KKR Sees Strong Performance, Has Low Allocations Towards Software Investments

KKR (NYSE:KKR) saw a 17 percent increase in assets under management to $744 billion in 2025, highlighting what co-CEO's Joseph Bae and Scott Nuttall called "a strong year" for the company.

Fee paying assets under management (AUM) increased 18 percent year over year to $604 billion. The firm raised $28 billion in new capital during the fourth quarter and $129 billion in the year, a record annual figure for the firm.

The firm's dry powder now stands at $118 billion, diversified across the firm's investment strategies.

In KKR's private equity segment, AUM increased 3 percent quarter-over-quarter and 17 percent year-over-year to $229 billion, with new organic capital of $5 billion raised during the quarter and $27 billion for the year.

The firm invested $9 billion in capital within its private equity segment during the fourth quarter. This was primarily driven by private equity in Europe and the Americas, as well as core private equity.

The traditional private equity portfolio appreciated 14 percent during the year.

"In private equity, in clear contradiction to headlines, our AUM has doubled over the last five years. We’re also seeing this across investor types. Sovereign wealth funds remain engaged, insurance companies continue to increase allocations, pension plans are working to close gaps in infrastructure and private credit, and private wealth remains in the early stages of adoption," Nutall said during the call.

KKR's credit segment AUM saw a 2 percent increase quarter-over-quarter and 17 percent year-over-year to $322 billion with new organic capital raised of $13 billion in the quarter and $68 billion for the year.

The firm invested $15 billion in capital in its credit segment during the quarter and $44 billion in the year.

On the topic of software, executives noted that software investments only account for about 7 percent of their assets under management. The CEO noted that KKR's concentration is "well below" the industry average, and tariff risk is "low single-digit percentage" exposure as well.

TPG Experiences A "Breakout Year" In Credit:

TPG's (NYSE:TPG) CEO John Winkelried stated that the firm's credit franchise experienced a "breakout year," raising $21 billion of credit capital during the year. This is up 67 percent from 2024, with a record $9 billion raised in the fourth quarter alone. 

The credit platform invested $25 billion in 2025, a 54 percent increase year-over-year. The firm ended the year with $72 billion in dry powder. Its credit franchise has approximately $18 billion in dry powder alone.

"After setting ourselves up with substantial dry powder, our credit investment pace has begun to accelerate as we access a broader set of opportunities, which is driving management fee growth," the CEO said during the fourth quarter investor call. 

On the topic of software and AI, the CEO noted that 18 percent of the firm's private equity book is invested in software, with the sector representing 11 percent of the firm's total AUM.

"As long-term, focused investors, market dislocation generally creates compelling opportunities. With valuations resetting across the board, we believe we’re well positioned to capitalize on attractive investments by continuing to apply our disciplined approach to this important sector," the CEO added.

Winkelried also called this an "outstanding" year for the company, as the firm's total AUM increased 23 percent in 12 months, to $303 billion.

Fee-earning assets under management increased 20 percent to $170 billion over the same period, primarily driven by fee-earning capital raised of $22 billion, including $10 billion in TPG X in the Capital platform and $1.9 billion in Rise Climate II in the Impact platform, and deployment of $20.5 billion.

TPG raised $51 billion in capital in 2025, a 71 percent increase over the prior year. Total capital deployed during the year reached $52 billion, the highest annual in TPG's history.

"This reflects the strong upward trajectory of our capital formation efforts as our franchise has scaled and diversified," Winkelried said on the call.

For 2026, the firm expects to exceed $50 billion in fundraising, with continued growth in real estate, credit platforms, and private wealth channels. TPG is also targeting a fee-related earnings margin of 47 percent and expects to generate more than $50 million in realized performance revenue in Q1 2026.

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