The real estate business and particularly KKR's credit strategy got a boost on Feb. 1 when KKR's $4.7 billion acquisition of insurance company Global Atlantic Financial Group Ltd. closed. The acquisition of Global Atlantic contributed $98 billion to KKR's AUM in the first quarter, earnings release materials show.
"Management of all of the real estate exposure on the Global Atlantic balance sheet was transferred over to our real estate team," Mr. Rosenberg said.
KKR did not break out how much Global Atlantic has in real estate assets. Global Atlantic had $12 billion in private market assets including real estate when the deal closed.
Global Atlantic's real estate portfolio is consistent with a traditional insurance company real estate portfolio. It includes first mortgage exposure that is 40% to 50% loan-to-value, he said.
"It's a different risk profile than our mortgage REIT," Mr. Rosenberg said.
KKR also actively manages and trades a commercial mortgage-backed securities portfolio for Global Atlantic, he said.
"The reason the Global Atlantic real estate credit exposure is really strategic for us is scale," Mr. Rosenberg said. "The number allows us to talk to borrowers about both transitional financing and stabilized financing."
KKR real estate executives are pushing to continue that growth trajectory. Craig Larson, head of investor relations, said in KKR's second-quarter earnings call on Aug. 3 that the firm held a final close of its second European real estate fund at $2.1 billion, three times the size of its first European real estate fund. It also saw a $3 billion first close for its third KKR Real Estate Partners Americas fund.
"With these closures, we are now a clear top five opportunistic real estate manager," Mr. Larson said.
Even so, KKR will have a way to go before eclipsing another New York private equity firm, Blackstone Inc., which had $207.5 billion in real estate assets as of June 30, up 24.5% from $166.7 billion a year earlier.
KKR ranks 24th on Pensions & Investments' just-released list of the top real estate managers ranked by total worldwide assets as of June 30. Top ranked MetLife Investment Management had $137 billion as of June 30. (Blackstone did not participate in this year's survey.)
However, KKR is building its assets under management at a triple-digit clip, compared to MetLife's global real estate asset growth of 2.8%. As for assets managed for U.S. tax-exempt institutions, KKR's AUM was up 47% to $5.3 billion; Nuveen, which is No. 1 on the list, saw 14% growth to $92 billion.