Tabl e of Contents Our employees frequently engage in manual individual processes, which bear varying levels of execution risk, including the risk of unintentional mistakes or errors, which could materially and adversely affect us.
It is not always possible to detect or deter such misconduct, and the precautions we take may not be effective in all cases. 59 Table of Contents Our employees frequently engage in manual individual processes, which bear varying levels of execution risk, including the risk of unintentional mistakes or errors, which could materially and adversely affect us.
Introducing new types of investment structures and products could increase the complexities involved in managing such investments, including ensuring compliance with applicable regulatory requirements and terms of the investment vehicles. 65 Tabl e of Contents Our organic growth strategy focuses on providing resources to foster business expansion, such that we achieve a level of scale and profitability.
Introducing new types of investment structures and products could increase the complexities involved in managing such investments, including ensuring compliance with applicable regulatory requirements and terms of the investment vehicles. 65 Table of Contents Our organic growth strategy focuses on providing resources to foster business expansion, such that we achieve a level of scale and profitability.
Accordingly, legal causes of action and remedies under Section 14 of the Exchange Act for inadequate or misleading information in proxy statements are currently not generally available to holders of our common stock. In addition, until Sunset Date, we are not subject to the “say-on-pay,” and “say-on-frequency” provisions of the Dodd-Frank Act or “pay for performance” compensation disclosure.
Accordingly, legal causes of action and remedies under Section 14 of the Exchange Act for inadequate or misleading information in proxy statements are currently not generally available to holders of our common stock. In addition, until the Sunset Date, we are not subject to the “say-on-pay” and “say-on-frequency” provisions of the Dodd-Frank Act or “pay for performance” compensation disclosure.
The proposal broadly applies to any communication made to ERISA-governed plans, IRAs, and their fiduciaries that would reasonably be viewed as a suggestion that the plan engage in, or refrain from taking, a particular course of action, and, therefore, may potentially create a fiduciary relationship between the fund sponsor and an ERISA plan or IRA for purposes of that communication.
The 2024 Rule broadly applies to any communication made to ERISA-governed plans, IRAs, and their fiduciaries that would reasonably be viewed as a suggestion that the plan engage in, or refrain from taking, a particular course of action, and, therefore, may potentially create a fiduciary relationship between the fund sponsor and an ERISA plan or IRA for purposes of that communication.
An inability of such vehicles to continue to raise or utilize leverage, to refinance or extend the maturities of their outstanding indebtedness or to maintain adequate levels of collateral under the terms of their CLOs limit their ability to grow their business, reinvest principal cash, distribute cash to us or fully execute their business strategy, and our results of operations may be materially and adversely affected.
An inability of such vehicles to continue to raise or utilize leverage, to refinance 90 Table of Contents or extend the maturities of their outstanding indebtedness or to maintain adequate levels of collateral under the terms of their CLOs limit their ability to grow their business, reinvest principal cash, distribute cash to us or fully execute their business strategy, and our results of operations may be materially and adversely affected.
This risk arises from Global Atlantic's holdings in interest rate-sensitive assets and liabilities, which include annuity products and long-duration life insurance policies, derivative contracts with payments linked to the level of interest rates or with market values which fluctuate based on the level of interest rates, and the fixed income assets Global Atlantic owns in its investment portfolio.
This risk arises from Global Atlantic's holdings in interest rate-sensitive assets and liabilities, which include annuity products and long-duration life insurance policies, derivative contracts with payments linked to the level of interest rates or with market values which fluctuate based on the level of interest 106 Table of Contents rates, and the fixed income assets Global Atlantic owns in its investment portfolio.
For example, because we may indirectly control voting securities in public utilities subject to regulation by the Federal Energy Regulatory Commission ("FERC"), including entities that may hold FERC authorization to charge market-based rates for sales of wholesale power and energy, we may be subject to certain FERC regulations, including regulations requiring us and our portfolio companies to collect, report and keep updated substantial information concerning our control of such voting interests and voting interests in other related energy companies, corporate officers, and our direct and indirect investment in such utilities and related companies.
For example, because we may indirectly control voting securities in public utilities subject to regulation by the Federal Energy Regulatory Commission ("FERC"), including entities that may hold electric transmission assets and/or FERC authorization to charge market-based rates for sales of wholesale power and energy, we may be subject to certain FERC regulations, including regulations requiring us and our portfolio companies to collect, report and keep updated substantial information concerning our control of such voting interests and voting interests in other related energy companies, corporate officers, and our direct and indirect investment in such utilities and related companies.
An increase in interest rates and other changes in the financial markets could also negatively impact the values of certain assets or investments and the ability of our balance sheet assets, funds and their portfolio companies may be negatively impacted, which could impair the value of our investment in those portfolio companies and lead to a decrease in the investment income earned by us.
An increase in interest rates and other changes in the financial markets could also negatively impact the values of certain assets or investments and the ability of our balance sheet assets, funds and their portfolio companies to refinance or extend maturities may be negatively impacted, which could impair the value of our investment in those portfolio companies and lead to a decrease in the investment income earned by us.
See "—Risks Related to Our Business—Extensive regulation of our businesses affects our activities and creates the potential for significant liabilities and penalties, which could materially and adversely affect KKR" and "—Risks Related to Our Business—We are subject to focus by some of our fund investors, stockholders, regulators and other stakeholders on environmental, social and governance matters." We depend to a large extent on our business relationships and our reputation for integrity and high-caliber professional services to attract and retain investors and qualified professionals and to pursue investment opportunities.
See "—Risks Related to Our Business—Extensive regulation of our businesses affects our activities and creates the potential for significant liabilities and penalties, which could materially and adversely affect KKR" and "—Risks Related to Our Business—We are subject to focus by some of our fund investors, stockholders, regulators and other stakeholders on sustainability matters." We depend to a large extent on our business relationships and our reputation for integrity and high-caliber professional services to attract and retain investors and qualified professionals and to pursue investment opportunities.
Real asset investments may involve the subcontracting of activities in respect of projects, and as a result our investments are subject to the risk that contractual provisions passing liabilities to a subcontractor could be ineffective, the subcontractor fails to perform services that it has agreed to perform, and subcontractor insolvency. • Technology advances, legislative changes, or changes in consumer’s preferences or ESG-focus may decrease the value of our real assets investments. • Real assets may be especially prone to adverse consequences of climate change and prolonged and potentially accelerating changes in climatic conditions, together with the response or failure to respond to these changes, could have a significant impact on the revenues, expenses and conditions of real assets and our related investments.
Real asset investments may involve the subcontracting of activities in respect of projects, and as a result our investments are subject to the risk that contractual provisions passing liabilities to a subcontractor could be ineffective, the subcontractor fails to perform services that it has agreed to perform, and subcontractor insolvency. • Technology advances, legislative changes, or changes in consumer’s preferences or sustainability-focus may decrease the value of our real assets investments. • Real assets may be especially prone to adverse consequences of climate change and prolonged and potentially accelerating changes in climatic conditions, together with the response or failure to respond to these changes, could 96 Table of Contents have a significant impact on the revenues, expenses and conditions of real assets and our related investments.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor example, prior to joining KKR, KKR’s CISO was the CISO at another large financial institution where he was responsible for their global information security program. KKR’s CISO also has prior experience in various information security roles, including security architecture, application security, engineering and operations.
Biggest changeThe cybersecurity strategy and program at KKR’s asset management business includes, among other things, annual employee training about cybersecurity risks and new employee onboarding about KKR’s security policies. Prior to joining KKR, KKR’s CISO was the CISO at another large financial institution where he was responsible for their global information security program.
As of the date of this filing, we do not believe that our business strategy, results of operations or financial conditions have been materially affected by any cybersecurity incidents for the reporting period covered by this report.
As of the date of this filing, we do not believe that our business strategy, results of operations or financial conditions have been materially affected by any cybersecurity incidents for the period covered by this report.
However, institutions like us, as well as our employees, service providers and other third parties, have experienced information security and cybersecurity attacks in the past and will likely continue to be the target of increasingly sophisticated cyber actors. For a discussion of how risks from cybersecurity threats may affect us, see “Part 1. Item 1A.
However, institutions like us, as well as our employees, service providers and other third parties, have experienced information security and cybersecurity attacks in the past and will likely continue to be the target of increasingly sophisticated cyber actors. For a discussion of how risks from cybersecurity threats may affect us, see "Part 1 Item 1A.
Global Atlantic also has a cybersecurity notification framework in place to determine when appropriate notifications and escalations are required to be provided to the senior members of Global Atlantic’s management, members of Global Atlantic’s board of directors and members of KKR’s risk and operations committee, certain member of which would, as appropriate, report such information to our Board of Directors or its Audit Committee or Risk Committee.
Global Atlantic also has a cybersecurity notification framework in place to determine when appropriate notifications and escalations are required to be provided to senior members of Global Atlantic’s management, members of Global Atlantic’s board of directors and members of KKR’s Risk and Operations Committee, certain members of which would, as appropriate, report such information to our Board of Directors or its Audit Committee or Risk Committee.
In addition, the KKR information security team conducts periodic phishing simulations, and they also conduct periodic employee training on KKR’s security policies and controls and provide other security trainings as part of new employee onboarding. KKR also has a cybersecurity incident response plan that is specific to our insurance business.
In addition, the KKR information security team conducts periodic phishing simulations, as well as periodic employee training on KKR’s security policies and controls and provides other security trainings as part of new employee onboarding. KKR also has a cybersecurity incident response plan that is specific to our insurance business.
The technology and information security risk committee is responsible for overseeing the cybersecurity risk environment for KKR’s asset management business, which includes identifying and monitoring KKR’s technology risks, including those related to information security, business disruption, fraud and privacy related risks, and also promoting cybersecurity awareness at the firm.
The cybersecurity risk environment for KKR’s asset management business, which includes identifying and monitoring KKR’s technology risks, including those related to information security, business disruption, fraud and privacy related risks, and also promoting cybersecurity awareness at the firm.
KKR has established a notification decision framework to determine when the KKR CIRT will provide notifications regarding certain cybersecurity incidents, with different severity thresholds triggering notifications to different recipient groups, including the risk and operations committee, senior members of management, and our Board of Directors or its committees.
KKR has established a notification decision framework to determine when the KKR CIRT will provide notifications regarding certain cybersecurity incidents, with different severity thresholds triggering notifications to different recipient groups, including the Risk and Operations Committee, senior members of management, and our Board of Directors or its committees. 128 Table of Contents The KKR information security team undertakes a variety of measures to monitor and manage the cybersecurity risks of KKR’s asset management business.
He holds a Bachelor of Science in computer science from the New York University Polytechnic School of Engineering, is a Certified Information Systems Security Professional (CISSP) and holds a Series 99 – Operations Professional Exam certification.
KKR’s CISO also has prior experience in various information security roles, including security architecture, application security, engineering and operations. He holds a Bachelor of Science in computer science from the New York University Polytechnic School of Engineering, is a Certified Information Systems Security Professional (CISSP) and holds a Series 99 – Operations Professional Exam certification.
Cybersecurity considerations affect the selection and oversight of our third-party service providers. We perform diligence on third parties that have access to our systems, data or facilities. 127 Tabl e of Contents Members of the KKR CIRT include members of the firm’s legal, technology, compliance, risk, public affairs, fundraising and finance groups.
Cybersecurity considerations affect the selection and oversight of our third-party service providers. We perform cybersecurity-related diligence on third parties that have access to our systems, data or facilities. In addition to the KKR CISO and our Chief Compliance Officer, the KKR CIRT includes members of the firm’s legal, technology, compliance, risk, public affairs, human capital and finance groups.
Risk Factors—Risks Related to Our Business—Cyber-security failures and data security breaches may disrupt or have a material adverse impact on our businesses, operations and investments” in this Annual Report on Form 10-K.
Risk Factors—"Risks Related to Our Business—Cybersecurity failures and data security breaches may disrupt or have a material adverse impact on our businesses, operations and investments.”
KKR also has a Chief Information Security Officer dedicated to our insurance business (the “GA CISO”), who has more than 20 years of experience in various information security and technology roles. The GA CISO leads an information security team that is focused on overseeing the cybersecurity strategy and program for Global Atlantic.
KKR also has a Chief Information Security Officer dedicated to our insurance business (the “Global Atlantic CISO”), who has more than 20 years of experience in various information security and technology roles.
The plan sets forth the roles and responsibilities of the Global Atlantic incident response team, which is comprised of Global Atlantic employees representing key business functions at our insurance business. Global Atlantic utilizes several mechanisms to monitor and manage the cybersecurity risks of our insurance business, including to prevent, and prepare to respond to, an incident.
The plan sets forth the roles and responsibilities of the Global Atlantic incident response team, which is comprised of Global Atlantic employees representing key business functions at our insurance business and is overseen by the Global Atlantic CISO.
The GA CISO reports periodically, including at least annually and more often as circumstances may require, to the risk committee of Global Atlantic’s board of directors (whose members include non-executive directors unaffiliated with KKR) and members of KKR’s risk and operations committee.
