KKR & Co. Inc. (KKR), Top Contributor of Ariel Investments’ Returns

Ariel Investments, a minority-owned investment company that focuses in small and mid-capitalized US based stocks, published its third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A positive return of 4.56% was recorded by the fund for the 3rd Quarter of 2020, ahead of its Russell 2500 Value benchmark that returned 3.54%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.

Ariel Investments in their Q3 2020 Investor Letter said that they were able to distinguish a value in  KKR & Co. Inc. (NYSE: KKR) and that it was a top contributor for the fund’s gains. KKR & Co. Inc. is a multinational investment company that currently has a $23.325 billion market cap. For the past 3 months, KKR delivered a 10.49% return and settled at $40.98 per share at the closing of January 14th.

Here is what Ariel Investments has to say about KKR in their investor letter:

“Alternative asset manager, KKR & Co. Inc. (NYSE: KKR) was the top contributor to performance over the trailing twelve months. KKR possesses the size and organizational structure to benefit not only from the continued high level of institutional interest in alternative assets, but also from attractive corporate valuations in certain industries and geographies in the midst of historically low interest rates. KKR retains an extensive track record of strong performance across all types of economic and financial conditions and, in our view, should continue generating alpha for its clients post the Covid crisis. Additionally, the company has a record of uncalled commitments and stands ready to take advantage of attractive valuations as it shops for future years of returns.”

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Last December 2020, we published an article telling that KKR & Co. Inc. (NYSE: KKR) was in 50 hedge funds’ portfolio, almost making it to its all time high statistics of 56. BKKR & Co. Inc. proved its worth by delivering a 34.32% return for the past 12 months.

As of September 2020, Ariel Investments had a 3.5 million share position in KKR that amounted to $122 million. This made Ariel Investments as the top 6 hedge fund that holds most of KKR’s stake, just behind Alkeon Capital Management with $186 million worth of KKR shares, and Egerton Capital Limited with $265.9 million. However, our calculations showed that KKR & Co. Inc. (NYSE: KKR) does not belong to the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.