River Road Asset Management, an investment management company released its “River Road Large Cap Value Select Fund” Q4 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, AMG River Road Large Cap Value Select Fund returned 0.43% compared to (1.98%) return for the Russell 1000® Value Index. For the year 2024, the fund returned 24.59% significantly outperforming Index return of 14.37%. Stocks rallied in November after a Republican victory but declined sharply following hawkish Fed comments. Shorter duration stocks, including small caps and value, lost most of their post-election gains by the end of December. For more information on the fund’s best picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, River Road Large Cap Value Select Fund emphasized stocks such as KKR & Co. Inc. (NYSE:KKR). KKR & Co. Inc. (NYSE:KKR) is an equity and real estate investment firm. The one-month return of KKR & Co. Inc. (NYSE:KKR) was -13.31%, and its shares gained 16.86% of their value over the last 52 weeks. On March 27, 2025, KKR & Co. Inc. (NYSE:KKR) stock closed at $117.54 per share with a market capitalization of $108.468 billion.
River Road Large Cap Value Select Fund stated the following regarding KKR & Co. Inc. (NYSE:KKR) in its Q4 2024 investor letter:
“Another positive contributor was KKR & Co. Inc. (NYSE:KKR), a leading global alternative asset manager. Institutions have sought out KKR’s dynamic investment expertise for nearly 50 years. The company’s AUM has grown at a 20% CAGR since 2011 as it has broadened its product line-up to include infrastructure, real estate, credit, and liquid strategies for the mass market. Over 90% of the company’s assets are “locked-up” for at least eight years and over 50% are perpetual. Insiders own 36% of the company, and we believe the balance sheet is rock solid with net cash and ~30% of its market cap represented by illiquid investments, that will soon begin paying material dividends to KKR.
KKR’s stock performance in Q4 was driven by exceptional growth across key metrics, with Fee Related Earnings surging 79% year over-year at an impressive 71% margin, while Total Operating Earnings grew 37%, demonstrating the increasing durability of earnings with 81% coming from recurring sources. The company’s fundraising momentum remained strong with $24B raised in the quarter ($85B year-to-date as of September 30, 2024), while assets under management (AUM) grew 18% year-over-year to record levels, driven by strength in infrastructure (growing from $13B to $77B), credit ($240B AUM), and Asia ($70B AUM). Management’s successful execution across multiple growth initiatives, including the expansion of retail products and strategic holdings, combined with improving realization opportunities and capital markets activity ($424MM in Q3), reinforces the company’s path to potentially significant earnings growth with management projecting potential adjusted net income of $7 per share by 2026. We maintained the position.”
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KKR & Co. Inc. (NYSE:KKR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 83 hedge fund portfolios held KKR & Co. Inc. (NYSE:KKR) at the end of the fourth quarter compared to 66 in the third quarter. While we acknowledge the potential of KKR & Co. Inc. (NYSE:KKR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
We covered KKR & Co. Inc. (NYSE:KKR) in another article, where we shared the list of top stocks to buy according to Akre Capital Management. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.