KKR has cautioned that heightened market volatility is likely to constrain its earnings growth outlook for 2026, even as the firm reported first-quarter results that exceeded expectations on strong fee income and asset monetisation activity, according to a report by Reuters.
The private equity and alternative asset manager posted higher-than-expected earnings, supported by a rise in deal exits and a more than 30% increase in management fees, which provide a stable revenue base regardless of investment performance. The firm also raised $28bn in new capital during the quarter, with credit strategies continuing to drive inflows across its $758 billion asset base.
However, management struck a more cautious tone on forward guidance. The company indicated that per-share income is now more likely to come in below its previously projected $7 level, citing reduced visibility amid macroeconomic and geopolitical uncertainty.
Executives pointed to a more challenging backdrop for asset sales, with ongoing volatility, energy market uncertainty and geopolitical tensions influencing timing decisions for exits. This has added complexity to monetisation plans across private equity portfolios.
Performance across investment strategies was mixed. While asset realisations contributed positively, underlying fund returns were more subdued, with private equity gains slowing and credit strategies experiencing negative quarterly performance compared with stronger results over the past year.
Despite this, the firm’s recurring fee-related earnings continued to grow, reinforcing the importance of permanent capital and asset management income in smoothing cyclical swings in investment performance.
KKR’s share price has experienced pressure over the past year alongside broader alternative asset managers, as investors weigh concerns including interest rate sensitivity, private credit underwriting risk, and potential disruption from artificial intelligence across portfolio companies.
Even so, management expressed confidence in long-term value creation and highlighted internal share purchases by senior leadership, framing recent weakness as a potential entry point amid longer-term growth expectations for alternative asset management.
