Here’s Why Diamond Hill Capital Remains Optimistic in KKR

Diamond Hill Capital, an investment management firm, published its “Diamond Hill Large Cap Fund” first-quarter 2022 investor letter – a copy of which can be downloaded here. During a volatile quarter, Diamond Hill Large Cap Fund held up better than the Russell 1000 Index by a decent margin in Q1. After a strong rebound in 2021, global GDP growth is expected to moderate in 2022. Try to take some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Diamond Hill Large Cap 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 private equity company with a $39.3 billion market capitalization. KKR & Co. Inc. (NYSE:KKR) delivered a -38.03% return since the beginning of the year, while its 12-month returns are down by -21.51%. The stock closed at $46.17 per share on July 13, 2022.

Here is what Diamond Hill Large Cap Fund has to say about KKR & Co. Inc. (NYSE:KKR) in its Q1 2022 investor letter:

With KKR, investors seemed concerned about the elevated valuations and leverage in private markets, especially during times of equity market volatility. In addition, while KKR’s recent quarterly results were solid, the company’s assets under management (AUM) growth was modest, and earnings were partially driven by the one-time sale of Origis Energy. In our view, the current share price implies flat AUM growth going forward, which we believe is too pessimistic. We continue to believe KKR is well-positioned to benefit from institutional investors increasing allocations to private markets and concentrating capital with managers who have strong brands and performance.”

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 -16.43% return in the past 3 months.

In June 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.