KKR: Lowering Our Fair Value Estimate on Private Credit Headwinds

Morningstar has lowered its fair value estimate for KKR to $115 per share from $140 due to anticipated diminished fundraising and increased redemptions in its credit and liquid strategies segment, stemming from private credit market headwinds. Despite having less direct lending exposure compared to peers, KKR’s significant reliance on its credit segment (48% of fee-earning AUM and 31% of base management fees) makes it susceptible to these market concerns. Even with the reduction, KKR’s shares are still considered moderately undervalued, though immediate catalysts for movement are limited.