The Global Atlantic CISO reports at least annually to the operations & technology committee of Global Atlantic’s board of directors (whose members include non-executive directors unaffiliated with KKR) and members of KKR’s Risk and Operations Committee. The Global Atlantic CISO also provides ad hoc reporting to Global Atlantic’s management-level committees and Global Atlantic’s board of directors and its risk committee.
Material information affecting our insurance business is also reported by the GA CISO or his or her designee to KKR’s risk and operations committee, certain members of which would, as appropriate, report such material information to our Board of Directors or its Audit Committee or Risk Committee.
Material information regarding information security affecting our insurance business is also reported to KKR’s Risk and Operations Committee and to the Audit Committee or Risk Committee of KKR’s Board of Directors.
Cybersecurity Risk Management and Strategy KKR’s asset management business has a cybersecurity incident response plan as a key component of its cybersecurity program, which is generally incorporated as part of our enterprise risk management program.
Cybersecurity Risk Management and Strategy KKR’s asset management business has a cybersecurity incident response plan, which was developed taking into account industry standard guidance provided by institutes such as the National Institute of Standards and Technology. This plan is a key component of the cybersecurity program, which is generally incorporated within our enterprise risk management framework.
CYBERSECURITY Cybersecurity Governance KKR has a Chief Information Security Officer (the “KKR CISO”), who leads an information security team (the “KKR information security team”) that is responsible for information security at KKR’s asset management business, including its cybersecurity strategy and program, which includes, among other things, annual employee training about cybersecurity risks and new employee onboarding about KKR’s security policies.
The Global Atlantic CISO leads an information security team that is focused on overseeing the cybersecurity strategy and program for Global Atlantic, which includes, among other things, annual employee training about cybersecurity risks and new employee onboarding about Global Atlantic’s security policies.
Periodically, including at least annually and more often as circumstances may require, management will present to the Audit Committee and the Risk Committee of our Board of Directors on various topics relating to KKR's technology risks, including KKR’s cybersecurity program (including the results of an annual cybersecurity table top exercise), cybersecurity issues (including those relating to data protection, insider threats, regulatory changes, and geopolitical cyber threat management), and risk management (including the results of periodic technology audits).
At least annually, management will present to the Audit Committee and the Risk Committee of our Board of Directors on various topics relating to KKR's technology risks, including KKR’s cybersecurity program, the current cybersecurity threat landscape, and risk management.
The technology and information security risk committee reports to KKR’s risk and operations committee, which consists of senior level employees of KKR who focus on KKR’s overall operations and enterprise risk management, including the Chief Operating Officer, Chief Compliance Officer, Chief Legal Officer and Chief Financial Officer.
The Operational Risk Committee reports to KKR’s Risk and Operations Committee, which is comprised of senior employees from across our asset management and insurance businesses and operating functions. KKR's Risk and Operations Committee includes our Chief Financial Officer, Chief Operating Officer, Chief Legal Officer and General Counsel, Chief Compliance Officer.
The KKR CISO chairs the technology and information security risk committee for KKR’s asset management business, which consists of employees from the firm’s technology group and other groups, including risk, legal and compliance.
The KKR CISO is a member of the firm’s Operational Risk Committee. The Operational Risk Committee is comprised of senior employees from across our asset management business and operating functions.
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The KKR information security team’s mandates can be broadly grouped into three categories: (i) operations and engineering, (ii) threat detection and response and (iii) governance. The KKR information security team members have a variety of relevant skill sets and expertise.
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ITEM 1C. CYBERSECURITY Cybersecurity Governance KKR’s Chief Information Security Officer (the “KKR CISO”) leads an information security team (the “KKR information security team”) whose responsibilities include securing data from unauthorized use or access.
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In addition, KKR information security team members have various backgrounds in information security, including in financial services and critical infrastructure, and the team maintains various levels of certifications – including CISSP, GIAC security operations certification, certified information security manager, and other certifications focused on specific technologies.
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The committee focuses on significant operating and business risks, which includes among others, regulatory, cybersecurity, operational, geopolitical, and reputational risks, and is responsible for ensuring risks are identified, assessed, managed and mitigated effectively.
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The GA CISO also provides ad hoc reporting to Global Atlantic’s management-level committees and Global Atlantic’s board of directors and its risk committee.
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Global Atlantic utilizes several mechanisms to monitor and manage the cybersecurity risks of our insurance business, including to prevent, and prepare to respond to, an incident.
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The KKR information security team undertakes a variety of measures to monitor and manage the cybersecurity risks of KKR’s asset management business. For example, the KKR information security team monitors our technology infrastructure with tools designed to detect suspicious behavior.
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Some of these third-party monitoring functions continue throughout the year while other third-party security experts are periodically retained to audit specific areas of the cybersecurity program.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS. For a discussion of KKR's legal proceedings, see the section entitled "Litigation" appearing in Note 24 "Commitments and Contingencies" in our financial statements included elsewhere in this report, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 128 Tabl e of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS. For a discussion of KKR's legal proceedings, see the section entitled "Legal Proceedings" appearing in Note 24 "Commitments and Contingencies" in our financial statements included elsewhere in this report, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 129 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Common stock (amounts in thousands, except share and per share amounts) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) Month #1 (October 1, 2023 to October 31, 2023) — $ — — $ 193,999 Month #2 (November 1, 2023 to November 30, 2023) — $ — — $ 193,999 Month #3 (December 1, 2023 to December 31, 2023) — $ — — $ 193,999 Total through December 31, 2023 — (1) On February 7, 2023, KKR announced the increase to the total available amount under the repurchase program to $500 million.
Biggest changeIssuer Purchases of Common Stock (amounts in thousands, except share and per share amounts) Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) Month #1 (October 1, 2024 to October 31, 2024) — $ — — $ 68,939 Month #2 (November 1, 2024 to November 30, 2024) — $ — — $ 68,856 Month #3 (December 1, 2024 to December 31, 2024) — $ — — $ 68,820 Total through December 31, 2024 — — $ 68,820 (1) In April 2024, the share repurchase program was amended such that when the remaining available amount under the share repurchase program becomes $50 million or less, the total available amount under the share repurchase program will automatically add an additional $500 million to the then remaining available amount of $50 million or less.
In addition to the repurchases of common stock described above, the repurchase program is used for the retirement (by cash settlement or the payment of tax withholding amounts upon net settlement) of equity awards issued pursuant to our Equity Incentive Plans representing the right to receive shares of common stock.
In addition to the repurchases of common stock described above, the repurchase program is used for the retirement (by cash settlement or the payment of tax withholding amounts upon net settlement) of equity awards issued pursuant to our Equity Incentive Plan representing the right to receive shares of common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Shares of our common stock are listed on the NYSE under the symbol "KKR." The number of holders of record of our common stock as of February 27, 2024 was 43.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES. Shares of our common stock are listed on the NYSE under the symbol "KKR." The number of holders of record of our common stock as of February 26, 2025 was 43.
Dividend Policy Under our current dividend policy for common stock that we announced on February 6, 2024, we expect to pay our common stockholders an annualized dividend of $0.70 per share of common stock, equal to a quarterly dividend of $0.175 per share of common stock, beginning with the dividend to be declared with respect to the first quarter of 2024.
Dividend Policy Under our current dividend policy for common stock that we announced on February 4, 2025, we expect to pay our common stockholders an annualized dividend of $0.74 per share of common stock, equal to a quarterly dividend of $0.185 per share of common stock, beginning with the dividend to be declared with respect to the first quarter of 2025.
The table below sets forth the information with respect to repurchases made by or on behalf of KKR & Co. Inc. or any "affiliated purchaser" (as defined in Rule 10b-18(a)(3) under the Exchange Act) of our common stock for the periods presented.
As of January 31, 2025, there is approximately $69 million remaining under KKR's share repurchase program. The table below sets forth the information with respect to repurchases made by or on behalf of KKR & Co. Inc. or any "affiliated purchaser" (as defined in Rule 10b-18(a)(3) under the Exchange Act) of our common stock for the periods presented.
On February 6, 2024, we declared a regular dividend of $0.165 per share of common stock under our prior dividend policy for the quarter ended December 31, 2023, payable on March 1, 2024 to common stockholders of record as of the close of business on February 16, 2024.
On February 4, 2025, we declared a regular dividend of $0.175 per share of common stock under our prior dividend policy for the quarter ended December 31, 2024, payable on February 28, 2025 to common stockholders of record as of the close of business on February 14, 2025.
During the fourth quarter of 2023, no shares of common stock were repurchased and 160,718 equity awards were retired.
During the fourth quarter of 2024, no shares of common stock were repurchased, and 246,298 equity awards were retired.
See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity—Sources of Liquidity." In addition, under Section 170 of the DGCL, our Board of Directors may only declare and pay dividends either out of our surplus (as defined in DGCL) or in case there is no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. 129 Tabl e of Contents Share Repurchases in the Fourth Quarter of 2023 As of February 6, 2024, there was approximately $194 million remaining for further repurchases under KKR's current share repurchase program.
See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity—Sources of Liquidity." In addition, under Section 170 of the DGCL, our Board of Directors may only declare and pay dividends either out of our surplus (as defined in DGCL) or in case there is no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. 130 Table of Contents Share Repurchases in the Fourth Quarter of 2024 Under our current share repurchase program, KKR is authorized to repurchase its common stock from time to time in open market transactions, in privately negotiated transactions or otherwise.
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Under our current repurchase program, KKR is authorized to repurchase its common stock from time to time in open market transactions, in privately negotiated transactions or otherwise.
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The repurchase program does not have an expiration date. ITEM 6. [Reserved] 130 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCapital Commitments The agreements governing our active investment funds generally require the general partners of the funds to make minimum capital commitments to such funds, which generally range from 2% to 8% of a fund's total capital commitments at final closing, but may be greater for certain funds (i) where we are pursuing newer strategies, (ii) where third party investor demand is limited, and (iii) where a larger commitment is consistent with the asset allocation strategy in our Principal Activities business line, including core investments and exposure to the Asia-Pacific region. 197 Table of Contents The following table presents our uncalled commitments to our active investment funds and other vehicles as of December 31, 2023: Uncalled Commitments Private Equity ($ in millions) Core Investment Vehicles $ 3,066 Ascendant Fund 312 European Fund VI 146 Health Care Strategic Growth Fund II 90 Asian Fund IV 84 North America Fund XIII 80 Next Generation Technology Growth Fund III 21 Global Impact Fund II 17 Other Private Equity Vehicles 938 Total Private Equity Commitments 4,754 Real Assets Asia Pacific Infrastructure Investors II 342 Real Estate Partners Americas III 80 Asia Real Estate Partners 63 Real Estate Partners Europe II 63 Global Infrastructure Investors IV 17 Other Real Assets Vehicles 1,330 Total Real Assets Commitments 1,895 Credit and Liquid Strategies Opportunities Fund II 116 Asia Credit Opportunities 94 Dislocation Opportunities Fund 69 Asset-Based Finance Partners 68 Lending Partners IV 16 Lending Partners Europe II 16 Private Credit Opportunities Partners II 7 Other Credit and Liquid Strategies Vehicles 633 Total Credit and Liquid Strategies Commitments 1,019 Total Uncalled Commitments $ 7,668 Other Commitments In addition to the uncalled commitments to our investment funds as shown above, KKR has entered into contractual commitments primarily with respect to underwriting transactions, debt financing, revolving credit facilities, and equity syndications in our Capital Markets business line.
Biggest changeCapital Commitments The agreements governing our active investment funds generally require the general partners of the funds to make minimum capital commitments to such funds, which generally range from 2% to 8% of a fund's total capital commitments at final closing, but may be greater for certain funds (i) where we are pursuing newer strategies, (ii) where third party investor demand is limited, and (iii) where a larger commitment is consistent with the asset allocation strategy in our Principal Activities business line, and in our Strategic Holdings segment.
However, because these amounts are funded by, and earned from, noncontrolling interests, upon consolidation under GAAP, KKR's allocated share of the net income from the consolidated investment funds and other vehicles is increased by the amount of fees that are eliminated.
However, because these amounts are funded by, and earned from, noncontrolling interests, upon consolidation under GAAP, KKR's allocated share of the net income from the consolidated investment funds and other investment vehicles is increased by the amount of fees that are eliminated.
Accordingly, net income (loss) attributable to KKR would be unchanged if such investment funds and other vehicles were not consolidated.
Accordingly, net income (loss) attributable to KKR would be unchanged if such investment funds and other investment vehicles were not consolidated.
Fee credits owed to consolidated investment funds and other vehicles are eliminated upon consolidation under GAAP. However, because these amounts are owed to noncontrolling interests, upon consolidation under GAAP, KKR's allocated share of the net income from the consolidated investment funds is decreased by the amount of fee credits that are eliminated.
Fee credits owed to consolidated investment funds and other investment vehicles are eliminated upon consolidation under GAAP. However, because these amounts are owed to noncontrolling interests, upon consolidation under GAAP, KKR's allocated share of the net income from the consolidated investment funds is decreased by the amount of fee credits that are eliminated.
Accordingly, net income (loss) attributable to KKR would be unchanged if such investment funds and other vehicles were not consolidated.
