Overview
Kohlberg Kravis Roberts & Co. L.P. (“KKR”) is a Delaware limited partnership and is registered as an investment adviser with the U.S. Securities and Exchange Commission (the “SEC”). KKR has approximately $119.6 billion1 in assets under management as of December 31, 2019. Today, through its offices across North America, Europe, the Middle East, Asia and Australia, KKR advises and sub-advises private equity funds and other investment vehicles that invest capital for long-term appreciation, primarily either through controlling ownership of companies or minority positions. Such funds also make investments in publicly traded equity and debt securities and other marketable securities and instruments (collectively with any investments in derivative instruments, “Marketable Securities”). In addition to its traditional private equity strategy, KKR advises funds and other investment vehicles focused on infrastructure, energy and real estate, which invest capital primarily through acquiring interests in companies or acquiring underlying assets. KKR also advises investment funds and other investment vehicles that make growth capital and core investments. KKR also advises vehicles that make real estate debt investments, including real estate investment trusts (“REITs”). KKR also offers and sponsors funds and other investment vehicles that make co-investments alongside KKR proprietary investments or in specific or multiple portfolio companies and other assets invested in by investment funds advised by KKR and its affiliates, a customized platform that invests in funds advised by KKR and its affiliates and funds sponsored and managed by unaffiliated investment managers (collectively, “third party funds”) and related co-investments, strategic partnership vehicles or other multi-strategy or multi-asset arrangements that invest across multiple funds and investment strategies advised by KKR and its affiliates, and multiple non-U.S. listed investment trusts or similar entities that invest in or have investment exposure to funds and investments managed by KKR and its affiliates. KKR’s Global Institute (“KGI”) periodically publishes papers, highlighting views from KKR’s portfolio companies and portfolio managers and political, economic and social trends. KKR’s Global Macro and Asset Allocation Group also periodically publishes commentary on macro-economic trends and related topics through KGI and oversees a proprietary portfolio of investments in a variety of instruments and securities.

KKR is affiliated with KKR Credit Advisors (US) LLC, an investment adviser that is separately registered with the SEC, together with its relying advisers, other affiliated entities and participating affiliates, collectively (“KKR Credit”). Use of the term “KKR Credit” throughout this brochure collectively includes KKR Credit Advisors (US) LLC, KKR Credit Advisors (Ireland) Unlimited Company (“KKR Credit Advisors (Ireland)”), KKR Credit Advisors (EMEA) LLP and their respective wholly-owned and controlled management entities through which investment management, advisory, administrative, operational and other services are provided to their clients. KKR Credit advises pooled investment vehicles, separately managed account vehicles, collateralized loan obligation vehicles (“CLOs”), a closed-end investment company registered under the United States Investment Company Act of 1940, as amended (the “Investment Company Act”), discretionary accounts established for third-party institutional investors, and certain investment funds and investment vehicles established and advised by KKR. KKR Credit’s investment management and advisory activities focus on U.S. and European leveraged credit strategies, such as leveraged loan and high yield bond strategies, alternative credit strategies (including investments in mezzanine and mezzanine-like instruments, structured and illiquid credit, and direct senior loan origination), specific types of syndicated credit investments (i.e., investments in revolver credit facilities), special situations investments and credit investments relating to other assets held by funds and other investment vehicles and accounts advised by KKR, including private equity and real assets, such as infrastructure, energy and real estate. KKR Credit Advisors (Ireland) and its affiliates provide discretionary 1 Represents KKR’s most recently published AUM as disclosed in Part 1. AUM calculations differ from those used in other regulatory filings by KKR in accordance with applicable requirements and guidelines. investment management services to a number of pooled investment vehicles, separately managed accounts and CLOs pursuing primarily European credit strategies, including investments in European leveraged loans and high yield bonds, alternative credit opportunities, such as investments in mezzanine and mezzanine-like instruments, originated senior loans and specific types of syndicated credit investments (i.e., investments in revolver credit facilities) and other structured and illiquid credit investments. On April 9, 2018, KKR Credit and an affiliate of Franklin Square Holdings, L.P. (“FS Investments”) combined their respective private credit business development company (“BDC”)2 platforms through FS/KKR Advisor, LLC (“FS/KKR Advisor”), which registered as an investment adviser with the SEC on April 2, 2018. FS/KKR Advisor provides investment advisory services to BDCs previously advised and sub-advised by KKR Credit, and BDCs previously advised by FS Investments. KKR Credit owns a 50% interest in FS/KKR Advisor.

KKR is affiliated with KKR & Co. Inc. (formerly KKR & Co. L.P.) (“KKR & Co.” or the “Public Company”), which, through its subsidiaries, acquires stakes in, seeds, or otherwise holds interests in third- party hedge fund and fund of funds managers (“Stakes and Seed Managers”).

