Despite persistently high interest rates in the private equity industry and a growing overhang of unsold portfolio companies, coupled with increasing concerns about the impact of artificial intelligence on the software sector, KKR achieved record results in the second quarter of 2026. Fee-related earnings rose annually by 37 percent to $1.21bn, partly due to an increase in management fees of more than 25 percent. Total operating earnings increased by 29 percent year-on-year to $1.53bn – the highest quarterly result in the company's 50-year history.
Revenue increased to $5.73bn from $5.09bn the previous year. Quarterly net profit grew by almost 40 percent annually to $660.1m. Scott Nuttall, Co-CEO, commented on the current market situation during the company's conference call: “Our industry is increasingly K-shaped. Most of the external focus will be on the unfortunate part of the K. We find ourselves on the fortunate part of the K.” KKR divested stakes in eight companies, including the Japanese semiconductor manufacturing company Kokusai Electric and the Korean shipbuilding company HD Hyundai Marine Solution.
Although KKR’s opportunistic real estate portfolio recorded a gross loss of 1 percent in the second quarter, it generated a gross return of 1 percent over the last 12 months. KKR raised $34bn in new capital during the quarter, bringing its fund volume to a record $133bn in the twelve months to June. The investor is making progress in AI infrastructure and has so far invested and committed over $75bn in digital infrastructure and energy.
Investments in Digital Infrastructure and New Business Areas
Company executives predict that infrastructure development will cost trillions of dollars over the coming decade. In June, KKR launched a $10bn venture to address the infrastructure needs for building data centres. Other partners in this joint venture, known as Helix Digital Infrastructure, include power generator Vistra, the Kuwait Investment Authority and chip manufacturer Nvidia. Nuttall emphasised that they would offer an end-to-end solution and that this represents an incremental and continuous evolution given the massive capital requirements.
Beyond AI, KKR completed the acquisition of Arctos Partners, a leading sports investment firm, in a $1.4bn deal in May. A month later, KKR raised $6.2bn to establish its first fund. At the end of the second quarter, uninvested capital stood at $143bn. Assets under management increased by 16 percent year-on-year to $796bn.
Market Valuation and Outlook
Despite the remarkable gains, Wall Street remains concerned. KKR’s share price has fallen by almost 24 percent since the start of the year. This indicates that external perception and market sentiment remain crucial factors for valuing companies in a dynamic environment such as the present.
