In just over two weeks, a global financial giant will celebrate the 50th anniversary of its founding. On May 1, 1976, Henry Kravis and George Roberts founded KKR together with their mentor Jerome Kohlberg. What began as a U.S.-focused private equity firm with initial capital of USD 120,000 has evolved into a broadly diversified corporation. Today, KKR operates across asset management, insurance, and strategic holdings. By the end of 2025, assets under management (AuM) in its core business totaled USD 744 billion. Since 2010, AuM has grown at an average annual rate of nearly 20% (see chart). Listed on the New York Stock Exchange (NYSE) since 2010, KKR’s stock, with a current market capitalization of around USD 81 billion, is a member of the S&P 500 Index. However, as the milestone anniversary approaches, the company is under pressure on Wall Street: since the start of the year, KKR has lost roughly a quarter of its market value.
KKR is not alone in its weak performance. The entire sector has recently come under pressure. On the one hand, the rise of artificial intelligence has weighed on valuations. The concern is that AI could disrupt entire industries in which asset managers are invested. In addition, there are growing issues in the private credit space. In recent years, corporate financing through non-bank lenders has surged. Specialized funds have attracted capital from wealthy individuals and institutions - among other things by promising regular payouts. At the same time, private credit has become an important funding source for small and mid-sized companies that traditional lenders consider too risky. However, doubts about credit quality and transparency in this segment have increased. Here, too, AI plays a role, as private credit is heavily exposed to the struggling software sector.
Investors are now increasingly withdrawing capital from the roughly USD 2 trillion sector. Several funds have had to make use of provisions allowing them to limit redemptions. This also applies to the KKR FS Income Trust, or K-FIT. In the first quarter of 2026, the fund received redemption requests for around 6.3% of its outstanding shares. KKR management intends to meet only about 80% of these requests. By contrast, all redemption requests were fulfilled for another private credit product, the KKR FS Income Trust Select (K-FITS). In this case, inflows from new subscriptions during the past quarter exceeded redemption requests. In any case, private credit is likely to be a key topic when KKR presents its results for the first three months of 2026 on May 10. The company is also planning a conference call for that date.
Leonteq has already launched interesting new issuances on KKR. One example is the classic autocallable barrier reverse convertible. Investors can expect a fixed quarterly coupon payment. As long as the underlying does not fall to or below the barrier, Leonteq will repay the nominal value in full at maturity. For investors who are more skeptical about KKR, Leonteq has issued an inverse autocallable BRC. Here, too, the coupon payment is guaranteed. Unlike the classic BRC, the barrier is set well above the strike. Both structures include an autocallable feature. The classic BRC is called and redeemed early if the underlying trades above the strike on an observation date. For the bearish variant, early redemption occurs if KKR is trading below the strike on the observation date.
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