KKR Kohlberg Kravis Roberts 10-Q 2026-09-30 section summaries

KKR & Co. Inc. — Q3 and nine months ended September 30, 2026

KKR’s results reflect stronger fee-related and segment earnings year to date, but materially weaker investment gains than in 2025. Insurance investment income grew, while market movements, credit developments, and large insurance obligations remain important sources of volatility and risk.

Consolidated results

Q3 revenue fell 17.4%, principally reflecting lower insurance premiums and investment-related results. Nine-month revenue grew 6.4%. Common-stockholder income and diluted EPS increased despite lower consolidated net income, partly because less income was attributable to noncontrolling interests.

Asset Management and Strategic Holdings fees and other revenue rose to $1.186B in Q3 from $1.105B, and to $3.553B in 9M from $2.916B. Growth reflected higher management fees and lower fee credits, partly offset by lower transaction fees and carried interest. Capital allocation-based income declined to $575.9M in Q3 from $638.8M and to $2.440B in 9M from $2.709B.

Insurance net investment income increased to $2.074B in Q3 from $1.970B and to $6.102B in 9M from $5.616B. Net premiums declined to $651.2M from $1.060B in Q3 and to $1.910B from $2.113B in 9M. Insurance net investment-related results shifted to a $323.5M loss in Q3 from a $351.8M gain; the 9M loss narrowed to $597.6M from $845.4M. Derivative gains partly offset substantial fixed-maturity valuation losses.

Segment performance

Total segment earnings increased 22.7% in Q3 and 25.1% in 9M. Segment results differ from GAAP: income before tax was $1.510B in Q3 versus $2.200B, and $3.347B in 9M versus $4.499B. Reconciliation reflects consolidation and other adjustments, interest, investment marks, insurance items, and compensation. Segment expenses were $2.730B in Q3 versus $2.661B, and $8.242B in 9M versus $7.042B.

Balance sheet, cash flow and capital

Insurance investments were $186.440B and policy liabilities $206.388B. Total equity declined, with accumulated other comprehensive loss widening to $6.696B from $4.576B, including Q3 unrealized losses on available-for-sale securities and other of $2.599B, partly offset by a $883.5M benefit from policy-liability discount-rate and credit-risk changes.

Cash interest paid increased to $2.254B from $1.942B. KKR repurchased 4.107M shares in 9M 2026. Equity-based compensation expense was $658.4M versus $542.5M; unrecognized service-vesting award expense was $1.0B, and market-condition award expense was $1.3B.

Investment, credit and valuation exposures

Asset Management and Strategic Holdings investment-activity results swung to a $229.4M Q3 loss from $1.198B of gains; 9M gains declined to $251.5M from $3.032B. Fair-value-measured assets totaled $252.680B, including $123.860B of Level III assets relying on significant unobservable inputs. Level III assets recorded $992.3M of realized and unrealized losses in 9M, versus $4.028B of gains in 2025.

Available-for-sale securities in unrealized-loss positions had $67.698B fair value and $9.650B gross losses, up from $36.133B and $6.751B at year-end. Global Atlantic attributed depressed values primarily to higher interest rates; it did not expect to be required to sell the securities before recovery. Mortgage and other loan receivables were $45.215B gross, with a $713.8M allowance. Loans at least 90 days past due or in foreclosure rose to $695.6M from $318.4M; commercial mortgage balances in that status increased to $440.8M from $45.0M. The 9M provision for mortgage and other loan credit losses rose to $280.3M from $80.3M.

Financing, commitments and significant developments

Asset Management and Strategic Holdings debt was $49.954B principal and $49.307B carrying value. Global Atlantic debt was $4.030B principal and $3.728B carrying value. KKR replaced its corporate facility with a $3.0B unsecured revolving facility maturing in 2031; covenants include maximum leverage of 4.0x covenant EBITDA and at least $195B fee-paying AUM. Global Atlantic’s $3.0B revolving facility had no borrowings at quarter-end.

KKR reported $10.8B of unfunded commitments to investment funds and vehicles and $1.3B of capital-markets commitments. Approximately $196M of carried interest was subject to clawback at current fair values; a remote zero-value liquidation scenario would imply approximately $5.4B of clawbacks.

KKR completed its Arctos acquisition on May 4. Accounting consideration was $560M, with provisional allocation including $331M of identifiable intangibles and $162M of goodwill; Arctos’s post-acquisition results were immaterial. A proposed DOJ resolution of an HSR complaint involved a $250M civil penalty, subject to court approval, with reimbursement by outside law firms. A separate European Commission investigation concerning FiberCop remained contested. KKR said pending litigation was not expected to materially adversely affect the financial statements, while noting adverse outcomes could affect future results. On November 9, KKR declared a $0.195-per-share common dividend and a $0.78125-per-share Series D preferred dividend.

KKR — Q3 and nine months ended September 30, 2026

KKR managed $804.388B of AUM at quarter-end, including $223B at Global Atlantic, and operated through Asset Management, Insurance and Strategic Holdings. Its business has diversified considerably: traditional private equity fell from more than 70% of AUM in 2010 to less than 25% in 2026. Credit and Liquid Strategies, Real Assets and Private Equity represented approximately $337B, $212B and $256B, respectively. Global Atlantic serves approximately 4 million policyholders; Strategic Holdings held stakes in 19 companies.