Accordingly, net income (loss) attributable to KKR would be unchanged if such investment funds and other investment vehicles were not consolidated.
Since the fair value of the underlying investments varies between reporting periods, it is necessary to make adjustments to the amounts recorded as carried interest to reflect either (a) positive performance, resulting in an increase in the carried interest allocated to the general partner or (b) negative performance that would cause the amount due to KKR to be less than the amount previously recognized, resulting in a negative adjustment to carried interest allocated to the general partner.
Since the fair value of the underlying investments varies between reporting periods, it is necessary to make adjustments to the amounts recorded as carried interest to reflect either (a) positive performance, resulting in an increase in the carried interest allocated to the general partner or (b) negative performance that would cause the amount due to KKR to be less than the amount previously recognized, resulting in a negative adjustment to carried interest allocated to the general partner.
In each case, it is necessary to calculate the carried interest on cumulative results compared to the carried interest recorded to date and to make the required positive or negative adjustments.
In each case, it is necessary to calculate the carried interest on cumulative results compared to the carried interest recorded to date and to make the required positive or negative adjustments.
Investment gains and losses relating to our general partner capital interest in our unconsolidated funds are not reflected in our discussion and analysis of Net Gains (Losses) from Investment Activities. Our economics associated with these gains and losses are reflected in Capital Allocation-Based Income (Loss) as described above.
Investment gains and losses relating to our general partner capital interest in our unconsolidated funds are not reflected in our discussion and analysis of Net Gains (Losses) from Investment Activities. Our economics associated with these gains and losses are reflected in Capital Allocation-Based Income (Loss) as described above.
See "Risk Factors" and "—Business Environment" for more information about the factors that may impact our business, financial performance, operating results and valuation.
See "Risk Factors" and "—Business Environment" for more information about the factors that may impact our business, financial performance, operating results and valuation.
Dividend Income During the year ended December 31, 2022, dividend income was primarily from (i) our consolidated core plus and opportunistic real estate equity funds and (ii) our investment in Exact Group B.V. held in our consolidated core vehicles.
During the year ended December 31, 2022, dividend income was primarily from (i) our consolidated core plus and opportunistic real estate equity funds and (ii) our investment in Exact Group B.V. held in our consolidated core investment vehicles.
The prices of publicly held companies may experience volatile changes following the reporting period.
The prices of publicly held companies may experience volatile changes following the reporting period.
The date on which we begin to earn fees (as specified above) is not guaranteed to occur and may not occur for an extended period of time. If and when such management fees are earned, a portion of existing FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any new management fees earned.
The date on which we begin to earn fees (as specified above) is not guaranteed to occur and may not occur for an extended period of time. If and when such management fees are earned, a portion of existing FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any new management fees earned.
The decrease was primarily attributable to capital called from fund investors to make investments during the period, which was partially offset by new capital commitments from fund investors.
The decrease was primarily attributable to capital called from fund investors to make investments during the period, which was partially offset by new capital commitments from fund investors.
While each of the capital markets transactions that we undertake in this business line is separately negotiated, our fee rates are generally higher with respect to underwriting or syndicating equity offerings than with respect to debt offerings, and the amount of fees that we earn for similar transactions generally correlates with overall transaction sizes.
While each of the capital markets transactions that we undertake in this business line is separately negotiated, our fee rates are generally higher with respect to underwriting or syndicating equity offerings than with respect to debt offerings, and the amount of fees that we earn for similar transactions generally correlates with overall transaction sizes.
This capital will generally begin to earn management fees upon deployment of the capital or upon the commencement of the fund's investment period. The average annual management fee rate associated with this capital is approximately 1.2%.
This capital will generally begin to earn management fees upon deployment of the capital or upon the commencement of the fund's investment period. The average annual management fee rate associated with this capital is approximately 1.2%.
The decrease was primarily attributable to capital called from fund investors to make investments during the period, which was partially offset by new capital commitments from fund investors.
The decrease was primarily attributable to capital called from fund investors to make investments during the period, which was partially offset by new capital commitments from fund investors.
The increase was primarily attributable to new commitments from fund investors, which was partially offset by capital called from fund investors to make investments during the period.
The increase was primarily attributable to new capital commitments from fund investors, which was partially offset by capital called from fund investors to make investments during the period.
The number of large private equity investments made in any quarterly or year-to-date period is volatile and, consequently, a significant amount of capital invested in one period or a few periods may not be indicative of a similar level of capital deployment in future periods.
The number of large private equity investments made in any quarterly or year-to-date period is volatile and, consequently, a significant amount of capital invested in one period or a few periods may not be indicative of a similar level of capital deployment in future periods.
For a further discussion of our fair value measurements and fair value of investments, see the above "—Critical Accounting Policies and Estimates—Fair Value Measurements." Critical Accounting Policies and Estimates – Insurance Policy liabilities Policy liabilities, or collectively, “reserves,” are the portion of past premiums or assessments received that are set aside to meet future policy and contract obligations as they become due.
For a further discussion of our fair value measurements and fair value of investments, see above "—Critical Accounting Policies and Estimates—Fair Value Measurements." Critical Accounting Policies and Estimates – Insurance Policy Liabilities Policy liabilities, or collectively, “reserves,” are the portion of past premiums or assessments received that are set aside to meet future policy and contract obligations as they become due.
This sensitivity considers the direct effect of such changes only and not changes in any other assumptions used in or items considered in the measurement of such balances.
This sensitivity considers the direct effect of such changes only and not changes in any other assumptions used in or items considered in the measurement of such balances.
This sensitivity considers the direct effect of such changes only and not changes in any other assumptions used in or items considered in the measurement of such balances.
This sensitivity considers the direct effect of such changes only and not changes in any other assumptions used in or items considered in the measurement of such balances.
For a discussion of other factors that affected KKR's interest income, see "—Analysis of Asset Management Segment Operating Results." Interest Expense The increase in interest expense during the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to (i) the increase in the amount of borrowings outstanding from certain consolidated funds and other vehicles, (ii) the impact of closing CLOs that are consolidated subsequent to December 31, 2022, (iii) higher interest rates on floating rate debt obligations held in consolidated CLOs, and (iv) the impact of issuances of KKR senior notes after December 31, 2022.
For a discussion of other factors that affected KKR's interest income, see "—Analysis of Asset Management Segment Operating Results." Interest Expense The increase in interest expense during the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to (i) the increase in the amount of borrowings outstanding from certain consolidated funds and other investment vehicles, (ii) the impact of closing CLOs that are consolidated subsequent to December 31, 2022, (iii) higher interest rates on floating rate debt obligations held in consolidated CLOs, and (iv) the impact of issuances of KKR senior notes after December 31, 2022.
For the year ended December 31, 2023 net unrealized gains were primarily generated in the following asset classes: • Traditional private equity and core private equity, which were primarily impacted by (i) the positive returns of global equity markets and the related increase of market multiples used in the market comparables methodology for the valuation of Level III investments, and (ii) overall positive operating performance of its portfolio companies; • Credit, which were primarily impacted by positive performance of our CLOs and by the tightening of the credit spreads during the year; and • Infrastructure, which primarily benefited from the positive operating performance of certain infrastructure assets and to a lesser extent by the positive returns of global equity markets and the related increase of market multiples used in the market comparables methodology for the valuation of Level III investments.
For the year ended December 31, 2023 net unrealized gains were primarily generated in the following asset classes: • Traditional private equity (excluding core private equity), which were primarily impacted by (i) the positive returns of global equity markets and the related increase of market multiples used in the market comparables methodology for the valuation of Level III investments and (ii) overall positive operating performance of its portfolio companies; • Credit, which were primarily impacted by positive performance of our CLOs and by the tightening of the credit spreads during the year; and • Infrastructure, which primarily benefited from the positive operating performance of certain infrastructure assets and, to a lesser extent, by the positive returns of global equity markets and the related increase of market multiples used in the market comparables methodology for the valuation of Level III investments.
Partially offsetting the increase were (i) payments to Global Atlantic policyholders, (ii) distributions to, and redemptions from, fund investors at certain leveraged credit funds, and (iii) redemptions at Marshall Wace. See also "—Business Environment" for more information about the factors that may impact our business, financial performance, operating results and valuations.
Partially offsetting the increase were (i) payments to Global Atlantic policyholders, (ii) distributions to, and redemptions from, fund investors at certain leveraged credit funds, and (iii) redemptions at Marshall Wace. See also "Risk Factors" and "—Business Environment" for more information about the factors that may impact our business, financial performance, operating results, and valuations.
The liability is estimated using current assumptions that include mortality, lapses, and expenses. These current assumptions are based on judgments that consider Global Atlantic’s historical experience, industry data, and other factors, and are updated quarterly and the current period change in the liability is recognized as a separate component of benefit expense in the consolidated income statement.
The liability is estimated using current assumptions that include mortality, morbidity, lapses, and expenses. These current assumptions are based on judgments that consider Global Atlantic’s historical experience, industry data, and other factors, and are updated quarterly and the current period change in the liability is recognized as a separate component of benefit expense in the consolidated income statement.
Fee related performance revenues consists of performance fees (i) to be received from our investment funds, vehicles and accounts on a recurring basis, and (ii) that are not dependent on a realization event involving investments held by the investment fund, vehicle or account.
Fee related performance revenues consists of performance fees (i) expected to be received from our investment funds, vehicles and accounts on a recurring basis, and (ii) that are not dependent on a realization event involving investments held by the investment fund, vehicle or account.
If and when such management fees are earned, a portion of existing FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any new management fees earned. 169 Table of Contents Real Assets The following table reflects the changes in the FPAUM of our Real Assets business line from December 31, 2022 to December 31, 2023: ($ in millions) December 31, 2022 $ 103,532 New Capital Raised 16,645 Distributions and Other (6,766) Redemptions (311) Net Changes in Fee Base of Certain Funds (805) Change in Value (41) December 31, 2023 $ 112,254 FPAUM of our Real Assets business line was $112.3 billion at December 31, 2023, an increase of $8.8 billion, compared to $103.5 billion at December 31, 2022.
If and when such management fees are earned, a portion of existing FPAUM may cease paying fees or pay lower fees, thus offsetting a portion of any new management fees earned. 180 Table of Contents Real Assets The following table reflects the changes in the FPAUM of our Real Assets business line from December 31, 2022 to December 31, 2023: ($ in millions) December 31, 2022 $ 103,532 New Capital Raised 16,645 Distributions and Other (6,766) Redemptions (311) Net Changes in Fee Base of Certain Funds (805) Change in Value (41) December 31, 2023 $ 112,254 FPAUM of our Real Assets business line was $112.3 billion at December 31, 2023, an increase of $8.8 billion, compared to $103.5 billion at December 31, 2022.
The decreased valuations of individual companies in our privately held investments, in the aggregate, relating primarily to challenging market and economic conditions. See "Risk Factors" and "—Business Environment" for more information about the factors that may impact our business, financial performance, operating results and valuation.
The decreased valuations of individual companies in our privately held investments, in the aggregate, relating primarily to challenging market and economic conditions. See "Risk Factors and "—Business Environment" for more information about the factors that may impact our business, financial performance, operating results, and valuations.
Fee Related Performance Revenues refers to the realized portion of Incentive Fees from certain AUM that has an indefinite term and for which there is no immediate requirement to return invested capital to investors upon the realization of investments.
Fee Related Performance Revenues refers to the realized portion of performance fees from certain AUM that has an indefinite term and for which there is no immediate requirement to return invested capital to investors upon the realization of investments.
See "Risk Factors" and "—Business Environment" for more information about the factors that may impact our business, financial performance, operating results and valuations. 168 Table of Contents Credit and Liquid Strategies The following table reflects the changes in the AUM of our Credit and Liquid Strategies business line from December 31, 2022 to December 31, 2023: ($ in millions) December 31, 2022 $ 220,158 New Capital Raised 46,581 Distributions and Other (18,237) Redemptions (8,036) Change in Value 5,025 December 31, 2023 $ 245,491 AUM of our Credit and Liquid Strategies business line totaled $245.5 billion at December 31, 2023, an increase of $25.3 billion compared to AUM of $220.2 billion at December 31, 2022.
See "Risk Factors" and "—Business Environment" for more information about the factors that may impact our business, financial performance, operating results, and valuations. 179 Table of Contents Credit and Liquid Strategies The following table reflects the changes in the AUM of our Credit and Liquid Strategies business line from December 31, 2022 to December 31, 2023: ($ in millions) December 31, 2022 $ 220,158 New Capital Raised 46,581 Distributions and Other (18,237) Redemptions (8,036) Change in Value 5,025 December 31, 2023 $ 245,491 AUM of our Credit and Liquid Strategies business line totaled $245.5 billion at December 31, 2023, an increase of $25.3 billion compared to AUM of $220.2 billion at December 31, 2022.
KKR generally calculates the carried interest that would be due to KKR for each investment fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of the reporting date, irrespective of whether such amounts have been realized.
KKR calculates the carried interest that would be due to KKR for each investment fund, pursuant to the fund agreements, as if the fair value of the underlying investments were realized as of the reporting date, irrespective of whether such amounts have been realized.
