KKR & (KKR) risk factors, 2025 10-K

Risks Related to Our Business

1. 01Difficult market and economic conditions can, and periodically do, materially and adversely affect KKR
2. 02Geopolitical developments and other local and global events outside of our control can materially and adversely impact KKR
3. 03Natural disasters and catastrophes could materially and adversely affect KKR
4. 04We have significant liquidity requirements, and adverse market and economic conditions may adversely affect our sources of liquidity, which could materially and adversely affect KKR
5. 05AUM, referred to as perpetual capital, is subject to material reduction, including through withdrawal, redemption or dividends, and termination
6. 06Many parts of our earnings and cash flow are highly variable due to the nature of our business
7. 07The "clawback" provisions in the agreements governing our carry-paying funds may give rise to a contingent obligation that may require us to return or contribute significant amounts to our funds and fund investors
8. 08Our inability to raise additional or successor funds, to raise funds with as favorable terms or comparable size as existing or predecessor funds, or to raise capital for other investment vehicles could materially and adversely affect KKR
9. 09The investment management and insurance businesses are intensely competitive
10. 10We are subject to focus by some of our fund investors, stockholders, regulators and other stakeholders on environmental, social and governance matters
11. 11Changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could adversely impact our effective tax rate and tax liability
12. 12Additionally, foreign, state and local governments may enact laws that could result in further changes to foreign, state and local taxation and materially affect us in jurisdictions in which we or our portfolio companies operate
13. 13We depend on the efforts, skills, reputations, business contacts, and conduct of our employees and our ability to retain our employees and to recruit prospective employees
14. 14We rely significantly on third-party service providers and other intermediaries, which exposes us to operational, reputational and other risks that could materially and adversely affect KKR
15. 15The inability to recover assets from the prime broker or custodian could have a material adverse impact on the performance of our investment vehicles and our financial results
16. 16Cybersecurity failures and data security breaches may disrupt or have a material adverse impact on our businesses, operations and investments
17. 17Artificial intelligence could increase competitive, operational, legal and regulatory risks to our businesses in ways that we cannot predict
18. 18Rapidly developing and changing global privacy and data laws and regulations could further increase compliance costs and subject us to enforcement risks and reputational damage
19. 19including obligations to protect and safeguard consumers’ nonpublic personal information and records, and limits the ability to share and reuse such information
20. 20We may expand into new investment strategies, geographic markets and businesses and new types of investors or seek to expand our business or change our strategic focus with new strategic initiatives, which may result in additional risks and uncertainties in our businesses
21. 21Our liquidity, business, results of operations and financial condition could be materially and adversely affected if we fail to manage our balance sheet commitments
22. 22Extensive regulation of our businesses affects our activities and creates the potential for significant liabilities and penalties, which could materially and adversely affect KKR
23. 23Certain Recent and Potential Regulatory Developments
24. 24between the DOJ and us related to the accuracy and completeness of certain filings made by KKR pursuant to the premerger notification requirements under the HSR Act for certain transactions in 2021 and 2022
25. 25Current Alternative Asset Manager Legal and Regulatory Environment
26. 26Other Financial Markets Regulation
27. 27Portfolio Company Legal and Regulatory Environment
28. 28Anti-corruption, economic sanctions, trade controls, and foreign direct investment laws
29. 29We face significant harm as a result of legal claims, litigations, investigations, and negative publicity
30. 30Certain types of investment vehicles, especially those offered to individual investors, may subject us to a variety of risks, including new and greater levels of public and regulatory scrutiny, regulation, risk of litigation and reputational risk, which could materially and adversely affect us
31. 31Our capital markets activities expose us to material risks
32. 32Risk management activities may not be effective and, consequently, may adversely affect us
33. 33limit the exposure to a market development that is so generally anticipated that a hedging or other derivative transaction cannot be entered into at an acceptable price

