Should You Consider Investing in KKR?

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Third Avenue Management, an investment management firm, published its “Real Estate Value Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. During the quarter, the Fund returned -3.39%, compared to the most relevant benchmark, the FTSE/EPRA NAREIT Global ex-US Index (the “Index”), which returned -2.36% for the same period. Over the past year, the Fund generated a return of +12.02% (after fees) versus -0.78% (before fees) for the index. 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, Third Avenue Management International Real Estate Value Fund 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 global investment company with a $37.1 billion market capitalization. KKR & Co. Inc. (NYSE:KKR) delivered a -39.52% return since the beginning of the year, while its 12-month returns are down by -21.14%. The stock closed at $45.06 per share on June 16, 2022.

Here is what Third Avenue Management International Real Estate Value Fund has to say about KKR & Co. Inc. (NYSE:KKR) in its Q1 2022 investor letter:

“During the quarter it was reported that US private equity firm KKR (NYSE:KKR) purchased the Japanese fund management platform MC-UBSR, a joint venture between Mitsubishi Corp and UBS (NYSE:UBS) that manages two public Japanese REITs with US $15bn of total assets. The reported purchase price of US $2bn equated to more than 10% of assets under management and 32x trailing EBITDA. The high price paid for MC-UBSR surprised Fund Management. Such high pricing is likely a function of the difficulties foreign asset management firms face when attempting to build a platform in Japan from the ground up, and their frustration given Japan’s standing as one of the most liquid institutional real estate investment markets globally. When looking at the MC-UBSR transaction, the Fund’s investments in Tosei Inc and Nomura Real Estate Holdings are prime examples of the disconnect between public market pricing and private market pricing.”

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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 54 hedge fund portfolios at the end of the first quarter of 2022, compared to 55 funds in the previous quarter. KKR & Co. Inc. (NYSE:KKR) delivered a -21.85% return in the past 3 months.

In May 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.