Incentive fees consist of performance fees earned from (i) our hedge fund partnerships, (ii) investment management agreements with KKR sponsored investment vehicles, and (iii) investment management agreements to provide KKR’s investment strategies to funds managed by a UK investment fund manager.
Incentive fees consist primarily of performance fees earned from (i) our hedge fund partnerships, (ii) investment management agreements with KKR sponsored investment vehicles, and (iii) investment management agreements to provide KKR’s investment strategies to funds managed by a UK investment fund manager.
Common Stockholders $ 3,680,514 $ (590,664) $ 4,271,178 Consolidated Results of Operations (GAAP Basis) - Asset Management Revenues For the years ended December 31, 2023 and 2022, revenues consisted of the following: Years Ended December 31, 2023 December 31, 2022 Change ($ in thousands) Management Fees $ 1,843,144 $ 1,682,466 $ 160,678 Fee Credits (297,936) (532,355) 234,419 Transaction Fees 1,075,204 1,316,637 (241,433) Monitoring Fees 138,339 131,750 6,589 Incentive Fees 29,117 33,537 (4,420) Expense Reimbursements 75,687 102,927 (27,240) Consulting Fees 100,314 86,665 13,649 Total Fees and Other 2,963,869 2,821,627 142,242 Carried Interest 2,304,623 (2,068,662) 4,373,285 General Partner Capital Interest 538,814 (431,847) 970,661 Total Capital Allocation-Based Income (Loss) 2,843,437 (2,500,509) 5,343,946 Total Revenues - Asset Management $ 5,807,306 $ 321,118 $ 5,486,188 Fees and Other Total Fees and Other for the year ended December 31, 2023 increased compared to the year ended December 31, 2022 primarily as a result of an increase in management fees and a decrease in fee credits, which were partially offset by a lower level of transaction fees.
Common Stockholders $ 3,680,514 $ (590,664) $ 4,271,178 149 Table of Contents Consolidated Results of Operations (GAAP Basis) - Asset Management and Strategic Holdings Revenues For the years ended December 31, 2023 and 2022, revenues consisted of the following: Years Ended December 31, 2023 December 31, 2022 Change ($ in thousands) Management Fees $ 1,843,144 $ 1,682,466 $ 160,678 Fee Credits (297,936) (532,355) 234,419 Transaction Fees 1,075,204 1,316,637 (241,433) Monitoring Fees 138,339 131,750 6,589 Incentive Fees 29,117 33,537 (4,420) Expense Reimbursements 75,687 102,927 (27,240) Consulting Fees 100,314 86,665 13,649 Total Fees and Other 2,963,869 2,821,627 142,242 Carried Interest 2,304,623 (2,068,662) 4,373,285 General Partner Capital Interest 538,814 (431,847) 970,661 Total Capital Allocation-Based Income (Loss) 2,843,437 (2,500,509) 5,343,946 Total Revenues $ 5,807,306 $ 321,118 $ 5,486,188 Fees and Other Total Fees and Other for the year ended December 31, 2023 increased compared to the year ended December 31, 2022 primarily as a result of an increase in management fees and a decrease in fee credits, which were partially offset by a lower level of transaction fees.
This capital will generally begin to earn management fees upon deployment of the capital or upon the commencement of the fund's investment period. The average annual management fee rate associated with this capital is approximately 1.0%.
This capital will generally begin to earn management fees upon deployment of the capital or upon the commencement of the fund's investment period. The average annual management fee rate associated with this capital is approximately 1.1%.
The increase was partially offset by (i) a lower level of management fees from Americas Fund XII due to a step-down in the management fee rate in 2023 and a decrease in invested capital, (ii) management fees earned on new capital raised for North America Fund XIII in the first quarter of 2022 that was retroactive to the start of the fund's investment period, and (iii) a lower level of management fees from Asian Fund III due to a decrease in its fee base, invested capital, from the sale of investments.
The increase was partially offset by (i) a lower level of management fees from Americas Fund XII due to a step-down in the management fee rate in 2023 and a decrease in invested capital, (ii) management fees earned on new capital raised for North America Fund XIII in the first quarter of 2022 that was retroactive to the start of the fund's investment period, and (iii) a lower level of management fees from Asian Fund III due to a decrease in its fee base, invested capital, as a result of the sale of investments.
Liquidity Needs We expect that our (including Global Atlantic's) primary liquidity needs will consist of cash required to meet various obligations, including, without limitation, to: • continue to support and grow our asset management business, including seeding new investment strategies, supporting capital commitments made by our vehicles to existing and future funds, co-investments and any net capital requirements of our capital markets companies and otherwise supporting the investment vehicles that we sponsor; • continue to support and grow our insurance business; • grow and expand our businesses generally, including by acquiring or launching new, complementary or adjacent businesses; • warehouse investments in portfolio companies or other investments for the benefit of one or more of our funds, accounts or CLOs or other investment vehicles pending the contribution of committed capital by the fund investors in such vehicles, and advancing capital to them for operational or other needs; • service debt obligations including the payment of obligations at maturity, on interest payment dates or upon redemption, as well as any contingent liabilities, including from litigation, that may give rise to future cash payments, including funding requirements to levered investment vehicles or structured transactions; • fund cash operating expenses and contingencies, including for litigation matters and guarantees; • pay corporate income taxes and other taxes; • pay policyholders and amounts in our insurance business related to investment, reinvestment, reinsurance or funding agreement activity; • pay amounts that may become due under our tax receivable agreement; • pay cash dividends in accordance with our dividend policy for our common stock or the terms of our preferred stock, if any; • underwrite commitments, advance loan proceeds and fund syndication commitments within our capital markets business; • post or return collateral in respect of derivative contracts; • acquire other assets (including businesses, investments and other assets) for our businesses, some of which may be required to satisfy regulatory requirements for our capital markets business or risk retention requirements for CLOs (to the extent they may apply); • address capital needs of regulated subsidiaries as well as non-regulated subsidiaries; and • repurchase shares of our common stock or retire equity awards pursuant to the share repurchase program or repurchase or redeem other securities issued by us.
Liquidity Needs We expect that our primary liquidity needs will consist of cash required to meet various obligations, including, without limitation, to: • continue to support and grow our asset management business, including seeding new investment strategies, supporting capital commitments made by our investment vehicles to existing and future funds, co-investments and any net capital requirements of our capital markets companies and otherwise supporting the investment vehicles that we sponsor; • continue to support and grow our insurance business; • continue to support and grow our strategic holdings business; • grow and expand our businesses generally, including by acquiring or launching new, complementary, or adjacent businesses; • warehouse investments in portfolio companies or other investments for the benefit of one or more of our funds, accounts or CLOs or other investment vehicles pending the contribution of committed capital by the fund investors in such investment vehicles, and advancing capital to them for operational or other needs; • service debt obligations including the payment of obligations at maturity, on interest payment dates or upon redemption, as well as any contingent liabilities, including from litigation, that may give rise to future cash payments, including funding requirements to levered investment vehicles or structured transactions; • fund cash operating expenses and contingencies, including for litigation matters and guarantees; • pay corporate income taxes and other taxes; • pay policyholders and amounts in our insurance business related to investment, reinvestment, reinsurance, or funding agreement activity; • pay amounts that may become due under our tax receivable agreement; • pay cash dividends in accordance with our dividend policy for our common stock or the terms of our preferred stock, if any; • underwrite commitments, advance loan proceeds, and fund syndication commitments within our capital markets business; 193 Table of Contents • post or return collateral in respect of derivative contracts; • acquire other assets (including businesses, investments, and other assets) for our businesses, some of which may be required to satisfy regulatory requirements for our capital markets business or risk retention requirements for CLOs (to the extent they may apply); • address capital needs of regulated subsidiaries as well as non-regulated subsidiaries; and • repurchase shares of our common stock or retire equity awards pursuant to the share repurchase program or repurchase or redeem other securities issued by us.
Pursuant to Global Atlantic's investment guidelines, Global Atlantic actively monitors the percentage of its portfolio that is held in investments rated NAIC 3 or lower and must obtain an additional approval from Global Atlantic's management investment committee before making a significant investment in an asset rated NAIC 3 or lower. 190 Table of Contents Corporate fixed maturity securities Global Atlantic maintains a diversified portfolio of corporate fixed maturity securities across industries and issuers.
Pursuant to Global Atlantic's investment guidelines, Global Atlantic actively monitors the percentage of its portfolio that is held in investments rated NAIC 3 or lower and must obtain an additional approval from Global Atlantic's management investment committee before making a significant investment in an asset rated NAIC 3 or lower. 187 Table of Contents Corporate Fixed Maturity Securities Global Atlantic maintains a diversified portfolio of corporate fixed maturity securities across industries and issuers.
As of December 31, 2023, certain of our investment funds had met the first and second criteria, as described above, but did not meet the third criteria. In these cases, carried interest accrues on the consolidated statement of operations, but will not be distributed in cash to us as the general partner of an investment fund upon a realization event.
As of December 31, 2024, certain of our investment funds had met the first and second criteria, as described above, but did not meet the third criteria. In these cases, carried interest accrues on the consolidated statement of operations, but will not be distributed in cash to us as the general partner of an investment fund upon a realization event.
For a discussion of other factors that affected KKR's interest expense, see "—Analysis of Non-GAAP Performance Measures." Expenses - Asset Management Compensation and Benefits The increase in compensation and benefits during the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to accrued carried interest compensation in the current period compared to the reversal of previously recognized carried interest compensation in the prior period.
For a discussion of other factors that affected KKR's interest expense, see "—Analysis of Non-GAAP Performance Measures." Expenses Compensation and Benefits The increase in compensation and benefits during the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to accrued carried interest compensation in the current period compared to the reversal of previously recognized carried interest compensation in the prior period.
See "Risk Factors" and "—Business Environment" for more information about the factors, such as volatility, that may impact our business, financial performance, operating results and valuations. 167 Table of Contents The most significant increases in the value of our privately held investments were increases in USI, Inc., Cloudera, Inc. (technology sector), and Exact Holdings B.V.
See "Risk Factors" and "—Business Environment" for more information about the factors, such as volatility, that may impact our business, financial performance, operating results, and valuations. 178 Table of Contents The most significant increases in the value of our privately held investments were increases in USI, Inc., Cloudera, Inc. (technology sector), and Exact Holdings B.V.
As of December 31, 2023, approximately $546 million of carried interest was subject to this clawback obligation, assuming that all applicable carry-paying funds and their alternative investment vehicles were liquidated at their December 31, 2023 fair values. As of December 31, 2023, Asian Fund II is the only investment fund with a clawback obligation in excess of $50 million.
As of December 31, 2024, approximately $546 million of carried interest was subject to this clawback obligation, assuming that all applicable carry-paying funds and their alternative investment vehicles were liquidated at their December 31, 2024 fair values. As of December 31, 2024, Asian Fund II is the only investment fund with a clawback obligation in excess of $50 million.
For a discussion of other factors that affected KKR's dividend income, see "—Analysis of Asset Management Segment Operating Results." Interest Income The increase in interest income during the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to (i) the impact of closing CLOs that are consolidated subsequent to December 31, 2022, (ii) higher interest rates on floating rate investments held in consolidated CLOs and our consolidated private credit funds, and (iii) a higher level of interest income from certain of our consolidated private credit funds, related to an increase in the amount of capital deployed.
For a discussion of other factors that affected KKR's dividend income, see "—Analysis of Asset Management Segment Operating Results." 152 Table of Contents Interest Income The increase in interest income during the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to (i) the impact of closing CLOs that are consolidated subsequent to December 31, 2022, (ii) higher interest rates on floating rate investments held in consolidated CLOs and our consolidated private credit funds, and (iii) a higher level of interest income from certain of our consolidated private credit funds, related to an increase in the amount of capital deployed.
Inc. receives distributions from KKR Group Partnership, holders of exchangeable securities receive their pro rata share of such distributions from KKR Group Partnership. The declaration and payment of dividends to our common stockholders will be at the sole discretion of our Board of Directors, and our dividend policy may be changed at any time.
When KKR & Co. Inc. receives distributions from KKR Group Partnership, holders of exchangeable securities receive their pro rata share of such distributions from KKR Group Partnership. The declaration and payment of dividends to our common stockholders will be at the sole discretion of our Board of Directors, and our dividend policy may be changed at any time.
Consistent with the NAIC Process and Procedures Manual, an NRSRO rating was assigned based on the following criteria: (i) the equivalent S&P rating where the security is rated by one NRSRO; (ii) the equivalent S&P rating of the lowest NRSRO when the security is rated by two NRSROs; and (iii) the equivalent S&P rating of the second lowest NRSRO if the security is rated by three or more NRSROs.
Consistent with the NAIC Process and Procedures Manual, a NRSRO rating was assigned based on the following criteria: (i) the equivalent S&P rating where the security is rated by one NRSRO; (ii) the equivalent S&P rating of the lowest NRSRO when the security is rated by two NRSROs; and (iii) the equivalent S&P rating of the second lowest NRSRO if the security is rated by three or more NRSROs.
