KKR's AUM Hits $758B Amid Push for Recurring Fees; Wait-and-See Rating Maintained

What happened

KKR's AUM expanded to $758B, driven by credit and perpetual capital, reinforcing its strategy to build a recurring fee base. The DeepValue report maintains a WAIT rating, noting the stock at ~$104 prices in optimistic retail distribution and credit growth. Key catalysts in the next 3-6 months are the Capital Group Equity+ launch and private credit default trends, which recently rose to 2.46%. Risks include rising defaults and retail BDC drawdowns (KKR's BDC down 33% in 2025), threatening the retail/retirement channel. Despite AUM growth, a 39.7x P/E and net debt/EBITDA of 3.9 leave minimal margin for error, making execution and credit stability crucial.

Implication

If Equity+ launches and defaults stabilize, KKR's fee engine supports a base case of $120; failure could lead to $80.

Thesis delta

The prior thesis emphasized broad AUM growth; now the focus shifts to execution of retail products and credit stability. The next 3-6 months are decisive: a successful Equity+ launch and contained defaults support the $120 base, while a default acceleration or launch delay triggers downside to $80. The risk of a negative feedback loop from rising defaults and retail outflows now dominates the investment case.