KKR is affiliated with KKR Alternative Investment Management Unlimited Company (“KKR AIM”), which is regulated by the Central Bank of Ireland (“CBI”), is an authorized European Union (“EU”) alternative investment manager, and separately files reports as an exempt reporting adviser with the SEC. KKR AIM enters into delegation and/or sub-advisory agreements with KKR under which KKR will provide certain portfolio management services to KKR AIM in connection with investment funds with respect to which KKR AIM serves as alternative investment manager for the purposes of the EU Alternative Investment Fund Managers Directive (the “AIFMD”).

KKR also has an affiliated capital markets business operated through affiliated broker-dealers. Please see Item 10 – “Other Financial Industry Activities and Affiliations” for additional information regarding KKR’s affiliated broker-dealers.

KKR also has a proprietary investment business. Please see Item 11 – “Code of Ethics, Participation or Interest in Client Transactions and Personal Trading” for additional information regarding KKR’s proprietary investment activities.

With limited exceptions in connection with its customized platform investing in KKR funds and third party funds and related co-investments and certain sub-advisory relationships, KKR does not manage client assets on a non-discretionary basis as of December 31, 2019, although certain clients have consent or opt-out rights with respect to certain investments.
Ownership/Structure
Kohlberg Kravis Roberts & Co. L.P. is a subsidiary of KKR Group Partnership L.P. (“KKR Group Partnership”) and an indirect subsidiary of the Public Company, which is listed on the New York Stock Exchange (“NYSE”). On January 1, 2020, the Public Company and its subsidiaries completed an internal reorganization (the “Reorganization”) following KKR’s conversion from a Delaware limited partnership to a Delaware corporation on July 1, 2018. In the Reorganization, KKR Management Holdings L.P. (the former general partner of Kohlberg Kravis Roberts & Co. L.P.) and KKR International Holdings L.P., which were former intermediate holding companies for the Public Company’s business, were combined with the other intermediate holding company, KKR Fund Holdings L.P., which changed its name to KKR Group Partnership L.P. KKR Management LLP (formerly KKR Management LLC) remains the sole holder 2 Investment companies that have each filed an election to be treated as a business development company under the Investment Company Act. of Class B common stock of the Public Company, which is the class of common stock entitled to vote for the election of directors and other matters generally. KKR Holdings L.P. (“KKR Holdings”) holds Class C common stock of the Public Company (as well as the ownership interests described below). Holders of the common and preferred stock of the Public Company (which includes KKR affiliates, employees and their related persons, as well as public investors) hold 100% of the ownership interests in the Public Company. As of January 1, 2020, the Public Company indirectly held approximately 66% of the ownership interests in KKR Group Partnership, which holds the operating businesses of the Public Company’s subsidiaries. As of January 1, 2020, the remaining ownership interests in KKR Group Partnership were held indirectly by KKR Holdings and KKR Associates Holdings L.P. (“KKR Associates Holdings”). KKR Holdings and KKR Associates Holdings are owned by certain KKR senior employees and their related persons.
Nature of KKR’s Clients
KKR generally provides investment management, advisory and administrative services to affiliated general partners of investment funds and other investment vehicles sponsored and managed by KKR (“KKR GPs”) and/or KKR AIM. These funds and vehicles are typically U.S. and non-U.S. limited partnerships and other investment vehicles that are not registered or required to be registered under the Investment Company Act or the United States Securities Act of 1933, as amended (the “Securities Act”), and are privately placed to qualified investors in the United States and elsewhere or are established as dedicated investment vehicles and/or strategic partnership arrangements for certain institutional investors. In addition, affiliates of KKR manage multiple non-U.S. listed investment trusts or similar vehicles which provide certain non-U.S. investors with access to funds and investments managed by KKR and KKR Credit. KKR also provides investment advice directly to institutional clients through managed account arrangements. Investment funds and specific vehicles established for a single investor and other vehicles to which KKR provides continuous and regular investment management, advisory and administrative services are referred to throughout this brochure as “KKR Funds.” Institutional investors or investment vehicles (such as a REIT), to which KKR provides services directly through a contractual relationship, such as an investment management agreement, are referred to throughout this brochure as “Other Clients.” KKR also through affiliated general partners provides certain administrative services to co-investment vehicles that are not advisory clients of KKR, such as syndicated capital co-investment vehicles and syndication side cars, as described in Item 11 – “Allocations of Investment Opportunities,” through which third-party investors co-invest alongside KKR Funds and Other Clients.

KKR does not participate as a manager in any wrap fee programs.
KKR’s Investment Mandates
The terms upon which KKR or its affiliates serve as investment manager or advisor of a KKR Fund or Other Client are determined at the time each KKR Fund or Other Client relationship is established and are generally set out in separate management agreements with the relevant KKR Fund or Other Client and the governing documents of the relevant KKR Fund or Other Client. These terms, which vary as among each KKR Fund and Other Client, include restrictions or limitations on the types of securities and other assets in which a KKR Fund or Other Client can invest, the amount of assets that can be invested in any portfolio company or industry or fund, the geographies in which a KKR Fund or Other Client can invest and the use of leverage, among others. please register to get more info

General
KKR (including the KKR GPs) generally receives management fees, carried interest allocations and/or performance fees in connection with the investment management and administrative services KKR provides to KKR Funds and Other Clients. Certain co-investment vehicles and KKR Associates Vehicles, as defined in Item 6 – “Carried Interest Allocations and Side-By-Side Management,” are not subject to such fees and/or carried interest allocations. The allocation of a portion of the profits of a KKR Fund, whether allocated to the capital account of a KKR GP or distributed to a KKR GP, is referred to herein as “carried interest.”