As of December 31, 2023, upon completion by, where applicable, independent valuation firms of certain limited procedures requested to be performed by them on certain Level III investments, the independent valuation firms concluded that the fair values, as determined by KKR (including Global Atlantic), of those investments reviewed by them were reasonable.
As of December 31, 2024, upon completion by, where applicable, independent valuation firms of certain limited procedures requested to be performed by them on certain Level III investments, the independent valuation firms concluded that the fair values, as determined by KKR (including Global Atlantic), of those investments reviewed by them were reasonable.
See Note 24 "Commitments and Contingencies—Contingent Repayment Guarantees" in our financial statements included elsewhere in this report for further information. See also the negative amounts included in the Carried Interest column in the table included in this Item 7 in “Asset Management—Private Equity” for further information on clawback obligations.
See Note 24 "Commitments and Contingencies—Contingent Repayment Guarantees" in our financial statements included elsewhere in this report for further information. See also the negative amounts included in the Carried Interest column in the table included in this Item 1 in “Asset Management—Private Equity” for further information on clawback obligations.
(15) The interest obligations on debt of our CFEs and other borrowings represent estimated interest to be paid over the term of the related debt obligation, which has been calculated assuming the debt outstanding at December 31, 2023 is not repaid until its maturity.
(15) The interest obligations on debt of our CFEs and other borrowings represent estimated interest to be paid over the term of the related debt obligation, which has been calculated assuming the debt outstanding at December 31, 2024 is not repaid until its maturity.
Future interest rates are assumed to be those in effect as of December 31, 2023, including both variable and fixed rates, as applicable, provided for by the relevant debt agreements. The amounts presented above include accrued interest on outstanding indebtedness.
Future interest rates are assumed to be those in effect as of December 31, 2024, including both variable and fixed rates, as applicable, provided for by the relevant debt agreements. The amounts presented above include accrued interest on outstanding indebtedness.
Future interest rates are assumed to be those in effect as of December 31, 2023, including both variable and fixed rates, as applicable, provided for by the relevant debt agreements. The amounts presented above include accrued interest on outstanding indebtedness.
Future interest rates are assumed to be those in effect as of December 31, 2024, including both variable and fixed rates, as applicable, provided for by the relevant debt agreements. The amounts presented above include accrued interest on outstanding indebtedness.
Management fees due from consolidated investment funds and other vehicles are eliminated upon consolidation under GAAP. However, because these amounts are funded by, and earned from, noncontrolling interests, upon consolidation under GAAP, KKR's allocated share of the net income from the consolidated investment funds and other vehicles is increased by the amount of fees that are eliminated.
However, because these amounts are funded by, and earned from, noncontrolling interests, upon consolidation under GAAP, KKR's allocated share of the net income from the consolidated investment funds and other investment vehicles is increased by the amount of fees that are eliminated.
Uncalled commitments are not reduced for investments completed using fund-level investment financing arrangements or investments we have committed to make but remain unfunded at the reporting date. 137 Table of Contents Consolidated Results of Operations (GAAP Basis) The following is a discussion of our consolidated results of operations on a GAAP basis for the years ended December 31, 2023 and 2022.
Uncalled commitments are not reduced for investments completed using fund-level investment financing arrangements or investments we have committed to make but remain unfunded at the reporting date. 138 Table of Contents Consolidated Results of Operations (GAAP Basis) The following is a discussion of our consolidated results of operations on a GAAP basis for the years ended December 31, 2024, 2023, and 2022.
(3) These interest obligations on debt represent estimated interest to be paid over the term of the related debt obligation, which has been calculated assuming the debt outstanding at December 31, 2023 is not repaid until its maturity.
(3) These interest obligations on debt represent estimated interest to be paid over the term of the related debt obligation, which has been calculated assuming the debt outstanding at December 31, 2024 is not repaid until its maturity.
Offsetting these increases in net other investment gains were (i) an increase in unrealized losses on investments accounted under a fair-value option, (ii) an increase in unrealized losses on real estate investments at fair-value under investment company accounting due to higher interest and capitalization rates during the year ended December 31, 2023 and (iii) a decrease in realized gains on investments not supporting asset-liability matching strategies. 145 Table of Contents Expenses Net policy benefits and claims Net policy benefits and claims increased for the year ended December 31, 2023 as compared to the year ended December 31, 2022 primarily due to (i) an increase in the value of embedded derivatives in Global Atlantic's indexed universal life and fixed indexed annuity products, as a result of higher equity market returns (as discussed above under "—Consolidated Results of Operations (GAAP Basis)—Revenues—Net investment-related gains (losses)," Global Atlantic purchases equity index options in order to hedge this risk, the fair value changes of which are accounted for in gains on derivative instruments, and generally offsetting the change in embedded derivative fair value reported in net policy benefits and claims), (ii) an increase in losses on market risk benefits due to market interest rates generally ending the year relatively flat after being volatile during the year ended December 31, 2023, as compared to a significant increase in market interest rates during the year ended December 31, 2022, (iii) an increase in net flows from both individual and institutional market channel sales, (iv) higher average funding costs due to higher crediting rates and the ordinary-course run-off of older business originated in a lower interest rate environment, (v) higher initial reserves assumed related to new reinsurance transactions with life contingencies in the year ended December 31, 2023 as compared to the year ended December 31, 2022, and (vi) an increase in unfavorable assumption review impacts as discussed above.
Offsetting these increases in net other investment gains were (i) an increase in unrealized losses on real assets due to higher interest and capitalization rates during the year ended December 31, 2023, and (ii) a decrease in realized gains on investments not supporting asset-liability matching strategies. 155 Table of Contents Expenses Net Policy Benefits and Claims Net policy benefits and claims increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to (i) an increase in the value of embedded derivatives in Global Atlantic's indexed universal life and fixed indexed annuity products, as a result of higher equity market returns (as discussed above under "—Consolidated Results of Operations (GAAP Basis)—Revenues—Net investment-related gains (losses)," Global Atlantic purchases equity index options in order to hedge this risk, the fair value changes of which are accounted for in gains on derivative instruments, and generally offsetting the change in embedded derivative fair value reported in net policy benefits and claims), (ii) an increase in losses on market risk benefits due to market interest rates generally ending the year relatively flat after being volatile during the year ended December 31, 2023 as compared to a significant increase in market interest rates during the year ended December 31, 2022, (iii) an increase in net flows from both individual and institutional market channel sales, (iv) higher average funding costs due to higher crediting rates and the ordinary-course run-off of older business originated in a lower interest rate environment, (v) higher initial reserves assumed related to new reinsurance transactions with life contingencies in the year ended December 31, 2023, as compared to the year ended December 31, 2022, and (vi) an increase in unfavorable assumption review impacts as discussed below.
Assumption review The assumptions on which reserves, deferred revenue and expenses are based are intended to represent an estimation of the benefits that are expected to be payable to, and fees or premiums that are expected to be collectible from, policyholders in future periods.
The assumptions on which reserves, deferred revenue and expenses are based are intended to represent an estimation of the benefits that are expected to be payable to, and fees or premiums that are expected to be collectible from, policyholders in future periods.
The most significant increases in share prices of our publicly held investments were increases in AppLovin Corporation, Kokusai Electric Corporation, and BridgeBio Pharma, Inc. These increases were partially offset by decreases in share prices of other publicly held investments, the most significant of which was ZJLD Group Inc. (HKG: 6979).
The most significant increases in share prices of our publicly held investments were increases in AppLovin Corporation, Kokusai Electric Corporation, and BridgeBio Pharma, Inc. These increases were partially offset by decreases in share prices of other publicly held investments, the most significant of which was ZJLD Group Inc.
For a more detailed discussion on the factors that affect our management fees during the period, see "—Analysis of Asset Management Segment Operating Results." Fee credits decreased compared to the prior period primarily as a result of a lower level of transaction fees in our Private Equity, Real Assets and Credit and Liquid Strategies business lines in the current period.
For a more detailed discussion on the factors that affect our management fees during the period, see "—Analysis of Asset Management Segment Operating Results." 150 Table of Contents Fee credits decreased compared to the prior period primarily as a result of a lower level of transaction fees in our Private Equity, Real Assets, and Credit and Liquid Strategies business lines in the current period.
We have access to funding under various credit facilities, other borrowing arrangements and other sources of liquidity that we have entered into with major financial institutions or which we receive from the capital markets. 196 Table of Contents For a discussion of our debt obligations, including our debt securities, revolving credit agreements and loans, see Note 16 "Debt Obligations" in our financial statements.
We have access to funding under various credit facilities, other borrowing arrangements and other sources of liquidity that we have entered into with major financial institutions or which we receive from the capital markets. For a discussion of our debt obligations, including our debt securities, revolving credit agreements and loans, see Note 16 "Debt Obligations" in our financial statements.
Equity based compensation expense is excluded from After-tax Distributable Earnings, because (i) KKR believes that the cost of equity awards granted to employees does not contribute to the earnings potentially available for distributions to its equity holders or reinvestment into its business and (ii) excluding this expense makes KKR’s reporting metric more comparable to the corresponding metric presented by other publicly traded companies in KKR’s industry, which KKR believes enhances an investor’s ability to compare KKR’s performance to these other companies.
Equity based compensation expense is excluded from ANI, because (i) KKR believes that the cost of equity awards granted to employees does not contribute to the earnings potentially available for distributions to its equity holders or reinvestment into its business and (ii) excluding this expense makes KKR’s reporting metric more comparable to the corresponding metric presented by other publicly traded companies in KKR’s industry, which KKR believes enhances an investor’s ability to compare KKR’s performance to these other companies.
For the years ended December 31, 2023 and 2022, the amount of the tax benefit from equity-based compensation included in income taxes on operating earnings was $51.3 million and $65.4 million, respectively.
For the years ended December 31, 2023 and 2022, the amount of the tax benefit from equity-based compensation included in income taxes on adjusted earnings was $51.3 million and $65.4 million, respectively.
Substantially all of the AFS fixed maturity securities portfolio, 96% and 95% as of December 31, 2023 and December 31, 2022, respectively, was invested in investment grade assets with a NAIC rating of 1 or 2.
Substantially all of the AFS fixed maturity securities portfolio, 95% and 96% as of December 31, 2024 and 2023, respectively, was invested in investment grade assets with a NAIC rating of 1 or 2.
Changes in the fair value of investments impacts the amount of carried interest that is recognized as well as the amount of investment income that is recognized for investments held directly in Asset Management and through our consolidated funds as described below.
Changes in the fair value of investments impacts the amount of carried interest that is recognized as well as the amount of investment income that is recognized for investments held directly in Asset Management, Strategic Holdings, and through our consolidated funds as described below.
Realized carried interest in our Private Equity business line for the year ended December 31, 2022 consisted primarily of realized proceeds from the sale of our investments in Internet Brands, Inc. (technology sector) and CHI Overhead Doors, Inc. (manufacturing sector) held by North America Fund XI, Fiserv, Inc. held by 2006 Fund, and performance income from our core investment vehicles.
Realized performance income in our Private Equity business line for the year ended December 31, 2022 consisted primarily of realized proceeds from the sale of our investments in Internet Brands, Inc. and CHI Overhead Doors, Inc. (manufacturing sector) held by North America Fund XI, Fiserv, Inc. held by 2006 Fund, and performance income from our core investment vehicles.
Assets Under Management Assets under management represent the assets managed, advised or sponsored by KKR from which KKR is entitled to receive management fees or performance income (currently or upon a future event), general partner capital, and assets managed, advised or sponsored by our strategic BDC partnership and the hedge fund and other managers in which KKR holds an ownership interest.
Key Operating and Capital Metrics Assets Under Management Assets under management represent the assets managed, advised or sponsored by KKR from which KKR is entitled to receive management fees or performance income (currently or upon a future event), general partner capital, and assets managed, advised or sponsored by our strategic BDC partnership and the hedge fund and other managers in which KKR holds an ownership interest.
All Level III valuations for investments in Asset Management are also subject to approval by the global valuation committee, which is comprised of senior employees including investment professionals and professionals from business operations functions, and includes KKR's Chief Financial Officer, Chief Legal Officer and General Counsel, and Chief Compliance Officer.
All Level III valuations for investments in Asset Management and Strategic Holdings are also subject to approval by the Global Valuation Committee, which is comprised of senior employees including investment professionals and professionals from business operations functions, and includes KKR's Chief Financial Officer, Chief Operating Officer, Chief Legal Officer and General Counsel, and Chief Compliance Officer.
Investment Income (Loss) - Asset Management Net Gains (Losses) from Investment Activities for the year ended December 31, 2023 The net gains from investment activities for the year ended December 31, 2023 were comprised of net realized losses of $(776.5) million and net unrealized gains of $3,801.9 million.
Investment Income (Loss) Net Gains (Losses) from Investment Activities for the year ended December 31, 2023 The net gains from investment activities for the year ended December 31, 2023 were comprised of net realized losses of $(776.5) million and net unrealized gains of $3,801.9 million.
Other Trends, Uncertainties and Risks Related to Our Business Please refer to the "Risk Factors" section of this report for important additional detail regarding risks, uncertainties and other conditions that could have a material favorable or unfavorable impact on our businesses, including the impact of market and economic conditions on valuations of investments.