Risks Related to Our Investment Activities

1. 34Future results of our investments may be different than, and may not achieve the levels of, any of our historical returns
2. 35Our valuation methodologies for certain assets can be subjective, and the fair value of assets established pursuant to such subjective methodologies is uncertain and may never be realized
3. 36Various market and economic conditions and events outside of our control that are difficult to quantify or predict may have a significant impact on the valuation of our investments and, therefore, on our financial results
4. 37Our investment activities have significant liquidity requirements, and changes in debt or equity markets may materially and adversely affect our investment activities
5. 38Dependence on significant leverage in our investments could adversely affect our ability to achieve attractive rates of return on those investments
6. 39Various exposures to, and investments in, the securities of leveraged companies or companies that are experiencing significant financial or business difficulties involve significant risks
7. 40Our equity investments and some of our debt investments rank junior to investments made by others, exposing us to greater risk of losing our investment
8. 41The due diligence process that we undertake in connection with our investments may not reveal all facts that may be relevant in connection with an investment
9. 42We often pursue investment opportunities that involve unique business, regulatory, legal, tax or other complexities, including complexities arising from the large size of our investment or from a lack of control over the investment, which involves significant risks
10. 43which the investment is made may make business, financial or management decisions with which we do not agree, or that the majority stakeholders or the management of the company may take risks or otherwise act in a manner that does not serve our interests
11. 44We make investments that are highly concentrated by type of issuer, geographic region, asset types, or otherwise
12. 45Many of our investments are illiquid, and we may fail to realize any profits from our investments for a considerable period of time or lose some or all of the capital invested
13. 46time. Moreover, with respect to investments that we hold directly, we may determine that we may be required to sell these investments alongside our funds’ investments at such times
14. 47Our investments in real assets such as real estate, infrastructure and energy may expose us to increased risks and liabilities
15. 48For example, investments in real assets may, among other things, involve the following risks
16. 49Our growth equity strategy invests in emerging and less established companies that are heavily dependent on new technologies where success is less certain
17. 50Third-party investors in our investment vehicles with commitment-based structures may not satisfy their contractual obligation to fund capital calls when requested by us, which could adversely affect an investment vehicle's operations and performance
18. 51Our business activities may give rise to a conflict of interest with our clients
19. 52Investors in certain of our investment vehicles are entitled to redeem their investments in these vehicles on a periodic basis, and certain of our investment advisory agreements may be terminated with minimal notice
20. 53Our stakes in our hedge fund partnerships subject us to numerous additional risks

Risks Related to our Insurance Activities

1. 54Our plans for Global Atlantic may not achieve their intended benefits, and certain challenges, costs or expenses may outweigh such intended benefits
2. 55Volatile market and economic conditions, including sustained periods of low interest rates, a sustained increase in interest rates and other interest rate fluctuations, may adversely affect our insurance business
3. 56Our insurance business relies on third parties to distribute its insurance products, and any disruption with our third-party distribution network could have a material adverse effect on us
4. 57We may be required to accelerate the amortization of deferred revenues and expenses, including DAC and VOBA
5. 58Differences between Global Atlantic's policyholder behavior estimates, reserve assumptions and actual claims experience, in particular with respect to the timing and magnitude of claims and surrenders, may adversely affect KKR
6. 59Estimates used in the preparation of financial statements and models for insurance products may differ materially from actual experience as these determinations involve a significant degree of judgment
7. 60Global Atlantic's growth strategy includes reinsurance of insurance obligations written by unaffiliated insurance companies, and its ability to both consummate and realize the anticipated financial benefits from reinsurance transactions is uncertain
8. 61Global Atlantic's actual or perceived financial strength impacts its ability to sell its products, and a downgrade in Global Atlantic's ratings or in the ratings of its insurance subsidiaries could materially and adversely affect Global Atlantic's ability to compete, raise equity or issue debt
9. 62Global Atlantic faces risks associated with business it reinsures and business it cedes to reinsurers, which could cause a material adverse effect on us
10. 63Changes in accounting standards could adversely impact our insurance business
11. 64Global Atlantic may experience volatility in its net income under GAAP due to its funds withheld and modified coinsurance transactions
12. 65Global Atlantic holds a significant portion of its reinsurance assets in trust, which may restrict Global Atlantic's ability to invest those assets and also may permit the ceding company to withdraw those assets from the trust in certain circumstances
13. 66Certain of Global Atlantic's reinsurance agreements contain triggers that permit the reinsurance client to recapture some or all of the reinsured portfolio, which, if triggered, may have a material adverse effect on us
14. 67The determination of the amount of impairments and allowances for credit losses recognized on Global Atlantic's investments is highly subjective and could materially affect us
15. 68Global Atlantic's membership in Federal Home Loan Banks subjects Global Atlantic to potential liquidity and other risks
16. 69From time to time, Global Atlantic participates in repurchase and reverse repurchase transactions that subject Global Atlantic to liquidity risks
17. 70Changes in relevant tax laws, regulations or treaties or an adverse interpretation of these items by tax authorities could adversely impact our insurance business
18. 71the IRS were to successfully challenge the tax treatment of these transactions, or if legislation were enacted, or administrative guidance promulgated, that altered the expected tax treatment of such transactions, we could be materially and adversely affected
19. 72Global Atlantic's businesses are heavily regulated across numerous jurisdictions and changes in regulation could reduce the profitability of our insurance business
20. 73If our relationships, or our reputation with, various regulatory authorities were to deteriorate, we could be materially and adversely affected, including by making it more difficult, or impossible, for Global Atlantic to obtain necessary consents and approvals
21. 74Our Bermuda insurance subsidiaries are subject to regulation by the BMA that may restrict their operations, and we cannot guarantee that insurance supervisors in the United States or elsewhere will not in the future assert that our Bermuda insurance subsidiaries are subject to additional licensing requirements
22. 75The BMA continues to consider further revisions to the Bermuda capital ratio, called BSCR, and may propose further updates to certain aspects of the EBS Framework. Any such updates may materially increase the capital our Bermuda insurance subsidiaries must hold
23. 76Global Atlantic may not be able to mitigate the reserve strain associated with statutory accounting rules, potentially resulting in a negative impact on Global Atlantic's capital position or in a need to increase prices or reduce sales of certain insurance products