Management fees, carried interest allocations and other compensation payable to KKR (including the KKR GPs) by KKR Funds or Other Clients together with other terms governing the management of KKR Funds or Other Clients by KKR, are established by KKR at the time of the establishment of the relevant KKR Funds (and negotiated with participating investors prior to their investment) or at the beginning of the management relationship with the relevant Other Clients, as applicable. Specific details of such compensation and its method of calculation are set out in the offering materials, disclosure documents, management agreements and/or governing documents of the relevant KKR Funds or Other Clients and vary between KKR Funds or Other Clients. Subject to such governing documents, fee terms of KKR Funds or Other Clients have been and will generally be changed during the term of the relevant relationship. The share of compensation earned by KKR or its affiliates in respect of a KKR Fund varies among investors in such KKR Fund pursuant to the terms of the governing documents, side letter agreements or other arrangements with specific investors in such KKR Fund whereby such investors receive direct or indirect reductions of management fees or other compensation otherwise payable with respect to their investments managed by KKR. For example, each of KKR and KKR Credit has entered into, and intends in the future to enter into, strategic partnerships or other multi-strategy or multi-asset class arrangements with investors that commit capital to a range of KKR’s and KKR Credit’s platform of products, investment ideas and asset classes. Such arrangements generally (subject to applicable terms) include KKR or KKR Credit granting certain preferential terms to such investors, including blended fee and carried interest rates that are lower than those applicable to other investors in a KKR Fund or KKR Credit Fund (as defined in Item 10), as applicable, when applied to the entire strategic partnership. Where a strategic investor participates in a KKR Fund or KKR Credit Fund through a dedicated investment vehicle or account as part of such arrangement, such investment vehicle or account will generally (subject to applicable terms) be granted terms, including management fees or carried interest, that are more favorable than those applicable to other investors. In cases where a strategic investor’s management fees and carried interest are due at the level of such vehicle and account, such terms will generally (subject to applicable terms) include a waiver of management fees and carried interest on such strategic investor’s investment in KKR Funds or KKR Credit Funds. In addition, where a strategic investor enters into such an arrangement with KKR or KKR Credit, other investors in KKR Funds will not be notified or receive documentation of such an arrangement. Please see Item 11 – “Other Conflicts of Interest – Strategic Partnerships and Other Arrangements” for further information regarding strategic partnerships. In addition, KKR enters into arrangements with one or more third parties to establish dedicated feeder vehicles to facilitate the indirect participation in a KKR Fund by certain high net worth investors and other qualified clients of such sponsor (each, a “Dedicated Feeder”). Such third parties are expected to also solicit a direct investment in a KKR Fund by certain of its clients in consideration for the payment of a placement fee from KKR or such KKR Fund (each, a “Placed Investor”). In connection with the admission of any Dedicated Feeder to a KKR Fund, the applicable KKR GP will determine, in its discretion, whether to aggregate the indirect capital commitments of the investors in such Dedicated Feeder, including, without limitation, for purposes of calculating any management fee discount to which such Dedicated Feeder is entitled. In connection with the foregoing, there have been and are expected to be circumstances in which discounts, if any, are provided on an aggregated basis with respect to some, but not all, Dedicated Feeders, which would have the effect of establishing more favorable economic terms with respect to such Dedicated Feeders as compared to those applicable to other comparably sized Dedicated Feeders. Further, discounts in management fees generally do not apply to Placed Investors but will be granted to Placed Investors in KKR’s sole discretion. Certain third party sponsors receive placement fees, finder’s fees, manager charges or other payments which comprise organizational expenses related to the relevant Dedicated Feeders and which in turn will reduce management fees with respect to such Dedicated Feeders. KKR does not control the economic terms of such Dedicated Feeders, which are established independently by the relevant third parties and their underlying investors. In certain circumstances, such terms require the relevant third parties to use such payments in whole or in part to offset incremental fees and expenses applicable at the level of the relevant Dedicated Feeders or to otherwise pass on such amounts to the benefit of the Dedicated Feeders and their investors. Management Fees Management fees compensate KKR for the various services KKR’s business professionals provide in managing KKR Funds or Other Clients (such as building a diversified portfolio of investments). KKR receives periodic management fees from KKR Funds or Other Clients of up to 2% of capital committed to, the net asset value of, or the remaining invested capital of, the relevant KKR Fund or Other Client, depending, in particular, on the strategy of the relevant KKR Fund or Other Client, the amount of assets being placed under management with KKR and the point in time in the life cycle of the relevant KKR Fund or Other Client account. For example, for certain KKR Funds, investors in the same fund pay different management fees based on whether they invested in an early or later round of fundraising and the amount of their investment, with earlier or larger investors frequently paying lower management fees than other investors. Management fees are typically paid quarterly, and fees will typically step down to a lower rate as a percentage of invested capital after a KKR Fund’s or Other Client’s investment period has concluded. KKR will from time to time accrue management fees for a given payment period but defer collecting such fees until a later payment period primarily for administrative purposes. KKR generally does not charge interest on such deferred management fees. The KKR GPs generally make capital calls on investors in KKR Funds for the amount of management fees payable by the KKR Funds to KKR and then cause the KKR Funds to pay the amounts received from the investors to KKR, consistent with the governing documents of the KKR Funds. KKR generally invoices Other Clients for management fees. In some cases, management fees due to KKR are deducted from proceeds otherwise distributable to investors in a KKR Fund or Other Client, but only if consistent with the governing documents of such KKR Fund or Other Client. If a KKR Fund obtains a subscription facility, management fees due from such KKR Fund are also paid by drawdowns by KKR (or relevant KKR GP) under such KKR Fund’s subscription credit facility (which drawdowns are subsequently repaid through capital calls or investment proceeds).