Other Trends, Uncertainties and Risks Related to Our Business Please refer to the "Risk Factors" section of this Report for important additional detail regarding risks, uncertainties, and other conditions that could have a material favorable or unfavorable impact on our businesses, including the impact of market and economic conditions on valuations of investments and the impact of competition we face.
Investments and other financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows: 202 Table of Contents Level I Pricing inputs are unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date.
Investments and other financial instruments measured and reported at fair value are classified and disclosed based on the observability of inputs used in the determination of fair values, as follows: Level I Pricing inputs are unadjusted, quoted prices in active markets for identical assets or liabilities as of the measurement date.
See Note 19 "Equity Based Compensation,” in our financial statements included in this report for further discussion and activity of these awards. Investment Income (Loss) -Net Gains (Losses) from Investment Activities Net gains (losses) from investment activities consist of realized and unrealized gains and losses arising from our investment activities as well as income earned from certain equity method investments.
See Note 19 "Equity Based Compensation,” in our financial statements included in this report for further discussion and activity of these awards. 204 Table of Contents Investment Income (Loss) -Net Gains (Losses) from Investment Activities Net gains (losses) from investment activities consist of realized and unrealized gains and losses arising from our investment activities as well as income earned from certain equity method investments.
Global Atlantic reviews the adequacy of its reserves, deferred revenue and expenses and the assumptions underlying those items at least annually, usually in the third quarter. As Global Atlantic analyzes its assumptions, to the extent Global Atlantic chooses to update one or more of those assumptions, there may be an “unlocking” impact.
Global Atlantic reviews the adequacy of its reserves, deferred revenue and expenses, and the assumptions underlying those items at least annually, usually in the third quarter, referred to as an "assumption review." As Global Atlantic analyzes its assumptions, to the extent Global Atlantic chooses to update one or more of those assumptions, there may be an “unlocking” impact.
Global Atlantic calculates the embedded derivative as the present value of future projected benefits in excess of the projected guaranteed benefits, using an option budget as the indexed account value growth rate. In addition, the fair value of the embedded derivative is reduced to reflect instrument specific credit risk on Global Atlantic's obligation (i.e., Global Atlantic's own credit risk).
Global Atlantic calculates the embedded derivative as the present value of future projected benefits in excess of the projected guaranteed benefits, using an option budget as the indexed account value growth rate. In addition, the fair value of the embedded derivative is reduced to reflect instrument specific credit risk on Global Atlantic's obligation (that is, Global Atlantic's own credit risk).
In periods of significant fundraising and to the extent that we use third parties to assist in our capital raising efforts, our General, Administrative and Other are expected to increase accordingly.
In periods of increased fundraising and to the extent that we use third parties to assist in our capital raising efforts, our General, Administrative and Other are expected to increase accordingly.
Fee Related Earnings The increase in fee related earnings for the year ended December 31, 2022 compared to the prior period is primarily due to a higher level of management fees from our Private Equity, Real Assets, and Credit and Liquid Strategies business lines and a higher level of fee related performance revenues, partially offset by a lower level of transaction and monitoring fees, net, and a higher level of fee related compensation and other operating expenses, as described above.
Fee Related Earnings The increase in fee related earnings for the year ended December 31, 2023 compared to the prior period is primarily due to a higher level of management fees from our Private Equity, Real Assets, and Credit and Liquid Strategies business lines, partially offset by a lower level of transaction and monitoring fees, net, and a higher level of fee related compensation and other operating expenses, as described above.
The portion of the AFS fixed maturity securities portfolio that was considered below investment grade by NAIC designation was 4% and 5% as of December 31, 2023 and December 31, 2022, respectively.
The portion of the AFS fixed maturity securities portfolio that was considered below investment grade by NAIC designation was 5% and 4% as of December 31, 2024 and 2023, respectively.
Revenues For the years ended December 31, 2023 and 2022, revenues consisted of the following: Years Ended December 31, 2023 December 31, 2022 Change ($ in thousands) Net Premiums $ 1,975,675 $ 1,182,461 $ 793,214 Policy Fees 1,260,249 1,261,721 (1,472) Net Investment Income 5,514,902 4,118,246 1,396,656 Net Investment-Related Gains (Losses) (235,262) (1,318,490) 1,083,228 Other Income 176,442 139,124 37,318 Total Insurance Revenues $ 8,692,006 $ 5,383,062 $ 3,308,944 143 Table of Contents Net Premiums Net premiums increased for the year ended December 31, 2023 as compared to the year ended December 31, 2022 primarily due to an increase in initial premiums assumed from reinsurance transactions with life contingencies during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Consolidated Results of Operations (GAAP Basis) - Insurance Revenues For the years ended December 31, 2023 and 2022, revenues consisted of the following: Years Ended December 31, 2023 December 31, 2022 Change ($ in thousands) Net Premiums $ 1,975,675 $ 1,182,461 $ 793,214 Policy Fees 1,260,249 1,261,721 (1,472) Net Investment Income 5,514,902 4,118,246 1,396,656 Net Investment-Related Gains (Losses) (235,262) (1,318,490) 1,083,228 Other Income 176,442 139,124 37,318 Total Insurance Revenues $ 8,692,006 $ 5,383,062 $ 3,308,944 153 Table of Contents Net Premiums Net premiums increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to an increase in initial premiums assumed from reinsurance transactions with life contingencies during the year ended December 31, 2023, as compared to the year ended December 31, 2022.
There were no management fees that were retroactive to the start of the fund's investment period for the year ended December 31, 2023 for North America Fund XIII. 139 Table of Contents Management fees due from consolidated investment funds and other vehicles are eliminated upon consolidation under GAAP.
There were no management fees that were retroactive to the start of the fund's investment period for the year ended December 31, 2023 for North America Fund XIII. Management fees due from consolidated investment funds and other investment vehicles are eliminated upon consolidation under GAAP.
As of December 31, 2023, the allocation is determined based upon a fixed arrangement between Associates Holdings and us, and we do not exercise discretion on whether to make an allocation to the carry pool upon a realization event. We refer to the portion of carried interest that we allocate to the carry pool as the carry pool percentage.
The allocation is determined based upon a fixed arrangement between Associates Holdings and us, and we do not exercise discretion on whether to make an allocation to the carry pool upon a realization event. We refer to the portion of carried interest that we allocate to the carry pool as the carry pool percentage.
As of December 31, 2023 and December 31, 2022, 95% and 94% of the total fair value of corporate fixed maturity securities is rated NAIC investment grade, respectively, and 95% and 94% is rated NRSROs investment grade, respectively.
As of December 31, 2024 and 2023, 94% and 95% of the total fair value of corporate fixed maturity securities is rated NAIC investment grade, respectively, and 94% and 95% is rated NRSROs investment grade, respectively.
The non-operating adjustments made to derive Insurance Segment Operating Earnings excludes the impact of: (i) investment gains (losses) which include realized gains (losses) related to asset/liability matching investments strategies and unrealized investment gains (losses) and (ii) non-operating changes in policy liabilities and derivatives which includes (a) changes in the fair value of market risk benefits and other policy liabilities measured at fair value and related benefit payments, (b) fees attributed to guaranteed benefits, (c) derivatives used to manage the risks associated with policy liabilities, and (d) losses at contract issuance on payout annuities.
Insurance Operating Earnings excludes the impact of: (i) investment gains (losses) which include realized gains (losses) related to asset/liability matching investment strategies and unrealized investment gains (losses) and (ii) non-operating changes in policy liabilities and derivatives which includes (a) changes in the fair value of market risk benefits and other policy liabilities measured at fair value and related benefit payments, (b) fees attributed to guaranteed benefits, (c) derivatives used to manage the risks associated with policy liabilities, and (d) losses at contract issuance on payout annuities.
(4) Represents various commitments in our capital markets business in connection with the underwriting of loans, securities and other financial instruments. These commitments are shown net of amounts syndicated. (5) Represents obligations in our capital markets business to lend under various revolving credit facilities.
(4) Represents various commitments in our capital markets business in connection with the underwriting of loans, securities and other financial instruments. These commitments are shown net of amounts syndicated. 196 Table of Contents (5) Represents obligations in our capital markets business to lend under various revolving credit facilities.
Analysis of Asset Management Segment Operating Results The following tables set forth information regarding KKR's asset management segment operating results for the years ended December 31, 2023 and 2022.
Analysis of Asset Management Segment Operating Results The following tables set forth information regarding KKR's asset management segment operating results for the years ended December 31, 2024 and 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInc. before income taxes in 2023 from reductions in the following items, if not offset by other factors: December 31, 2023 Management Fees Carried Interest, Net of Carry Pool Allocation Net Gains/(Losses) From Investment Activities Including General Partner Capital Interest ($ in thousands) Hypothetical 10% Decline in Fair Value of Investments (1) $ 50,011 (2) $ 902,575 (3) $ 1,831,293 (3) (1) An immediate, hypothetical 10% decline in the fair value of investments would also impact our ability to earn incentive fees.
Biggest changeInc. before income taxes in 2024 and 2023 from reductions in the following items, if not offset by other factors: December 31, 2024 December 31, 2023 Hypothetical 10% Decline in Fair Value of Investments (1) Hypothetical 10% Decline in Fair Value of Investments (1) ($ in thousands) Management Fees $ 60,782 (2) $ 50,011 (2) Carried Interest, Net of Carry Pool Allocation $ 442,171 (3)(4) $ 902,575 (3) Net Gains/(Losses) From Investment Activities Including General Partner Capital Interest $ 1,890,459 (3) $ 1,831,293 (3) (1) An immediate, hypothetical 10% decline in the fair value of investments would also impact our ability to earn incentive fees.
(2) Excludes point in time impact. Estimated sensitivity to a hypothetical change over 12 months does not take into account any management actions that may be taken to mitigate actual impacts.
(2) Excludes point in time impact. Estimated sensitivity to a hypothetical change over 12 months does not take into account any management actions that may be taken to mitigate actual impacts.
Effect of interest rate sensitivity In the table below, Global Atlantic estimates the impact of a 50 basis point increase/(decrease) in interest rates, from a parallel shift in the yield curve, from levels as of December 31, 2023 to its net income and shareholders’ equity, excluding AOCI.
Effect of Interest Rate Sensitivity In the table below, Global Atlantic estimates the impact of a 50 basis point increase/(decrease) in interest rates, from a parallel shift in the yield curve, from levels as of December 31, 2024 and 2023 to its net income and shareholders’ equity, excluding AOCI.
These changes impact our net income over the periods following equity price moves. Effect of equity price sensitivity In the table below, Global Atlantic estimates the impact of a 10% increase/(decrease) in equity prices from levels as of December 31, 2023 to its net income and shareholders’ equity, excluding AOCI.
These changes impact our net income over the periods following equity price moves. Effect of Equity Price Sensitivity In the table below, Global Atlantic estimates the impact of a 10% increase/(decrease) in equity prices from levels as of December 31, 2024 and 2023, to its net income and shareholders’ equity, excluding AOCI.
Effect of credit spread sensitivity In the table below, Global Atlantic estimates the impact of a 50 basis points increase/(decrease) in credit spreads from levels as of December 31, 2023 to its net income and shareholders’ equity, excluding AOCI.
Effect of Credit Spread Sensitivity In the table below, Global Atlantic estimates the impact of a 50 basis points increase/(decrease) in credit spreads from levels as of December 31, 2024 and 2023, to its net income and shareholders’ equity, excluding AOCI.
Inc. resulting from a decrease of a hypothetical 100 basis points in variable interest rates used in the recognition of interest income would not be expected to be material since a substantial portion of this decrease would be attributable to noncontrolling interests and CLO third party noteholders. 218 Table of Contents Interest Expense We and certain consolidated investment vehicles, including CLOs, have debt obligations that include revolving credit agreements, certain investment financing arrangements and debt securities issued by CLO vehicles that accrue interest at variable rates.
Inc. resulting from a decrease of a hypothetical 100 basis points in variable interest rates used in the recognition of interest income would not be expected to be material since a substantial portion of this decrease would be attributable to noncontrolling interests and CLO third party noteholders. 215 Table of Contents Interest Expense We and certain consolidated investment vehicles, including CLOs, have debt obligations that include revolving credit agreements, certain investment financing arrangements, and debt securities issued by CLO vehicles that accrue interest at variable rates.
Based on investments held as of December 31, 2023, we estimate that an immediate 10% decrease in the fair value of investments generally would result in a commensurate change in the amount of net gains (losses) from investment activities (except that carried interest would likely be more significantly impacted), regardless of whether the investment was valued using observable market prices or management estimates with significant unobservable pricing inputs.
Based on investments held as of December 31, 2024, we estimate that an immediate 10% decrease in the fair value of investments generally would result in a commensurate change in the amount of net gains (losses) from investment activities (except that carried interest would likely be more significantly impacted), regardless of whether the investment was valued using observable market prices or management estimates with significant unobservable pricing inputs.
