KKR's fee-related earnings rose 37% to $1.21B and adjusted net income 40% to $1.49B ($1.63/share) on 25.5% management-fee growth, the Arctos deal and doubled realized carry; GAAP EPS was $0.70 vs $0.50.
Revenue
$5.7B
+12.5% YoY
Net income
$660M
+39.7% YoY
Diluted EPS
$0.70
+40.0% YoY
Overview
KKR had a strong second quarter of 2026 (April–June), and the gain came mainly from fees rather than from paper gains on its investments. Fee-related earnings (FRE) rose 37% to $1.21 billion. FRE is the profit KKR makes from the steady fees it charges to manage other people's money, after paying the staff and overheads tied to those fees. Adjusted net income (KKR's own after-tax earnings measure, built from realized cash results) rose 40% to $1.49 billion, or $1.63 per adjusted share. KKR says the per-share FRE, operating earnings and adjusted net income figures were all records for the company since it went public.
GAAP net income attributable to common stockholders was $660 million, or $0.70 per diluted share, up from $472 million ($0.50) a year earlier. But GAAP pre-tax income actually fell 10% to $1.37 billion. The reason: much of the reported income belongs to outside investors in funds that KKR has to include in its accounts (see "Why the GAAP numbers are hard to read" below).
Three things drove the quarter:
Management fees up 25.5% to $1.25 billion. The drivers were new money in the private equity and infrastructure K-Series vehicles (funds sold to wealthy individuals), fundraising for Global Infrastructure Investors V and North America Fund XIV, and the first two months of fees from Arctos, which KKR acquired on May 4, 2026.
A big jump in realized carried interest. Carried interest (or "carry") is KKR's share of the profits when a fund sells an investment for more than it paid. Realized performance income doubled to $848 million, mostly from the sales of OneStream Software, Flow Control Group and Kokusai Electric.
A change in how some fees are classified. It makes FRE growth look bigger than the underlying business growth (details below).
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
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Net income attributable to common stockholders (GAAP)
$660.1M
$472.4M
+39.7%
Diluted EPS (GAAP)
$0.70
$0.50
+40.0%
Fee-related earnings (FRE)
$1,214.1M
$886.8M
+36.9%
FRE per adjusted share
$1.32
$0.98
+34.7%
Total operating earnings (TOE)
$1,539.4M
$1,193.8M
+28.9%
Adjusted net income (ANI)
$1,492.7M
$1,063.4M
+40.4%
ANI per adjusted share
$1.63
$1.18
+38.1%
Assets under management (AUM, end of period)
$796.5B
$685.8B
+16.1%
Fee-paying AUM (end of period)
$638.4B
$556.2B
+14.8%
New capital raised
$34.3B
$28.0B
+22.6%
Capital invested
$24.2B
$17.7B
+36.5%
Per-adjusted-share figures and year-ago AUM, fee-paying AUM and capital raised come from KKR's Q2 2026 earnings release (Exhibit 99.1 to its July 30, 2026 Form 8-K). All other figures are from the Q2 2026 Form 10-Q.
A few definitions:
AUM (assets under management) is the total value of the money KKR manages for clients, including committed money it hasn't yet invested.
Fee-paying AUM is the part KKR actually charges a management fee on today.
Total operating earnings adds together FRE, the operating earnings of KKR's insurer Global Atlantic, and dividends from its Strategic Holdings. KKR calls this the "more durable and recurring" part of its profits. It made up 84% of segment earnings over the last twelve months.
