AGT Partners on KKR
Thesis
Negative sentiment around private credit exposure is overblown. While retail funds have seen redemptions, net flows are near zero and institutional demand remains strong. The private credit market is not large enough to pose systemic risk. At a low-teens earnings multiple, the stock offers an attractive entry point, a view supported by meaningful insider purchases from the Co-CEOs.
“We believe our entry valuations, at low-teens earnings multiples, offer an attractive entry point over a multi-year horizon, and we added to both positions during the quarter. We also note that KKR’s Co-CEOs have made meaningful insider purchases during this period, which we view as an encouraging sign that they are aligned and see value at current price levels.”
Key risks
- Negative sentiment surrounding alternative asset managers’ private credit exposure.
- Concerns over gating / redemption restrictions in private credit funds.