KKR: USI deal to moderate segment’s near-to-medium term earnings

KKKR's recent $1 billion equity investment in USI Insurance Services is expected to moderate the firm's near-to-medium term earnings in the financial services segment. The investment, made through KKR's core investments strategy, reflects the firm's continued commitment to supporting USI's long-term growth initiatives and technological advancements and expansion. USI, which was originally acquired in 2017 by KKR and CDPQ for $4.3 billion, has since expanded significantly, with its team growing to over 10,000 employees across more than 200 offices. The additional capital injection is intended to further strengthen USI's market position in risk management, employee benefits, and retirement consulting. While the investment is expected to be completed by the end of 2023, the transaction's financial terms were not disclosed. KKR and CDPQ have previously expressed confidence in USI's strategic direction and long-term value creation potential, with both firms emphasizing their collaborative approach to supporting the company's management team. Analysts suggest that while the investment may temporarily affect KKR's earnings per share, it aligns with the firm's broader strategy of long-term value creation through strategic capital deployment.