The actual impact to individual line items within the statements of operations would differ from the amounts shown below as a result of (i) the elimination of carried interest as a result of the consolidation of certain investment funds and (ii) the gross-up of net gains (losses) from investment activities, in each case as a result of the consolidation of certain investment funds and CLO vehicles. 217 Table of Contents We estimate that an immediate, hypothetical 10% decline in the exchange rates between the U.S. dollar and all of the major foreign currencies in which our investments were denominated as of December 31, 2023 (i.e., an increase in the value of the U.S. dollar against these foreign currencies) would result in declines in net income attributable to KKR & Co.
The actual impact to individual line items within the statements of operations would differ from the amounts shown below as a result of (i) the elimination of carried interest as a result of the consolidation of certain investment funds and (ii) the gross-up of net gains (losses) from investment activities, in each case as a result of the consolidation of certain investment funds and CLO vehicles. 214 Table of Contents We estimate that an immediate, hypothetical 10% decline in the exchange rates between the U.S. dollar and all of the major foreign currencies in which our investments were denominated as of December 31, 2024 and December 31, 2023 (i.e., an increase in the value of the U.S. dollar against these foreign currencies) would result in declines in net income attributable to KKR & Co.
The point-in-time estimates provided in this section assume no hedge rebalancing and, as such, the impact on Global Atlantic's consolidated net income may be different from what is shown below. 220 Table of Contents Interest rate risk Global Atlantic is exposed to interest rate risk as a result of changes in the level and volatility of interest rates.
The point-in-time estimates provided in this section assume no hedge rebalancing and, as such, the impact on Global Atlantic's consolidated net income may be different from what is shown below. 217 Table of Contents Interest Rate Risk Global Atlantic is exposed to interest rate risk as a result of changes in the level and volatility of interest rates.
In addition, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets. 219 Table of Contents Insurance Segment Market Risks The following is a discussion of the significant market risk exposures for our insurance business conducted through Global Atlantic.
In addition, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets. 216 Table of Contents Insurance Segment Market Risks The following is a discussion of the significant market risk exposures for our insurance business conducted through Global Atlantic.
The collateral is based on the par value of the investments and cash on hand. 216 Table of Contents To the extent that management fees are calculated based on the NAV of the fund's investments, the amount of fees that we may charge will increase or decrease in direct proportion to the effect of changes in the fair value of the fund's investments.
The collateral is based on the par value of the investments and cash on hand. 213 Table of Contents To the extent that management fees are calculated based on the NAV of the fund's investments, the amount of fees that we may charge will increase or decrease in direct proportion to the effect of changes in the fair value of the fund's investments.
These estimated changes include the related income tax impacts. 221 Table of Contents The impact over 12 months is driven by an increase/(decrease) in the income earned on Global Atlantic's floating rate assets, and partially offset by an increase/(decrease) in the cost of its floating-rate liabilities.
These estimated changes include the related income tax impacts. 218 Table of Contents The impact over 12 months is driven by an increase/(decrease) in the income earned on Global Atlantic's floating rate assets, and partially offset by an increase/(decrease) in the cost of its floating-rate liabilities.
These estimated changes include the impact of related amortization of deferred revenue and expenses and related income tax impacts. For a discussion of current market conditions, see "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Business Environment." 223 Table of Contents
These estimated changes include the impact of related amortization of deferred revenue and expenses and related income tax impacts. For a discussion of current market conditions, see "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Business Environment." 220 Table of Contents
December 31, 2023 Hypothetical change +50 Basis points -50 Basis points ($ in thousands) Total estimated AOCI sensitivity (point in time) $ (1,338,318) $ 1,379,943 The estimated point in time impact is primarily driven by a (i) net (decrease)/increase in the value of Global Atlantic's available-for-sale fixed maturity securities which are carried at fair value with unrealized gains and losses, (ii) the effect of changes in the discount rates used to measure traditional and limited-payment long duration insurance contracts, and (iii) the effect on additional insurance liabilities when unrealized gains and losses are included in the investment margin while calculating the present value of expected assessments for the benefit ratio; all of which are reported in AOCI.
December 31, 2024 December 31, 2023 Hypothetical Change Hypothetical Change +50 Basis Points -50 Basis Points +50 Basis Points -50 Basis Points ($ in thousands) Total Estimated AOCI Sensitivity (Point in Time) $ (1,142,278) $ 1,225,303 $ (1,338,318) $ 1,379,943 The estimated point in time impact is primarily driven by a (i) net (decrease)/increase in the value of Global Atlantic's available-for-sale fixed maturity securities which are carried at fair value with unrealized gains and losses, (ii) the effect of changes in the discount rates used to measure traditional and limited-payment long duration insurance contracts, and (iii) the effect on additional insurance liabilities when unrealized gains and losses are included in the investment margin while calculating the present value of expected assessments for the benefit ratio; all of which are reported in AOCI.
In the table below Global Atlantic estimates the impact of a 50 basis point increase/(decrease) in interest rates, for a parallel shift in the yield curve, from levels as of December 31, 2023 to Global Atlantic's AOCI.
In the table below Global Atlantic estimates the impact of a 50 basis point increase/(decrease) in interest rates, for a parallel shift in the yield curve, from levels as of December 31, 2024 and 2023, to Global Atlantic's AOCI.
Based on the fair value of investments as of December 31, 2023, we estimate that an immediate, hypothetical 10% decline in the fair value of investments would result in declines in net income attributable to KKR & Co.
Based on the fair value of investments as of December 31, 2024 and December 31, 2023, we estimate that an immediate, hypothetical 10% decline in the fair value of investments would result in declines in net income attributable to KKR & Co.
The estimated changes include the related income tax impacts. 222 Table of Contents Equity price risk Global Atlantic is exposed to equity price risk as a result of changes in the level and volatility of equity prices.
The estimated changes include the related income tax impacts. 219 Table of Contents Equity Price Risk Global Atlantic is exposed to equity price risk as a result of changes in the level and volatility of equity prices.
Changes in Fair Value The majority of our investments as of December 31, 2023, are reported at fair value. Net changes in the fair value of investments impact the net gains (losses) from investment activities in our consolidated statements of operations.
Changes in Fair Value The majority of our investments as of December 31, 2024, are reported at fair value. Net changes in the fair value of investments impact the net gains (losses) from investment activities in our consolidated statements of operations.
December 31, 2023 Hypothetical change +50 Basis points -50 Basis points ($ in thousands) Total estimated net income and shareholders’ equity excluding AOCI sensitivity (point in time) $ 181,690 $ (187,903) In the table below Global Atlantic estimates the impact of a 50 basis point increase/(decrease) in instrument-specific credit risk on market risk benefits, for a parallel shift in the yield curve, from levels as of December 31, 2023 to its AOCI.
December 31, 2024 December 31, 2023 Hypothetical Change Hypothetical Change +50 Basis Points -50 Basis Points +50 Basis Points -50 Basis Points ($ in thousands) Total Estimated Net income and Shareholders’ Equity Excluding AOCI Sensitivity (Point in Time) $ 330,302 $ (331,283) $ 181,690 $ (187,903) In the table below Global Atlantic estimates the impact of a 50 basis point increase/(decrease) in instrument-specific credit risk on market risk benefits, for a parallel shift in the yield curve, from levels as of December 31, 2024 and 2023, to its AOCI.
December 31, 2023 Hypothetical change (1) +50 Basis points -50 Basis points ($ in thousands) Total estimated net income and shareholders’ equity excluding AOCI sensitivity (point in time) $ 163,003 $ (165,739) Total estimated net income and shareholders’ equity excluding AOCI sensitivity (over 12 months) (2) 47,454 (47,454) (1) The point in time and over 12 months total estimated impacts reflect the impact of hedges within Global Atlantic's liability hedging program, as well as hedges designed to limit surplus volatility resulting from interest rate movements.
December 31, 2024 December 31, 2023 Hypothetical Change (1) Hypothetical Change (1) +50 Basis Points -50 Basis Points +50 Basis Points -50 Basis Points ($ in thousands) Total Estimated Net income and Shareholders’ Equity Excluding AOCI Sensitivity (Point in Time) $ 217,630 $ (227,213) $ 163,003 $ (165,739) Total Estimated Net Income and Shareholders’ Equity Excluding AOCI Sensitivity (Over 12 Months) (2) 28,843 (28,843) 47,454 (47,454) (1) The point in time and over 12 months total estimated impacts reflect the impact of hedges within Global Atlantic's liability hedging program, as well as hedges designed to limit surplus volatility resulting from interest rate movements.
December 31, 2023 Hypothetical change +50 Basis points -50 Basis points ($ in thousands) Total estimated AOCI sensitivity (point in time) $ 123,692 $ (137,731) The estimated point in time impact is driven primarily by the effect of changes in the fair value of a market risk benefit attributable to a change in the instrument-specific credit risk.
December 31, 2024 December 31, 2023 Hypothetical Change Hypothetical Change +50 Basis Points -50 Basis Points +50 Basis Points -50 Basis Points ($ in thousands) Total Estimated AOCI Sensitivity (Point in Time) $ 113,363 $ (125,813) $ 123,692 $ (137,731) The estimated point in time impact is driven primarily by the effect of changes in the fair value of a market risk benefit attributable to a change in the instrument-specific credit risk.
December 31, 2023 Hypothetical change (1) +10% Equity Prices -10% Equity Prices ($ in thousands) Total estimated net income and shareholders’ equity excluding AOCI sensitivity (point in time) $ (14.861) $ 10,129 Total estimated net income and shareholders’ equity excluding AOCI sensitivity (over 12 months) (2) $ 4,660 $ (5.161) (1) From time to time, Global Atlantic may choose to enter into additional hedges to mitigate economic exposure to equity markets.
December 31, 2024 December 31, 2023 Hypothetical Change (1) Hypothetical Change (1) +10% Equity Prices -10% Equity Prices +10% Equity Prices -10% Equity Prices ($ in thousands) Total Estimated Net income and Shareholders’ Equity Excluding AOCI Sensitivity (Point in Time) $ (3,646) $ (672) $ (14,861) $ 10,129 Total Estimated Net Income and Shareholders’ Equity Excluding AOCI Sensitivity (Over 12 Months) (2) $ 4,232 $ (4,716) $ 4,660 $ (5.161) (1) From time to time, Global Atlantic may choose to enter into additional hedges to mitigate economic exposure to equity markets.
The estimated point in time impact is driven by a net decrease/(increase) in the value of (i) the embedded derivatives associated with Global Atlantic's modified coinsurance and coinsurance with funds withheld payables and receivables, (ii) the embedded derivatives associated with its fixed-indexed annuity, interest sensitive life products, and variable annuities accounted for under the fair value option, (iii) market risk benefits, and (iv) the remeasurement gain/loss of the liability for future policy benefits.
The estimated point in time impact is driven by a net decrease/(increase) in the value of (i) the embedded derivatives associated with Global Atlantic's modified coinsurance and coinsurance with funds withheld payables and receivables, (ii) the embedded derivatives associated with its fixed-indexed annuity, interest sensitive life products, and variable annuities accounted for under the fair value option, and (iii) market risk benefits.
The proportion of our management fees that are based on NAV depends on the number and type of funds in existence. For the year ended December 31, 2023, the fund management fees that were recognized based on the NAV of the applicable funds was approximately 17%.
The proportion of our management fees that are based on NAV depends on the number and type of funds in existence. For the years ended December 31, 2024 and 2023, the fund management fees that were recognized based on the NAV of the applicable funds was approximately 18% and 17%, respectively.
The impact on net income attributable to KKR & Co. Inc. resulting from an increase of a hypothetical 100 basis points in variable interest rates used in the recognition of interest expense, net of the impact of interest rate hedging strategies, would not be expected to be material.
Inc. resulting from an increase of a hypothetical 100 basis points in variable interest rates used in the recognition of interest expense, net of the impact of interest rate hedging strategies, would not be expected to be material.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our exposure to market risks primarily relates to movements in the fair value of investments, including the effect that those movements have on our management fees, carried interest, and net gains from investment activities.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our exposure to market risks in our asset management and strategic holdings segments primarily relates to movements in one or more of the fair value of investments, including the effect that those movements have on our management fees, carried interest, and net gains from investment activities.
KKR has a global conflicts and compliance committee comprised of senior employees from across our asset management business and operations, and it includes, among others, our Chief Financial Officer, Chief Legal Officer and General Counsel, and Chief Compliance Officer.
KKR’s Global Conflicts and Compliance Committee is comprised of senior employees from across our asset management business and operations, and it includes, among others, our Chief Financial Officer, Chief Legal Officer and General Counsel, and Chief Compliance Officer.
There is additional instrument-specific credit spread risk exposure inherent in Global Atlantic's credit spread used in valuing embedded derivative liabilities, which serves to mitigate net credit exposure. Global Atlantic may choose to enter into hedge positions to manage credit spread risk. As of December 31, 2023, Global Atlantic had a $600 thousand credit derivative position.
There is additional instrument-specific credit spread risk exposure inherent in Global Atlantic's credit spread used in valuing embedded derivative liabilities, which serves to mitigate net credit exposure. Global Atlantic may choose to enter into hedge positions to manage credit spread risk.
