KKR & Co. LP (KKR)

He has owned it for 12 years and hasn't sold any. The institutional part has grown as much as it can but the big companies are growing 15 to 20%. The retail business is potentially bigger than the institutional business with brand names catching a bigger share. Private credit may have had trouble but should be OK.

One of the largest private equity firms in the world, a troubled sector these days. But redemption requests at KKR are very low. Has a great growth profile in unique asset classes which are tough to replicate. Are gaining market share. The PE has fallen to 15x, cheap. Earnings could double in coming years. Is -25% this year.

Baby thrown out with the bathwater on concerns about exposure to private credit. Good secular growth opportunity in front of them as more dollars move out of conventional public markets and into private market alternatives. Lots of conviction in management.

You have to think of trends moving forward, especially for financing and underwriting new ideas. Just like the banks, companies like this will be necessary moving forward to provide all the financing to fulfill the trends. 

Likes the asset managers in general. He owns IAG, MFC, SII.

KKR is in private equity, and the concern is that there's so much interest in the sector. When everyone is into one thing, that thing really becomes stretched (like the Dutch tulip bulb craze). There's an element that people gave up on capital markets. There have been very few (and in Canada, almost no) new issues of public companies being listed.

In the US market, money's pouring into private equity. There's only so much you can do. Eventually it has to go public or do something. The question becomes whether there's too much $$ chasing too few opportunities in the sector. Now, that all may be priced into the stock. Not looking at this one at the moment.

There will be opportunities in private equity, especially private infrastructure. Many AI players, like Oracle and Meta, are doing private deals.

Global, leading asset manager in private market alternatives. AUM has grown at 18% compound pace, which gives them recurring management fee revenue. Also gets a share of profits on portfolios they manage. Acquired an insurance/annuity company in 2024 to smooth out volatility of private market businesses. 

About 8-10% off January highs. Catch-up trade is very likely. Yield is 0.50%.

We're in a market where liquidity is of value. In the private equity market, there have been difficulties getting deals liquidated. He's less interested in the area until the market for liquidating deals opens up.

Has pulled back from recent highs. Has growth potential and is run well. They continue to see flows in. This should move up, but is more volatile. Is a long-term hold, adding to pullbacks around its 50- and 200-day moving averages.

With interest rates not coming down as fast as expected, and with volatility in the market, there are concerns about its deal-making ability. Expects to see a lot of liquid products over the next 1-2 years from this name and its peers. Headwinds from tariffs and regulations, but those are dissipating at the moment.
 
Doesn't really have an opinion on KKR. The love of his life is BN, and they've owned it for quite a long time. Likes that it collects giant fees from diversified assets. His preferred play on alternative assets.

Yes, if you can handle the ride. No, if you can't. When Trump was elected last November on promises of market regulation, these stocks ripped. Then, tariffs hit, and KKR shares plunged. You can nibble at it here at these lows.

He looks at relative strength, head-to-head battles and who's winning. As money flew out of financials, he sold his position. Big correction at the beginning of February. Picked up support ~$110, similar to the August low. Starting to come back. If it can break out above the trend line ~$125, looks encouraging.

Private equity (used to be called leveraged buyouts). An American version of Brookfield is a way to conceptualize it. Manage $640B of private equity. Organic growth bolstered by recent acquisition, which takes them into insurance and annuities. Rapidly growing capital markets business. Secular advantage of private market flows are outpacing public market flows. Yield is 0.6%.

Loves it and its growth. Looking at it, but not ready to buy. Valuation needs to come down a bit more to meet his margin of safety, especially because it doesn't pay a big dividend (so you're relying on capital appreciation).

Knows the company well. For these companies, do they have sufficient cash if we enter a recession so you can deploy capital to buy at a lower prices (and sell as the economy improves). It's a good franchise, but he'd prefer buying Brookfield and some European names to avoid paying an extra premium.