Consolidated results

Although consolidated net income declined, income attributable to common stockholders increased because income attributable to noncontrolling interests fell sharply—from $905.4M to $72.2M in Q3 and from $2.544B to $318.6M for 9M. Preferred dividends were $40.430M in Q3 2026 and $121.289M for 9M 2026.

The financing swing reflected lower net contributions from noncontrolling interests, insurance contractholder deposits net of withdrawals of $(2.4)B versus $7.6B, and the absence of the prior-year $2.5B Series D preferred issuance. Cash-flow totals include consolidated funds, CLOs and Global Atlantic vehicles and can reflect substantial third-party flows.

Business results

Asset Management and Strategic Holdings revenue was supported by higher management fees and lower fee credits, partly offset by lower transaction fees and carried interest. Management-fee growth reflected new capital, appreciation in private equity and infrastructure K-Series vehicles, and Arctos funds acquired in Q2. Asset Management Fee Related Earnings rose to $1.316B from $1.033B; realized performance income declined to $602.3M from $930.7M, while realized investment income increased to $150.2M from $4.4M, primarily on the sale of BridgeBio Pharma shares. KKR reclassified K-Series Private Equity performance revenues beginning in Q2 2026; the change did not affect total segment earnings or GAAP net income.

Asset Management investment results included $229.4M of net losses in Q3 versus $1.198B of gains a year earlier, including a $230M impairment of an equity-method partnership. Strategic Holdings earnings benefited from dividends, including from 1-800 Contacts, April SA and USI Insurance Services, and a realized gain on Atlantic Aviation.

Insurance revenue declined as premiums fell and investment-related results swung to a loss, partly offset by higher net investment income. Segment net investment income rose to $1.947B from $1.835B, but higher insurance costs—including reserve growth, funding costs and unfavorable assumption-review items—reduced operating earnings. For 9M, Insurance Operating Earnings were $778.8M versus $841.4M: net investment income increased to $5.801B from $5.353B, more than offset by net cost of insurance rising to $4.474B from $3.968B. The 9M reserve assumption review was $23M unfavorable, compared with a $63.9M favorable impact in 2025.

Insurance investment-related volatility was substantial: Q3 trading fixed-maturity securities had $1.213B of unrealized losses, and credit-loss allowances increased by $106.8M. Derivative gains, including gains on funds-withheld embedded derivatives, partly offset other investment losses; hedges and policy liabilities can move in opposite directions. For 9M, net investment-related losses improved to $(597.6)M from $(845.4)M, despite $(2.529)B of net other investment losses, including trading-security and credit-loss allowance impacts.

AUM and activity

Quarter-end AUM growth reflected fundraising and Global Atlantic inflows, partly offset by distributions, redemptions and policyholder payments. For 9M, capital invested was $66.063B versus $62.775B: Private Equity $10.7B versus $15.2B, Real Assets $24.0B versus $19.2B, and Credit and Liquid Strategies $31.4B versus $28.4B. KKR cautions that investment timing makes deployment volatile.

Global Atlantic new-business volumes increased in the institutional channel, while individual retirement volumes also grew:

Earnings measures, capital and risks

GAAP common stockholders’ equity was $27.715B; non-GAAP book value was $35.512B. Conversion of all Series D mandatory convertible preferred stock would increase book value by $2.5B and common shares outstanding by 21.4M. KKR declared a $0.195-per-share common dividend and targets $0.78 annually, subject to board discretion and other constraints. Since 2015 it repurchased or retired equity representing 104.1 million shares for $3.7B; approximately $33M remained under the program as of November 4, 2026.

Global Atlantic’s insurance portfolio was $194.899B on an unconsolidated basis, down from $200.360B at year-end 2025; fixed maturities were predominantly investment grade. Insurance liabilities remain sensitive to interest rates, markets, credit spreads and policyholder behavior. KKR also faces uncertainty in Level III valuations, which can materially affect investment income and carried interest; independent valuation firms covered all but less than 5% of Level III investments by aggregate value. Economic growth and markets were mixed, while higher rates, inflation, geopolitical uncertainty and subdued activity may affect financing, valuations, fundraising and realizations.

For the three months ended September 30, 2026, KKR reported no material changes in its market risks. The filing refers investors to its 2025 Form 10-K for a general discussion of market risks and to “Business Environment” in MD&A for current risks, uncertainties, and market and economic conditions.

Disclosure Controls and Internal Control

KKR’s Co-Chief Executive Officers and Chief Financial Officer concluded that disclosure controls and procedures were effective at the reasonable-assurance level as of September 30, 2026. During the three months ended September 30, 2026, no changes in internal control over financial reporting materially affected, or were reasonably likely to materially affect, those controls. The filing reports no control-related issues or material changes for the period.

KKR reported no material changes to the risk factors described in its Annual Report, except for matters discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Environment.” This section provides no further risk details.