Alphyn Capital Management, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. A quarterly portfolio net return of -13.4% was recorded by the fund for the first quarter of 2022, compared to its benchmark, the S&P 500 TR Index which delivered a -4.6% return for the same period. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Alphyn Capital Management mentioned KKR & Co. Inc. (NYSE:KKR) and explained its insights for the company. Founded in 1976, KKR & Co. Inc. (NYSE:KKR) is a New York, New York-based private equity company with a $44.7 billion market capitalization. KKR & Co. Inc. (NYSE:KKR) delivered a -29.42% return since the beginning of the year, while its 12-month returns are down by -7.07%. The stock closed at $52.58 per share on April 28, 2022.
Here is what Alphyn Capital Management has to say about KKR & Co. Inc. (NYSE:KKR) in its Q1 2022 investor letter:
“KKR’s share price was impacted by the general market and worries about interest rates, as Private Equity’s business model relies on good exit multiples and leverage. Approximately 20% of KKR’s portfolio is in public equities and is marked to market; for example, the 43% decline in Applovin cost KKR ~$3bn in value.
Nevertheless, KKR’s long-term performance driver remains the growth in its fee-paying assets under management (PFAUM), on which KKR earns both management and performance fees. So long as KKR continues to earn good returns for its investors, the growth in fees will continue to compound to KKR’s benefit. Moreover, as 90% of PFAUM is perpetual or has a duration of over eight years, we have the rare advantage of good visibility into a key component of future performance.
Large managers, such as KKR, are highly diversified, have good track records, and receive the lion’s share of industry AUM. KKR’s capital recycling machine is in great shape. In 2021, KKR grew FPAUM 92% to $357 bn, deployed a staggering $73bn, and had gross unrealized carried interest of $8.6bn. In 2022, besides traditional private equity in the Americas and Europe, KKR will raise $13bn for five funds in Asia across infrastructure, real estate, credit, and growth. It will also raise $12bn for 5 “core” strategies, which are lower-risk assets that are more stable, less cyclical, and more cash-generative than those targeted by traditional private equity, and $15bn for ten real estate strategies. In March, it acquired Mitsubishi Corp.- UBS Realty Inc. with $15bn in AUM. As with other alternative managers, KKR is looking to grow its business with retail investors and insurance companies, both of which are underserved by alternatives and represent significant opportunities.”
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Our calculations show that KKR & Co. Inc. (NYSE:KKR) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. KKR & Co. Inc. (NYSE:KKR) was in 55 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 56 funds in the previous quarter. KKR & Co. Inc. (NYSE:KKR) delivered a -22.89% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on KKR & Co. Inc. (NYSE:KKR) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