Segment results
KKR reports three business segments:
Segment earnings
Q2 2026
Q2 2025
YoY Change
Asset Management
$1,587.3M
$1,127.0M
+40.8%
Insurance (operating earnings)
$288.2M
$277.9M
+3.7%
Strategic Holdings
$67.1M
$29.1M
+130.4%
Total segment earnings
$1,942.6M
$1,434.0M
+35.5%
Asset Management: the engine
Management fees by business line:
Management fees
Q2 2026
Q2 2025
YoY Change
Private Equity
$491.3M
$372.1M
+32.0%
Real Assets (infrastructure, real estate)
$417.8M
$310.4M
+34.6%
Credit and Liquid Strategies
$340.9M
$313.3M
+8.8%
Total
$1,250.0M
$995.8M
+25.5%
Part of the fee jump is a one-time catch-up. When a fund raises money late, the new investors pay fees backdated to the start of the fund's investment period. The 10-Q says about $41 million of the private equity fees and about $52 million of the real-assets fees were these retroactive fees. That's roughly $93 million that won't recur at the same level. Some fees also fell: Americas Fund XII's fee rate stepped down in Q3 2025, and Next Generation Technology Growth Fund III and Asian Fund IV moved into their post-investment periods. After that point, fees are charged on the smaller invested amount rather than on total commitments.
The reclassification matters for reading FRE growth. Starting this quarter, KKR counts performance fees from its K-Series private equity vehicles, about $160 million, as "fee related performance revenues" inside FRE. A year ago, about $80 million of the same kind of fees sat in realized performance income, outside FRE. KKR did not restate the prior year. It says the change brings its reporting in line with other listed alternative asset managers and has no effect on total segment earnings or ANI. Even so, fee-related performance revenues rose from $53.7 million to $254.7 million, and much of that jump is a change of label. So FRE's 37% growth overstates how fast the fee business grew. Growth in management fees (+25.5%) is the cleaner measure, and it is still strong.
Capital markets fees went the other way. Transaction fees fell to $178.2 million from $199.6 million because the deals were smaller, even though KKR completed more of them (112 vs. 93).
Realized carry is large, but KKR keeps a small share. Realized performance income was $847.5 million. Of that, $635.7 million (75%) went to compensation, leaving $211.9 million of net realized performance income for KKR. This follows the pay framework KKR adopted in November 2023, which moved more staff pay onto carried interest and less onto fees. That is also part of why FRE margins are high. Americas Fund XII alone produced $497 million of the gross carry.
Global Atlantic takes in money from annuity buyers and pension plans, invests it, and earns the difference between its investment return and what it pays policyholders. Net investment income rose 9.3% to $1.95 billion, helped by a larger asset base and higher portfolio yields. The net cost of insurance (mostly the interest credited to policyholders) rose faster, up 10.7% to $1.47 billion. The 10-Q attributes that to growth in reserves and higher crediting rates, as older, cheaper business originated when rates were lower runs off. The result was a 3.7% rise in insurance operating earnings to $288.2 million. According to the earnings release, about $40 million of that came from investment realizations. Without those, the underlying spread earnings would be below last year's $277.9 million. Global Atlantic's book value rose to $11.8 billion from $9.6 billion a year earlier.
Strategic Holdings: small but growing
This segment holds long-term stakes in companies through KKR's core private equity strategy. Operating earnings (dividends, net of fees paid to the Asset Management segment) rose to $37.0 million, all from USI Insurance Services. The segment also booked a $30.1 million realized gain from the partial sale of Viridor. KKR says it expects this segment to "contribute more meaningfully" to operating earnings over time.
Why the GAAP numbers are hard to read
KKR's GAAP statements combine two things that behave very differently from its core fee business:
Consolidated funds. KKR must include in its accounts certain funds and CLOs (pools of corporate loans packaged into bonds) that it controls, even though most of the money in them belongs to outside investors. Their paper gains and losses flow through KKR's revenue, and most of that is then removed again as "net income attributable to noncontrolling interests." That line fell to $373 million from $776 million because these vehicles had smaller investment gains this quarter. That drop explains how pre-tax income could fall 10% while net income for common stockholders rose 40%.
Global Atlantic's accounting. Insurance revenue includes large mark-to-market swings on hedges. Equity index options gained $974 million because the S&P 500 rose. But that gain is largely cancelled out by a matching increase in what Global Atlantic owes on its index-linked annuities, which is booked in "net policy benefits and claims." Policy benefits rose $517 million (+18.5%), mainly for that reason. The insurance side also recorded a $54.3 million addition to credit-loss allowances and a $53.4 million impairment on a bond it intended to sell (it was sold shortly after quarter-end).
