Ralph Rosenberg and Chris Lee

KKR just announced its first-quarter report card, and no detention is in sight. The firm’s operating earnings were up 16 percent year-over-year at $1.1 billion, and its assets under management grew to $664 billion, a 15 percent year-over-year increase. A-plus, team. 

As volatility continues to ripple through the market, KKR is keeping its cool and finding savvy spots to deploy dollars. 

“Over the last 18 months, we’ve been much more of a net buyer,” Chris Lee, who runs KKR’s real estate ops with Ralph Rosenberg, said. “We’ve sold a few things, but there’s been a much better opportunity to buy than to sell. At some point, the capital markets will be fully operational from a debt and equity perspective, and that’ll be a better opportunity to sell assets.” 

Despite there not being a ton of liquidity in the market those 18 months, KKR found ways to invest across the globe, but primarily in the U.S. It bought around $8 billion of real estate last year, and completed some mammoth transactions in the living sector, including a portfolio of 19 purpose-built student housing properties from Blackstone’s BREIT for $1.64 billion in April, and a portfolio of 18 multifamily assets from Quarterra Multifamily — a subsidiary of Lennar Corporation — for approximately $2.1 billion in June.

Perhaps the most buzzed-about headline for KKR, however, was the decision to combine its $157 billion worth of infrastructure and real estate businesses. The firm also was especially active on the lending side, leaning into market dislocation to put out roughly $6.5 billion of loans across 54 deals, and was one of the largest investors in the junior tranches of CMBS.

In terms of KKR’s competitive advantage, “In the asset classes that we transact in, we have deep experience and expertise, and we also built a lot of our own dedicated operating capabilities in these sectors,” Lee said. “That allows us to move quickly, but also move in scale. We’ve been in business long enough now where if we show up and say we’re going to do something, we’re going to close on a certain timeline on a sizable transaction, people know that we’re going to do that.”

Finally, while Apollo Global Management is said to be leading Meta’s $35 billion data center fund raise, KKR is also part of that investor group.