Fiddich Review Centre
Alternative Investment

Should You Invest in KKR & Co. (KKR) Now?

Oakmark Funds, an investment management company, released its “Oakmark Select Fund” third quarter 2022 investor letter. A copy of the same can be downloaded here. The fund declined 5.9% in the third quarter, roughly in line with the S&P 500 Index. For the fiscal year ended September 30, 2022, the fund fell 23.6% compared to a 15.5% decline for the S&P 500 Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Oakmark Funds discussed stocks like KKR & Co. Inc. (NYSE:KKR) in the Q3 2022 investor letter. Based in New York, New York, KKR & Co. Inc. (NYSE:KKR) is an asset management company. On October 11, 2022, KKR & Co. Inc. (NYSE:KKR) stock closed at $44.14 per share. One-month return of KKR & Co. Inc. (NYSE:KKR) was -11.72% and its shares lost 32.39% of their value over the last 52 weeks. KKR & Co. Inc. (NYSE:KKR) has a market capitalization of $49.482 billion.

Here is what Oakmark Funds specifically said about KKR & Co. Inc. (NYSE:KKR)  in its Q3 2022 investor letter:

KKR & Co. Inc. (NYSE:KKR) is one of the largest alternative asset managers in the world, managing $491 billion in assets across various investment vehicles. Approximately 80% of the company’s assets under management (AUM) are held under capital commitments of eight years or longer. This creates a highly stable management fee stream that has grown for 20 consecutive years. KKR’s AUM has been growing at double-digit rates as the company has drawn on its established brand and relationships to expand into new strategies and geographies. Over the past decade, KKR has expanded from 6 to 28 strategies, and we believe many of these have considerable runway for future growth. Furthermore, we think the market is undervaluing the company due to its large balance sheet investments and the volatility of its performance fees. We estimate that KKR’s investments are worth ~$17/share today or 38% of its current market capitalization, which is considerably higher than its peers. After adjusting for these factors, the company’s shares trade at a high-single-digit multiple of our forward earnings estimate. In fact, KKR trades at just 14.5x our estimate of its fee earnings – before ascribing any value to carried interest earnings or the company’s insurance unit. We find this valuation too cheap for a business with KKR’s growth outlook and return profile.”

KKR & Co. Inc. (NYSE:KKR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held KKR & Co. Inc. (NYSE:KKR) at the end of the second quarter, which was 54 in the previous quarter.

We discussed KKR & Co. Inc. (NYSE:KKR) in another article and shared RiverPark Funds’ views on the company. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.


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Disclosure: None. This article is originally published at Insider Monkey.

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