By Isla Binnie and Arasu Kannagi Basil
NEW YORK (Reuters) -KKR executives signaled optimism for investment returns and dealmaking on Friday and sought to allay concerns about slower private equity fundraising, deal volume and credit defaults saying there was no reason for alarm.
KKR Chief Financial Officer Rob Lewin described the environment for monetizations, meaning selling or refinancing assets in its portfolio as “constructive” and said the U.S. private equity firm expects this to continue into 2026.
“Things feel healthy both in performance and exits,” Lewin told analysts on a conference call on Friday.
The traditional private equity model of buying and selling companies has been hampered as higher interest rates made it harder to profit from selling companies that were bought when rates were lower, at prices that in some cases look expensive.
KKR avoided some of that during the period of very low rates, having learned lessons from over-investing before the global financial crisis, Co-Chief Executive Scott Nuttall said.
“We told the firm, do not confuse a bull market with brains,” Nuttall said, adding that as a result KKR is now in a position of “not having too much exposure to 2021 and 2022”.
Market sentiment was currently “closer to the high anxiety end” on private equity fundraising and private credit risk, Nuttall said, adding that although public and private credit defaults had picked up, there was “nothing alarming going on”.
KKR executives said on the call that the firm had no exposure to auto parts supplier First Brands or car dealership Tricolor, whose bankruptcies have rattled debt markets.
Rising inflows, particularly to its own credit businesses, supported KKR’s quarterly earnings to beat Wall Street’s expectations on Friday, although news of a charge on an Asia fund reversed early gains in the stock.
(Reporting by Isla Binnie in New York and Arasu Kannagi Basil in Bengaluru; Editing by Mark Porter and Alexander Smith)
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