KKR's Capital Markets Unit Reports Record Fees on Structured Credit Growth

KKR & Co.'s capital markets unit generated $1 billion in fees for 2024, a significant increase from the $577.6 million reported in 2023.

This growth was primarily driven by a surge in structured-credit transactions. The unit originated $131 million in loans for non-KKR-owned companies and $139 million in structured-capital transactions, which involve financing backed by assets.

"This trend reflects institutional capital flowing into private investment-grade markets, creating new financing options traditionally funded by banks," said Adam Smith, head of KKR's capital markets unit.

Launched in 2006, the unit has generated $6 billion in fees since inception. Alternative asset managers like KKR are increasingly providing loans to companies as banks reduce lending due to stricter capital requirements.

KKR has expanded its asset-based lending team to capitalize on this market opportunity. The acquisition of Global Atlantic has also allowed KKR to utilize its insurance business to support capital markets transactions.

Notable transactions contributing to the record fees include a credit facility for data center company CyrusOne and advisory services for Lineage's IPO, the largest IPO of 2023.