The same effects make the six-month GAAP comparison look extreme. Net income for common stockholders was $1,024.9 million ($1.08 diluted EPS) in the first half of 2026, against $286.5 million ($0.29) in the first half of 2025. Adjusted net income grew far less, from $2,097.3 million to $2,742.2 million (+30.7%). For a firm like KKR, ANI and FRE track the business more closely than GAAP EPS does.
Takeaway: The core fee business grew fast: management fees rose 25.5% and fee-paying AUM rose 14.8% to $638 billion. But the headline 37% FRE growth is inflated by two things: about $160 million of K-Series performance fees now counted inside FRE, and roughly $93 million of one-time backdated fees. Management-fee growth is the number to track going forward. Insurance, KKR's second-largest profit source, barely grew once about $40 million of one-off gains is set aside.
Capital raised and money waiting to be invested
New capital raised was $34.3 billion in the quarter. Real Assets raised $15.7 billion (led by Helix Digital Infrastructure, infrastructure K-Series, Asia Infrastructure III and Global Infrastructure V), Private Equity $9.6 billion (led by Asian Fund V, Arctos Keystone Fund I and PE K-Series), and Credit $9.1 billion. Over the last twelve months KKR raised $133 billion.
Arctos brought in about $16.0 billion of AUM and $10.1 billion of fee-paying AUM at closing. KKR paid $1.4 billion in initial cash and stock, plus up to $550 million more in stock depending on performance targets.
Uncalled commitments (money clients have promised but KKR hasn't yet drawn to invest) reached $142.7 billion, up from $124.9 billion at the end of March. According to the earnings release, $72 billion of committed capital isn't paying fees yet. It carries a weighted-average fee rate of about 0.9%, and fees start once the money is invested or its fund's investment period begins. At that rate, the $72 billion would add roughly $650 million a year in management fees (our arithmetic, before any offsetting fee step-downs on older funds).
Unrealized carried interest (carry KKR would earn if its funds sold everything at current values) was $10.2 billion gross at quarter-end. That is a pipeline for future realized carry, but it depends on market conditions.
Outlook
KKR's filings give no numeric earnings guidance. The filings point to these things to watch:
Headwinds to fees. From Q2 2026, KKR has waived 100% of its share of the FS KKR Capital Corp. (FSK) incentive fee for four consecutive quarters. KKR earned no FSK performance revenue this quarter. That helps explain why Credit fee-related performance revenues fell to $6.4 million from $17.7 million a year earlier. The catch-up fees behind this quarter's Private Equity and Real Assets fee growth also won't repeat at the same size.
Tailwinds to fees. A full quarter of Arctos fees, the $72 billion of committed capital waiting to be invested, and continued K-Series inflows. K-Series AUM reached $42 billion, up from $25 billion a year earlier, according to the earnings release.
Events after the quarter (per 8-K filings). On August 26, 2026, KKR agreed to a settlement with the Justice Department's Antitrust Division over premerger-notification (HSR Act) claims tied to 2021–2022 deals. A KKR subsidiary would pay $250 million, subject to a final judgment taking effect. On August 31, KKR posted a presentation on the sale of USI Insurance Services to Aon. USI was the sole source of Strategic Holdings dividends this quarter, so that sale would change where the segment's earnings come from.
KKR declared a quarterly dividend of $0.195 per common share, payable August 25, 2026.
Our view: KKR's recurring earnings are growing at roughly 25–30%, driven by fundraising and the Arctos deal, not by market movements. Over the next few quarters the headline FRE growth rate should settle closer to management-fee growth, as this quarter's reclassification and catch-up fees fall out of the year-over-year comparison. For earnings to keep compounding at this pace, KKR needs to keep putting the $72 billion of committed-but-not-yet-paying capital to work, and Global Atlantic's investment income needs to outgrow its rising cost of insurance.