Again, that’s both domestic and international. And to date, we have very little market share in the pension risk transfer market, where we think the capabilities of our team will really resonate in that market as well. So it’s an opportunity for us to take share in what is a large and growing end market. And so when we take it together, it’s what gives us the confidence that you would have heard in our November call, really working as one firm to be able to accelerate the growth of the Global Atlantic platform over the next several years. Now an important part of that growth, and I referenced in our prepared remarks, relates to our ability to also be able to access third-party capital. And so our Ivy funds and strategies is a big part of where we’re going as an organization.
We’ve got a lot of momentum there. As I mentioned earlier, 75% of the capital required in the two block deals that we’ve got in flight right now, the MetLife one that just closed and Manulife is going to be funded by third parties, by outside investors. And we think that combination of GA balance sheet capital and third-party investors is really what the optimal structure looks like, especially for the institutional side of our business going forward.
Operator: The next question is a follow-up from the line of Bill Katz of TD Cowen. Please proceed with your question.
Bill Katz: I just want to circle back to capital management for a moment. Certainly appreciate you just raised the dividend by 6%. But if I start doing the math and look out to $4.50 of earnings power, and Rob, to your point, that more and more of your business is going to be more recurring in nature, and then just sort of think about sort of low single-digit type of dividend hikes that’s been sort of more recent past, your dividend payout ratio is going to drop pretty dramatically and then the yield on the stock is going to be relatively negligible. How are you thinking about cap return? I know there was a big discussion point at the November update. It’s a rich man’s issue, I presume. But how do we think about maybe priorities from here capital return versus deployment strategically?
Craig Larson: Sure. Thanks, Bill. So why don’t I start on the dividend policy and then just, I think, more importantly, talk about our overall approach to capital allocation, which is of equal importance. So on dividend policy, we really like our policy a lot. We started with a fixed dividend of $0.50 annually when we converted to a C Corp 5 years ago. And every year, we have increased that dividend. And we believe we’ve got the visibility going forward to have consistent and stable growth to our dividend. And so we like our dividend policy. Now a big reason why we have the dividend policy that we have is because we see so much opportunity to be able to invest back into KKR’s business for growth. And you’ve heard us talk about our capital allocation policy for some time in a very consistent way.
And I don’t think there’s anything more important from the capital allocation policy than being consistent. And our approach is to optimize for recurring and growth-oriented earnings per share. And we’ve talked about 4 core areas, strategic areas of deployment from our excess free cash flow back into our business. And those are going to come in insurance, core private equity, strategic M&A and share buybacks. And so I think we feel very fortunate that because of the business model we have, the brand we have, the access to capital we have and distribution, that we’ve got the opportunity to be able to invest back into our business at high levels of ROE that are going to drive really recurring and growth-oriented earnings per share over a long period of time for our investors.
So that’s our focus. We feel really good about our approach to capital allocation. I think it’s a real core competency of our management team and think that that’s what’s going to drive the highest amount of ultimate shareholder accretion for a long period of time. And of course, it’s very much a highly aligned decision since the management team of KKR own 25-plus percent of the stock.
Operator: We’ve reached the end of our question-and-answer session. And I’ll turn the call over to Craig Larson for closing remarks.
Craig Larson: Rob, thanks for your help. And thank you, everyone, for joining this call. We know that with our announcements that we made in late November, earnings today and with Investor Day on the horizon on April 10, we’re asking everyone to spend a healthy amount of time on all things KKR. Just want to thank everybody in advance for investing the time. Look forward again in particular to the deep dive on April 10. And if you have any questions following this call, please, of course, reach out to us directly. Thank you so much.
Operator: This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.
