KKR & Co (KKR), mcap=$47bn, price $55.3 vs $55.8

Pitch: Alternative asset manager with a strong track record in both (1) fundraising/business building and (2) investment returns. KKR value is based on fee-related earnings (and in turn AUM) which is non-cyclical and has grown at high rates. AUM compounded 22% from 2004-2020 with fee-related earnings expected to continue growing at high teens. Cheap on adjusted fee-related earnings multiple relative to peers, having underperformed BX and others by a significant margin.

Valuation: Trades at 15x 2023 fee-related earnings of $2.15 after backing out the $23.75/share in balance sheet assets ($13.25), Insurance assets ($6.50) and embedded carry ($4.00).

Full KKR write-up (free guest account required):

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