Where management fees are paid in advance with respect to a KKR Fund or Other Client, the terms applicable to the relevant KKR Fund or Other Client, typically do not contemplate repayments of fees to the extent that KKR’s services terminate prior to the end of the relevant payment period. Where management fees are based on committed capital or the remaining invested capital of a KKR Fund, the management fee payable by such KKR Fund will be due to KKR even if the fair value of the relevant remaining investments is below cost. Management fees payable to KKR by certain KKR Funds are also reduced by certain other compensation received by KKR or its affiliates that relate to the relevant KKR Fund and its activities or by certain organizational, offering and other expenses borne by the KKR Fund.
Carried Interest Allocations
KKR GPs also generally receive carried interest allocations from KKR Funds (other than KKR Associates Vehicles) of up to 20% of profits third-party investors earn on their investments in KKR Funds. Carried interest allocations are generally subject to preferred return hurdles, catch-up allocations, and/or KKR GP clawbacks, depending, among other things, on the strategy and structure of the relevant KKR Fund. KKR GPs typically receive carried interest allocations on a deal by deal basis for profitable portfolio company investments. Profitable investments realized early in the life of a KKR Fund could be followed by the poor performance of investments realized later in the life of a KKR Fund, which would reduce the KKR Fund’s overall profitability or cause it to be unprofitable. If this were to result over the life of a KKR Fund in KKR having received through a KKR GP, more than the agreed-upon percentage of the relevant KKR Fund’s total profit, or the hurdle performance rate required by the KKR Fund’s terms not being met, the KKR GP will typically be required to reimburse (i.e., have clawed back) all or an appropriate portion of the carried interest allocations received by it, net of taxes, to ensure that KKR through such KKR GP does not receive a greater share of profits than agreed upon under the governing documents of such KKR Fund.
Portfolio Company-Related Fees

In addition to management fees for operating KKR Funds and Other Clients, KKR receives fees for work on the development and execution of core strategies for portfolio companies and for projects to increase portfolio company value. These fees are often borne by (i) a specific portfolio company, (ii) holding companies or other vehicles through which certain, but not all, of the direct and indirect equity owners of the portfolio company invest or (iii) a specific KKR Fund or Other Client and can be broken down generally into two categories: shared fees and non-shared fees (see discussion below). When such fees are borne by holding companies or other vehicles or by a specific KKR Fund or Other Client, such KKR Fund or Other Client will bear a greater portion of such fees than would be the case if the relevant portfolio company paid such fees as the investors in the holding company (or KKR Funds or Other Client) will bear the cost of such fees. In addition, if a portfolio company is unable to pay or declines to pay for certain services (including services rendered by Consultants (as defined below) or Affiliated Brokers), then the relevant KKR Fund or Other Client, as applicable, will be charged for such services, which will also result in a greater portion of such fees being borne by such KKR Fund or Other Client than would otherwise have been the case.