Our Board of Directors has five standing committees: an Audit Committee, a Risk Committee, a Conflicts Committee, a Nominating and Corporate Governance Committee and an Executive Committee. For further information about KKR & Co. Inc.'s Board of Directors or its committees, see “Part III—Item 10.
Our Board of Directors has five standing committees: an Audit Committee, a Risk Committee, a Conflicts Committee, a Nominating and Corporate Governance Committee, and an Executive Committee, and they are aided by various management-level committees designed to manage enterprise risks. For further information about KKR & Co. Inc.'s Board of Directors or its committees, see “Part III—Item 10.
With respect to the funds and other investment vehicles through which we make investments for our fund investors, KKR manages risk by subjecting transactions to the review and approval of an applicable investment committee or portfolio manager; a portfolio management committee (or other designated senior employees) then regularly monitors these investments.
Aggregate balance sheet risk and capital deployed for transactions are monitored on an ongoing basis by the Balance Sheet Committee referenced above. 211 Table of Contents With respect to the funds and other investment vehicles through which we make investments for our fund investors, KKR manages risk by subjecting transactions to the review and approval of an applicable investment committee or portfolio manager; a portfolio management committee (or other designated senior employees) then regularly monitors these investments.
With respect to debt obligations held by KKR and not in the consolidated investment vehicles or CLOs, as of December 31, 2023, KKR had debt obligations outstanding with an aggregate principal amount of approximately $258.5 million that accrues interest at a variable rate. Our policy is to reduce these risks by employing hedging techniques, including using interest rate swaps.
With respect to debt obligations held by KKR and not in the consolidated investment vehicles or CLOs, as of both December 31, 2024 and 2023, KKR had debt obligations outstanding with an aggregate principal amount of approximately $258.5 million that accrues interest at a variable rate.
With respect to carried interest, for purposes of this analysis the impact of preferred returns are ignored. Interest Rate Risk Valuation of Investments Changes in credit markets and in particular, interest rates, can impact investment valuations, particularly our Level III investments, and may have offsetting results depending on the valuation methodology used.
Interest Rate Risk Valuation of Investments Changes in credit markets and in particular, interest rates, can impact investment valuations, particularly our Level III investments, and may have offsetting results depending on the valuation methodology used.
For a discussion of Global Atlantic's hedge program, see "—Insurance Segment Market Risks—Hedge Program." Management of General Business Risk Asset Management KKR has a risk and operations committee comprised of senior employees from across our asset management business and operating functions, and it includes our Chief Financial Officer, Chief Operating Officer, Chief Legal Officer and General Counsel, Chief Compliance Officer, and other senior employees from KKR's asset management business and Global Atlantic.
Management of General Business Risk KKR has a Risk and Operations Committee comprised of senior employees from across our asset management and insurance businesses and operating functions, and it includes our Chief Financial Officer, Chief Operating Officer, Chief Legal Officer and General Counsel, Chief Compliance Officer, and other senior employees.
The risk and operations committee focuses on KKR's operations and enterprise risk management. This committee is aided by various other committees focused on the oversight of risks to our business, including a global conflicts and compliance committee. This committee focuses on the most significant operating and business risks, which includes, among others, regulatory, cyber, operational, geopolitical, and reputational risks.
The Risk and Operations Committee provides oversight and management of KKR’s significant operating and business risks. This committee is aided by various other committees focused on the oversight of risks to our business, including a Global Conflicts and Compliance Committee.
The fair value of investments may fluctuate in response to changes in the values of investments, foreign currency exchange rates, and interest rates. Additionally, interest rate movements can adversely impact the amount of interest income we receive on credit instruments bearing variable rates and could also impact the amount of interest that we pay on debt obligations bearing variable rates.
Additionally, interest rate movements can adversely impact the amount of interest income we receive on credit instruments bearing variable rates and could also impact the amount of interest that we pay on debt obligations bearing variable rates.
Dollar (1) $ 188,785 (2) $ 379,599 (2) (1) An immediate, hypothetical 10% decline in exchange rates between the U.S. dollar and all of the major foreign currencies in which our investments were denominated would not be expected to materially impact our management fees or incentive fees.
Dollar (1) ($ in thousands) Carried Interest, Net of Carry Pool Allocation $ 96,897 (2)(3) $ 188,785 (2) Net Gains/(Losses) From Investment Activities Including General Partner Capital Interest $ 241,074 (2) $ 379,599 (2) (1) An immediate, hypothetical 10% decline in exchange rates between the U.S. dollar and all of the major foreign currencies in which our investments were denominated would not be expected to materially impact our management fees or incentive fees.
The actual impact of a hypothetical adverse movement in these risks could be materially different from the amounts shown below. The Board of Directors is responsible for oversight and the overall governance of KKR.
The quantitative information provided in this section was prepared using estimates and assumptions that management believes are appropriate. The actual impact of a hypothetical adverse movement in these risks could be materially different from the amounts shown below. The Board of Directors is responsible for oversight and the overall governance of KKR.
Regulatory capital requirements also place limits on the size of securities underwritings the capital markets business can conduct based on quantitative measure of assets, liabilities, and certain off-balance-sheet items. Aggregate balance sheet risk and capital deployed for transactions are monitored on an ongoing basis by the balance sheet committee referenced above.
Regulatory capital requirements also place limits on the size of securities underwritings the capital markets business can conduct based on quantitative measure of assets, liabilities, and certain off-balance-sheet items.
Global Atlantic has material exposure to market volatility in interest rates, credit spreads, and equity prices through its insurance liabilities, many of which are structured to have exposure to market level changes, its investment portfolio and its hedge program. The quantitative information provided in this section was prepared using estimates and assumptions that management believes are appropriate.
KKR, and Global Atlantic in particular, has material exposure to market volatility in interest rates, credit spreads, and equity prices through its insurance liabilities, many of which are structured to have exposure to market level changes, its investment portfolio, and its hedge program.
Inc. before income taxes in 2023 from reductions in the following items, net of the impact of foreign exchange hedging strategies, if not offset by other factors: December 31, 2023 Carried Interest, Net of Carry Pool Allocation Net Gains/(Losses) From Investment Activities Including General Partner Capital Interest ($ in thousands) Hypothetical 10% Decline in Foreign Currencies Against the U.S.
Inc. before income taxes in 2024 and 2023 from reductions in the following items, net of the impact of foreign exchange hedging strategies, if not offset by other factors: December 31, 2024 December 31, 2023 Hypothetical 10% Decline in Foreign Currencies Against the U.S. Dollar (1) Hypothetical 10% Decline in Foreign Currencies Against the U.S.
Directors, Executive Officers and Corporate Governance—Board Committees.” Management of Market Risk Asset Management When we commit capital from our Principal Activities business line to investments or transactions, a balance sheet committee of senior employees, including our Co-Executive Chairmen, one of our Co-Chief Executive Officers, and the Chief Financial Officer, must approve the investment or transaction before it may be made.
When we allocate capital to our businesses or investments, a Balance Sheet Committee of senior employees, including our Co-Executive Chairmen, one of our Co-Chief Executive Officers, and the Chief Financial Officer, must approve the investment or transaction before it may be made.
An investment team presents the investment and its identified risks to an investment committee or a portfolio manager, which must approve each investment before it may be made.
An investment team presents the investment and its identified risks to an investment committee or a portfolio manager, which must approve each investment before it may be made. If an investment is made, a portfolio management committee (or other designated senior employees) is responsible for working with our investment professionals to monitor the investment on an ongoing basis.
(3) Decrease would impact our statement of operations in a single quarter. With respect to carried interest, for purposes of this analysis the impact of preferred returns are ignored.
(3) Decrease would impact our statement of operations in a single quarter. With respect to carried interest, for purposes of this analysis the impact of preferred returns are ignored. (4) Effective January 2, 2024, KKR is authorized to apply a carry pool percentage in excess of the fixed percentages of up to 80% for all funds.
For further information about this committee’s role with respect to oversight of cybersecurity risks, see "Item 1C-Cybersecurity." In addition, KKR has other committees comprised of senior employees across our asset management business and operations that consider potential risks to our business.
In addition, KKR has other committees comprised of senior employees from across our business and operations that consider potential risks to our business. Management of Insurance Business The oversight and governance of our insurance business is aided by a board of directors at TGAFG, which is the holding company for Global Atlantic.
The risk appetite principles include: (1) protect policyholders by seeking to maintain adequate capital and liquidity resources to honor its obligations to policyholders under situations reflecting stress scenarios calibrated to the worst modern economic cycles; (2) deliver value by remaining in a position of strength during periods of adverse market conditions, and (3) protect the franchise by identifying and cost-effectively managing risks that could adversely and materially impact franchise value.
The TGAFG Risk Committee has adopted risk appetite principles as part of its enterprise risk management program, including endeavoring to protect policyholders by seeking to maintain adequate capital and liquidity resources to honor our obligations to policyholders under situations reflecting stress scenarios calibrated to the worst modern economic cycles.
Insurance The TGAFG board of directors is responsible for oversight and the overall governance of Global Atlantic's business and operations. The TGAFG board includes among its members one of our Co-Chief Executive Officers.
The TGAFG board includes among its members one of our Co-Chief Executive Officers and our Chief Financial Officer. To assist with its oversight of Global Atlantic, the TGAFG board of directors has established various committees, including audit, risk, and special transaction review.
To assist with its oversight of Global Atlantic, the TGAFG board of directors has established an audit, risk, investment, operations & technology, nominating & governance, compensation and special transaction review committee. 215 Table of Contents Asset Management Segment Market Risks The following is a discussion of the significant market risk exposures for KKR's asset management business.
For a discussion of Global Atlantic's hedge program, see "—Insurance Segment Market Risks—Hedge Program" below. 212 Table of Contents Asset Management and Strategic Holdings Segment Market Risks The following is a discussion of the significant market risk exposures for KKR's asset management businesses.
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If an investment is made, a portfolio management committee (or other designated senior employees) is responsible for working with our investment professionals to monitor the investment on an ongoing basis. 214 Table of Contents Insurance The board of directors of TGAFG, which is the holding company for Global Atlantic, has established a risk committee that has primary oversight of market risk at Global Atlantic.
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Our exposure to market risks in our insurance segment primarily relates to the impact of movements in such market risks on our insurance segment’s assets, liabilities, and hedge program, as discussed below under “Insurance Segment Market Risks." The fair value of investments may fluctuate in response to changes in the values of investments, foreign currency exchange rates, and interest rates.
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This risk committee has adopted Global Atlantic’s risk appetite principles that form the foundation of Global Atlantic’s enterprise risk management program.
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Directors, Executive Officers, and Corporate Governance—Board Committees.” Management of Enterprise Risk Through enterprise risk management, we manage market risk and general business risks. Risk categories we monitor include financial, insurance, tax, investment, hedge management, operational, cybersecurity, geopolitical, reputational, legal, compliance, and regulatory risks, each within established risk limits and tolerances for our balance sheet, investment vehicles, and investments.
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The Global Atlantic enterprise risk management program formalizes the review of financial and non-financial risks and establishes risk management controls.
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Management of Market Risk KKR has a firmwide Market Risk Management Committee that seeks to oversee market risk management across KKR. Its membership includes both Co-Chief Executive Officers, the Chief Financial Officer, and other members of senior management. The committee reviews and assesses market risk exposures, including those related to liquidity and capital and across our segments and business lines.
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Global Atlantic monitors risks on an aggregate, legal entity and product basis, monitoring different factors, including financial and insurance, investment, hedge management, operational, and legal, compliance and regulatory risks to confirm that its risks remain within established risk limits and tolerances.
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KKR also has a Derivatives & Liability Management Committee that is responsible for monitoring and managing KKR’s liabilities and market exposures. Its membership includes one of our Co-Chief Executive Officers, the Chief Financial Officer, and other members of senior management.
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KKR's technology and information security committee is responsible for reviewing and monitoring global technology risks including information security, business disruption and fraud related risks.
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We also manage market risks that relate to our insurance business through a board of directors and management team specifically focused on Global Atlantic. For more information, see "Management of Insurance Business" below.
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Management fees in our infrastructure funds are calculated based on the NAV of the fund and, in some cases, we additionally earn management fees on the fund's remaining commitment.
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Global Atlantic's management-level committees also evaluate and oversee certain risks affecting our insurance business, including Global Atlantic’s Financial Risk Committee, Firmwide Executive Review Committee and Management Committee, each of which consists of senior employees from across our insurance and asset management businesses.
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Please see "— Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Asset Management and Strategic Holdings" for further discussion related to the changes in our carry pool.
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With respect to carried interest, for purposes of this analysis the impact of preferred returns are ignored. (3) Effective January 2, 2024, KKR is authorized to apply a carry pool percentage in excess of the fixed percentages of up to 80% for all funds. Please see " — Item 7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Asset Management and Strategic Holdings" for further discussion related to the changes in our carry pool.
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Our policy is to reduce these risks by employing hedging techniques, including using interest rate swaps. The impact on net income attributable to KKR & Co.
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As of December 31, 2024 and 2023, Global Atlantic had a $194 thousand and $600 thousand credit derivative position, respectively.

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