(Bloomberg) — KKR & Co. co-Chief Executives Joe Bae and Scott Nuttall take a cue from Berkshire Hathaway Inc.’s business model Take inspiration and bet on long-term private equity ownership and the dividends that come with it.
The company’s strategic holdings unit, created to hold 19 long-term private equity investments, is expected to pay out more than $300 million in dividends by 2026 and 2028, Bae said in an interview with Bloomberg TV at the company’s headquarters on Thursday. This number will be doubled in 2016.
“Berkshire Hathaway is an apt analogy,” Pei said, referring to Warren Buffett’s conglomerate. “There are a lot of powerful messages in what Berkshire has created. It’s the power of owning assets, great businesses, for the long term. The power of compound interest, and the real power of intellectual capital deployment within a business.”
KKR is betting on private equity gains as some peers move away from acquisitions because they believe the business has scaled and the biggest returns are a thing of the past. KKR’s private equity business has doubled in size over the past five years.
“We are students of creating long-term valuations,” Nuttall said.
Founded in 1976 by Henry Kravis, Jerome Kohlberg and George Roberts, KKR has grown beyond its private equity roots into an alternatives Management giant whose strategies include acquisitions, credit, infrastructure, real estate and insurance.
At an investor day this week, KKR executives said they plan to expand the company’s assets under management to $1 trillion within five years and reach annual adjusted net income of at least $15 within ten years. The strategic holdings segment’s operating profit is expected to reach $1 billion by 2030.
read more: KKR aims to reach $1 trillion in assets over the next five years