A portion of the shared fees are generally offset against management fees payable by KKR Funds or Other Clients, while non-shared fees do not reduce management fees. The overall amount of shared fees will also be reduced by certain sourcing and diligence expenses incurred by KKR in pursuing unconsummated transactions for KKR Funds or Other Clients. Portfolio company-related fees are paid regardless of a KKR Fund’s or Other Client’s profitability and are not negotiated with investors in KKR Funds or Other Clients, and will often be capitalized as part of the acquisition price of the relevant investment for consummated investments. Shared Fees Shared fees are fees for KKR services which offset management fees paid by KKR Funds or Other Clients, and include transaction, monitoring, breakup, and directors’ fees. KKR and its affiliates charge monitoring fees and transaction fees to portfolio companies, in each case, which are not generally negotiated on an arm’s length basis. KKR Funds and Other Clients indirectly bear the cost of these fees. KKR or its affiliates receive monitoring fees in exchange for providing portfolio companies of KKR Funds with management, consulting, financial and other services. Monitoring fee agreements are typically renewed automatically on an annual basis and typically include annual fee increases. A portfolio company’s EBITDA (earnings before income, taxes, depreciation, and amortization) is generally taken into account in determining the amount of applicable monitoring fees. Monitoring fees are frequently based on a percentage of EBITDA or a specific dollar amount. On the occurrence of initial public offerings, sales or other change of control events related to the relevant company, KKR (or an affiliate) is typically entitled to all unpaid monitoring fees plus any unreimbursed expenses plus the net present value of future monitoring fees that would otherwise be payable by the relevant portfolio company (the “NPV Payment”). The NPV Payment is based on the net present value of the monitoring fees payable over a future fixed period calculated using discount rates equal to the yield on U.S. Treasury securities of like maturity based on the dates fee payments would have been due. The fixed period of time used in the net present value calculation will typically be tied to the term of the relevant KKR Fund or portfolio investment or in more recent agreements, a period within that term; however, in certain instances the calculation period has exceeded the relevant KKR Fund’s (or investment’s) term. Under more recent monitoring fee agreements for portfolio companies of KKR Funds and Other Clients, the fixed period of time used in the NPV Payment calculation described above will be the lesser of (i) the remaining term of the relevant monitoring agreement (the term for each monitoring agreement generally will be fixed as the end of the last year of a KKR Fund’s term) and (ii) three-and-a-half-years from the date of termination of the monitoring agreement. An NPV Payment will generally only be taken where KKR (or one or more of its affiliates) expects to continue to provide ongoing services and advice to the portfolio company after there has been an initial public offering, sale or other change of control event. As such, an NPV payment will generally only be taken if (i) the relevant KKR Fund, Other Clients, co-investment vehicles and KKR proprietary entities retain (directly or indirectly) 10% or more of the stock or other equity interests in the portfolio company (or the surviving entity) immediately following the relevant event and (ii) a KKR or co-investor employee or designee serves or is expected to serve as a member of, or observer at, the board of directors or similar governing body of the portfolio company (or the surviving entity) (or in the absence of such service or expected service, KKR or its affiliates retain the right to appoint or nominate such a director or observer) immediately following the relevant event. The contractual provisions described above and the KKR policy governing calculation of NPV Payments are amended from time to time, in KKR’s sole discretion. KKR also receives transaction fees for the work performed by KKR in structuring investments in portfolio companies and with respect to significant transactions or exits for those portfolio companies or portfolio investments. Transaction fees are received in connection with the same portfolio company in which payments under a monitoring fee agreement are received. Transaction fees are calculated as a percentage of the total enterprise value, or as a percentage of the aggregate price paid for the securities that are acquired by a KKR Fund or Other Client. KKR or its affiliates also from time to time receive “breakup” or similar fees in connection with unconsummated, canceled, or terminated portfolio transactions. The agreements relating to the relevant transaction generally specify the amount and timing of such fees and such agreements generally contain conditions or limitations on such payment to KKR or its affiliates.

KKR periodically discloses to investors in certain KKR Funds (and Other Clients, if applicable) the amount of monitoring fees, transaction fees, and breakup fees allocated to KKR Funds and Other Clients in which they have invested. Monitoring fees (including NPV Payments) and transaction fees are generally allocated among KKR Funds, Other Clients, KKR Associates Vehicles (and other participating KKR proprietary entities and co-investment vehicles, if applicable) based on ownership of the relevant portfolio company or investment to which they are charged. The amount of breakup fees is generally allocated among KKR Funds, Other Clients, KKR Associates Vehicles (and other participating KKR proprietary entities and co- investment vehicles, if applicable) based on the anticipated ownership of the relevant company or investment had the transaction been consummated. If the expected equity source is not known for such deal, the waterfall methodology for allocating sourcing and diligence expenses for the strategy of such deal will generally be used to allocate the breakup fee. A portion of the monitoring fees, transaction fees, and breakup fees allocated to KKR Funds and Other Clients will generally reduce or offset management fees otherwise payable by investors in such KKR Funds and Other Clients as described in the offering materials, disclosure documents and/or governing documents of the relevant KKR Funds and Other Clients. The portion of allocable compensation that reduces or offsets management fees varies between KKR Funds and Other Clients. KKR will retain the portion of such compensation that is allocated to KKR Funds and Other Clients that does not reduce or offset management fees, as well as the allocated portion that is attributable to the relevant KKR GP. KKR retains such compensation to the extent it is allocable to KKR Associates Vehicles (except in the case of certain older KKR Funds), co-investment vehicles or KKR proprietary entities. Fees allocated to co-investment vehicles, KKR Associates Vehicles and KKR proprietary entities will not offset the management fees payable by KKR Funds or Other Clients.

