KKR Posts Q2 Earnings Beat, Raises $28 Billion in New Capital, and Shifts Focus to Fee-Based Businesses.

KKR & Co. reported Q2 earnings that beat expectations, driven by a 17% jump in fee-related earnings to $887 million. Adjusted net income hit $1.1 billion, or $1.18 per share. The firm raised $28 billion in new capital and pushed AUM to $686 billion, up 14% YoY. KKR is steering towards its $1 trillion AUM target by 2029 and is pivoting towards fee-based businesses to build predictable, recurring income.

KKR & Co. Inc. (KKR) reported its second-quarter 2025 earnings, which surpassed analyst expectations, driven by a robust increase in fee-related earnings. The company's adjusted net income per share of $1.18 exceeded the Zacks Consensus Estimate of $1.17, marking a 17% year-over-year (YoY) increase in fee-related earnings to $887 million [1].

The company's total assets under management (AUM) grew to $686 billion, representing a 14% YoY increase. This growth was supported by $28 billion in fresh capital raised, highlighting KKR's strong fundraising capabilities. The company's segmental revenues totaled $1.28 billion, up 15.9% YoY, driven by higher management fees, fee-related performance revenues, and transaction and monitoring fees [1].

Despite the strong earnings, KKR's total segment expenses increased by 12.8% to $396.9 million, acting as a headwind to the company's bottom line. The company's net income attributable to the company (GAAP basis) was $472.4 million, compared to $667.9 million in the year-ago quarter [1].

KKR's strategic initiatives, such as a Texas data center joint venture, investments in Harley-Davidson's financing arm, and a healthcare royalties expansion, are signaling a shift towards fee-based revenue streams for long-term stability. The firm's investment activity remained active, deploying $18 billion in the quarter, with $9 billion allocated to credit markets [2].

Global Atlantic, KKR's insurance subsidiary, contributed $277.9 million in profit, reflecting a 9.8% YoY increase. The unit's projected quarterly earnings of $250 million highlight its role in sustaining cash flow as older annuities transition to long-term products. A $2 billion commitment from Japan Post Insurance further bolsters Global Atlantic's capital base [2].

KKR's private equity sub-segment reached $215 billion in AUM, a 16% YoY increase, and the Real Assets sub-segment grew to $179 billion, an 18% YoY increase. The Credit and Liquid Strategies subsegment expanded to $292 billion, a 10% YoY increase [3].

KKR is steering towards its $1 trillion AUM target by 2029 and is pivoting towards fee-based businesses to build predictable, recurring income. The company will continue utilizing lucrative investment opportunities on the back of its efficient fundraising capability in the quarters ahead [1].

References:
[1] https://www.nasdaq.com/articles/kkr-q2-earnings-surpass-estimates-aum-rises-y-y-stock-gains
[2] https://www.ainvest.com/news/kkr-0-75-billion-share-surge-ranks-177th-shares-drop-2-56-strong-q2-earnings-2508/
[3] https://www.alternativeswatch.com/2025/07/31/kkr-boosts-aum-to-686bn-sees-broad-based-growth-across-segments/