Risks Related to Our Organizational Structure

1. 77The Series I preferred stockholder’s significant voting power limits the ability of holders of our common stock to influence our business, and conflicts of interest may arise among the Series I preferred stockholder and the holders of our common stock
2. 78The Series I preferred stockholder has significant voting power, which limits the ability of holders of our common stock to influence our business. Our Co-Executive Chairmen, when acting together, jointly control the Series I preferred stockholder and thereby the vote of the Series I preferred stock held by it
3. 79The vote of our Series I preferred stock will determine the outcome of all matters that are not listed below as being subject to a vote by our common stock
4. 80As a result, conflicts of interest may arise among the Series I preferred stockholder and its controlling persons, on the one hand, and us and the holders of our common stock, on the other hand
5. 81As a “controlled company,” we qualify for some exemptions from the corporate governance and other requirements of the NYSE and are not required to comply with certain provisions of U.S. securities laws
6. 82Our certificate of incorporation states that the Series I preferred stockholder is under no obligation to consider the separate interests of the other stockholders and contains provisions limiting the liability of the Series I preferred stockholder
7. 83The provision of our certificate of incorporation requiring exclusive venue in the state and federal courts located in the State of Delaware or federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against us and our directors, officers and stockholders
8. 84An investment in our common stock is not an investment in any of our investment vehicles, insurance companies or other businesses operated by our subsidiaries, and the assets and revenues of our investment vehicles are not directly available to us
9. 85Our common stock price may decline due to the large number of shares eligible for future sale, and issued or issuable pursuant to our equity incentive plans or as consideration in acquisitions
10. 86Incentive Plans that are settled in cash instead of shares of common stock. We may issue and sell shares of our common stock in the future for similar purposes or for any other purpose we deem to be appropriate
11. 87Future issuances of preferred stock may cause the price of our common stock to decline, which may negatively impact our common stockholders
12. 88Our certificate of incorporation provides us with a right to acquire all of the then outstanding shares of common stock under specified circumstances, which may adversely affect the price of our common stock and the ability of holders of our common stock to participate in further growth in our stock price
13. 89We intend to pay periodic dividends to the holders of our common stock, but our ability to do so may be limited by our holding company structure, contractual restrictions, our cash flow from operations and available liquidity
14. 90We will be required to pay certain principals for most of the benefits relating to our use of tax attributes we receive from historical exchanges of our common stock for KKR Group Partnership Units
15. 91If we were deemed to be an "investment company" subject to regulation under the Investment Company Act, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business
16. 92We may from time to time undertake reorganizations that may adversely impact us
17. 93Anti-takeover provisions in our organizational documents could delay or prevent a change of control