In addition to the fees described above, certain officers and employees of KKR, including, unless otherwise specified, KKR Capstone executives (as defined below) (“Employees”), currently receive and are expected in the future to receive directors’ fees for serving on the boards of portfolio companies, holding vehicles and other entities in or through which KKR Funds (and Other Clients, if applicable) invest. For older KKR Funds, these directors’ fees are generally not offset against KKR Fund management fees and are permitted to be retained in whole or in part by the Employees. Generally, for KKR Funds and Other Clients established between 2010 and 2016, directors’ fees paid to Employees (including KKR Capstone executives) offset management fees. For newer KKR Funds (generally established in 2016 and later), directors’ fees paid to KKR Capstone executives are not subject to management fee offsets and are permitted to be retained in whole or in part by the KKR Capstone executives. In addition, from time to time, Employees will serve as interim executives of portfolio companies and other entities in or through which KKR Funds (and Other Clients) invest, and an Employee serving as an interim executive either would not receive additional compensation for his or her service or KKR would share any compensation received by such Employee (excluding KKR Capstone executives) with the relevant KKR Funds or Other Clients (i.e., via a management fee offset) in the same manner and extent as monitoring fees offset management fees for such KKR Funds and Other Clients. Management fees will not be reduced or offset to the extent any Employee receives directors’ fees relating to continued director service after a KKR Fund or Other Client has exited a portfolio company or other entity or if received by an Employee following the termination of such Employee’s employment with KKR.

Non-Shared Fees In addition to the shared fees described above, KKR and its affiliates, and RPM and other Consultants will also receive fees for services provided to portfolio companies. KKR Funds and Other Clients indirectly bear the cost of these fees. Such fees do not offset management fees due from KKR Funds or Other Clients. Examples of non-shared fees for services include fees for third-party replacement services (i.e., fees received by KKR’s Consultants and Affiliated Brokers that otherwise would have been provided by other consultants or broker dealers).

In addition, KKR and its affiliates will also from time to time enter into participation or other “back-to- back” arrangements with third parties that provide services and products directly to or with respect to KKR Funds and Other Clients and their portfolio companies, holding vehicles and other entities in or through which KKR Funds and Other Clients invest, and KKR will receive fees from the third party in connection with such activities. Under these arrangements, although neither KKR nor its affiliates will receive fees directly from KKR Funds, Other Clients or their portfolio companies, holding vehicles and other entities in or through which KKR Funds and Other Clients invest, KKR or its affiliates could be viewed as indirectly receiving such fees from a KKR Fund, Other Client or their portfolio companies or holding entities. Such fees do not offset management fees or carried interest distributions due from KKR Funds or Other Clients. KKR and its affiliates have an incentive to select third parties that are likely to engage KKR and its affiliates in such arrangements. Please see also Item 11 – “Financial Interest in KKR Fund, Portfolio Company or Other Client Transactions”.
KKR Capstone, RPM and Other Consultants
KKR Capstone Americas LLC (collectively with its related parties, “KKR Capstone”) provides consulting services to KKR, KKR Credit, KKR Funds, KKR Credit Funds, Other Clients and certain portfolio companies, holding companies and other entities (including non-controlled entities) in or through which KKR Funds, KKR Credit Funds, Other Clients and KKR invest. RPM Energy Management LLC (collectively with its related parties, “RPM”) provides operating and consulting services to KKR, KKR Credit, KKR Funds, KKR Credit Funds, Other Clients and certain portfolio companies and/or assets in the oil and gas industry.

KKR Capstone provides services to portfolio companies that KKR’s investment professionals do not otherwise provide, including, without limitation, replacement services.

KKR acquired KKR Capstone effective January 1, 2020 and KKR Capstone is owned and controlled by KKR. KKR Capstone operating executives (“KKR Capstone executives”) became employees of KKR after KKR’s acquisition.

KKR Capstone executives are expected to receive compensation in the form of (x) grants of equity in one or more of the parent entities of KKR (including equity awards from the Public Company, which has listed certain securities on the NYSE), (y) a portion of the carried interest distributions received by KKR GPs that are part of KKR’s “carry pool” and/or (z) a profits interest in individual portfolio companies or assets of KKR Funds or Other Clients. KKR Capstone executives could serve on the boards of directors of the portfolio companies of KKR Funds and Other Clients and in such cases will generally receive directors’ fees and other compensation (including in the form of fixed and incentive compensation) in connection therewith from such companies. They also serve from time to time as interim executives of portfolio companies and receive compensation in connection therewith. Such compensation received by KKR Capstone executives will generally not be shared with KKR Funds or Other Clients or offset against management fees or carried interest distributions payable by KKR Funds or Other Clients. RPM is owned by its senior management and is not a subsidiary or an affiliate of KKR. RPM has an exclusive relationship with KKR. RPM provides advisory services to portfolio companies that KKR’s investment professionals do not otherwise provide, including, without limitation, replacement services. While KKR and its affiliates do not hold any voting/decision making rights or equity interests in RPM (and certain other Consultants), RPM (and certain other Consultants) will generally provide services to KKR and at the direction of KKR and its affiliates to portfolio companies, holding vehicles and other entities (including non-controlled entities) in or through which KKR Funds and Other Clients invest or to KKR designees on an exclusive basis and also receive services and support from KKR and its affiliates, which are likely to be provided on favorable or below market rates. For example, KKR has in the past, presently does and is expected to in the future provide loans to RPM, which loans have (or would be expected to have) below market interest rates and no stated payment schedule, provide administrative services to RPM at below market rates, enter into arrangements with RPM that provide for below market rent and allow RPM to participate in KKR’s insurance policies and employee benefit plans without passing through the full cost of the coverage to RPM. RPM and/or employees of RPM are expected to receive in the future compensation in the form of (x) grants of equity in one or more of the parent entities of KKR (including equity awards from the Public Company, which has listed certain securities on the NYSE), (y) a portion of the carried interest distributions received by KKR GPs that are part of KKR’s “carry pool” and/or (z) a profits interest in individual portfolio companies or assets of KKR Funds or Other Clients. Any such compensation received by RPM will not be shared with KKR Funds or Other Clients or offset against management fees or carried interest distributions payable by KKR Funds or Other Clients. Similar benefits could be afforded to other Consultants (as defined below) engaged in respect of KKR Funds or Other Clients or their strategies, portfolio companies or assets. KKR engages persons to provide various consulting services to KKR Funds and Other Clients (“Consultants”) including and in addition to KKR Capstone and RPM, including, without limitation, for sourcing, operational consulting, industry consulting, asset level consulting and operating services, debt servicing, engineering services, construction management, leasing management, development management, environmental compliance and remediation, purchasing and other property management services in the real estate sector, assistance in ensuring that that the consideration of environmental, social, governance and sustainabilty issues are integrated into investment decisions, and general and administrative services, on terms substantially similar to those described with respect to KKR Capstone and RPM. KKR Capstone, RPM and other Consultants are often involved in due diligence in connection with KKR’s investment sourcing. KKR engages and expects in the future to engage particular Consultants for multiple projects related to existing portfolio companies or potential investment opportunities. Consultants have included and could in the future include former employees of KKR or its affiliates. Generally, KKR Capstone, RPM and certain other Consultants have master consulting agreements in place with KKR for due diligence work and other projects (including non-implementation advisory or scoping work to identify and evaluate the potential for consulting or similar arrangements with existing portfolio companies and related operational changes and improvements) contracted by KKR on behalf of KKR Funds and Other Clients and they from time to time enter into engagement letters with KKR Fund portfolio companies, holding companies and other entities (including non-controlled entities) for consulting services provided to such entities. Under those agreements and engagement letters, KKR Capstone, RPM and other Consultants are generally entitled to fees, other compensation and expense reimbursement (and, outside of the U.S., expenses can be determined as a fixed percentage of KKR Capstone’s fee for a specific engagement). Compensation for KKR Capstone (and other Consultants) will from time to time include success fees (in the form of cash or equity) based on pre-agreed targets or milestones. While such fees and reimbursable expenses and other compensation paid to KKR Capstone and RPM are believed by KKR to be reasonable and generally at market rates for the relevant activities, such compensation is not negotiated at arm’s length and from time to time might be in excess of fees, reimbursable expenses or other compensation that would be charged by comparable third parties. Other companies provide similar services as KKR Capstone, RPM and other Consultants, but KKR believes they are less customized to the business of KKR Funds and Other Clients.

Fees and compensation received by KKR Capstone, RPM and other Consultants are generally not shared with KKR Funds or Other Clients or offset against management fees payable by KKR Funds or Other Clients. Moreover, under the terms of more recent KKR Funds and Other Clients, fees received by KKR Capstone, RPM or any other Consultant would not be shared with KKR Funds or Other Clients or offset against management fees payable by KKR Funds or Other Clients in the event that KKR Capstone or RPM were to become a subsidiary or an affiliate of KKR. As noted above, KKR acquired KKR Capstone on January 1, 2020. With respect to operating partners, KKR will generally retain such operating partners on an ongoing basis through a consulting or joint venture arrangement involving the payment of annual retainer fees. Further, such operating partners will typically receive success fees, performance-based compensation and/or other compensation for assistance provided by such operators in sourcing and diligencing investments for a KKR Fund or Other Client. Such annual retainer fees, success fees, performance-based compensation and other costs of retaining such operating partners would ordinarily be borne directly by a KKR Fund or Other Client as fund expenses. To the extent that an operating partner is providing services on an exclusive basis to KKR, or a KKR Fund or Other Client acquires an interest in such operating partner, members of such operating partner will not be treated as affiliates of KKR for purposes of the governing documents of the KKR Fund or Other Client. Accordingly, none of the compensation or expenses described above will be offset against any management fees or carried interest distributions payable to KKR or its affiliates in respect of such KKR Fund or Other Client. Such operating partners (including operating partners in which a KKR Fund or Other Client owns an interest) operate assets on behalf of a KKR Fund or Other Client as well as other KKR investment vehicles and will also in certain cases operate assets for third parties, which are generally expected to be similar to prevailing rates for such services, although the rates for such services often do not have readily available benchmarks for comparison. For further information, please see also “Platforms, Joint Ventures and Other Portfolio Asset Arrangements” below and in Item 8 - “Operating Partners and Joint Venture Partners.”
Affiliated Brokers
Affiliated U.S. and non-U.S. broker-dealers of KKR (including their respective related lending vehicles) (or “Affiliated Brokers” as defined in Item 10) manage or otherwise participate in underwriting syndicates and/or selling groups with respect to the securities and debt instruments of portfolio companies and other non-controlled entities in or through which certain KKR Funds or Other Clients invest, including in respect of securities or other instruments of such portfolio companies in which KKR Funds or Other Clients have not invested. Affiliated Brokers also manage or otherwise participate in underwriting syndicates and/or selling groups with respect to securities and other instruments held directly or indirectly by certain co- investment vehicles.

Further, Affiliated Brokers are otherwise involved in the public offering or private placement of such securities and other instruments, and/or the provision of capital markets advisory services to portfolio companies and other controlled or non-controlled entities in or through which KKR Funds or Other Clients invest, including in connection with mergers, acquisitions and restructurings; and will alone, or with other counterparties, which might include other KKR investment vehicles, third party banks or other unaffiliated finance providers, provide acquisition financing, lines of credit, bridge financing, hedging and other corporate lending or financing products and services to such entities in addition to financing provided through a KKR Fund or Other Client’s investment. Affiliated Brokers also provide loans and lines of credit or bridge financing to KKR Fund’s and Other Client’s portfolio companies through the Affiliated Brokers’ respective related lending vehicles. In addition, Affiliated Brokers alone or with other lenders (including other KKR entities), arrange lines of credit to portfolio companies and other non-controlled entities in or through which KKR Funds, Other Clients and other third party borrowers invest. Such financing and underwriting services could also be provided to a third party in which a KKR Fund or Other Client (or portfolio company) invests. Affiliated Brokers also provide syndication services to such entities including in respect of co-investments in transactions participated in by KKR Funds or Other Clients. Affiliated Brokers will generally receive fees, including underwriting, placement, syndication fees, transaction fees, commissions, underwriting discounts, interest payments and other compensation, payable in cash or securities, in respect of the activities described above. Affiliated Brokers from time to time waive such fees. Affiliated Brokers and other KKR entities will, as a consequence of such activities, from time to time hold positions in instruments or securities issued by portfolio companies. While such fees, commissions, interest payments and other compensation are believed by KKR to be reasonable and charged at market rates for the relevant activities, such compensation is generally determined through negotiations with related parties. No compensation received by Affiliated Brokers for the foregoing activities is offset against management fees or otherwise shared with KKR Funds or Other Clients. Affiliated Brokers do not share in any transaction or monitoring fees earned by KKR, which are generally allocated among KKR Funds, Other Clients and KKR Associates Vehicles as discussed above. Please see Item 10 – “Other Financial Industry Activities and Affiliations” for further information regarding Affiliated Brokers.
Platforms, Joint Ventures and Other Portfolio Asset Arrangements
Certain KKR Funds or Other Clients form, enter into or invest in investment platforms, joint ventures, build-ups and other arrangements with third parties or KKR or its affiliates with respect to specified portfolio investments or categories of portfolio investments. In particular, such KKR Funds or Other Clients invest in opportunities through joint ventures, investment platforms or build-ups that provide one or more of the following services: origination or sourcing of potential investment opportunities, due diligence and negotiation of potential investment opportunities and/or servicing, development and management (including turnaround) and disposition of investments. Such investments in joint ventures, platforms and build-ups are made in or alongside existing or newly formed operators, consultants and/or managers (collectively, “Platform Managers”) that pursue such opportunities. Platform Managers have been established or otherwise invested in by KKR proprietary entities and could therefore be deemed to constitute affiliates of KKR or otherwise represent proprietary interests of KKR. As set forth in the governing documents for such KKR Funds, fees paid to such Platform Managers will not reduce management fees or other fees or carried interest distributions payable to KKR or its affiliates in respect of such KKR Funds. KKR Funds or Other Clients also invest in or own Platform Managers which involve joint ownership with KKR proprietary entities and/or third-party investors. Similarly, such joint ventures, platforms and build- ups include capital and/or assets contributed by KKR proprietary entities, KKR Funds or Other Clients and/or Platform Managers and/or third-party investors (such joint ventures and investments in platforms and build-ups, collectively, “Platform Arrangements”). KKR maintains policies and procedures to provide guidance to its investment professionals regarding the types of investments in Platform Arrangements and Platform Managers that are within the relevant investment strategies of KKR Funds and Other Clients.

Platform Arrangements also include certain investment vehicles that, directly or indirectly, hold or otherwise participate in aircraft, ships or other hard assets or other financial assets or related financing arrangements (“Portfolio Asset Vehicles”) managed in whole or in part by joint venture partners or third party asset administrators, servicers or other persons (collectively, “Asset Servicers”) or otherwise pursuant to arrangements with such Asset Servicers. Asset Servicers are entitled to fees and other expense reimbursements for sourcing such portfolio investments, success fees or carried interest distributions in respect of such portfolio investments and/or other compensation tied to the success of such portfolio investments and/or servicing fees and expense reimbursements for assistance with due diligence of such assets, negotiation of financing relating to asset acquisitions, administration and other services provided in respect of the relevant assets (including in particular asset leasing services provided in respect of hard assets held through such vehicles) (collectively, “Asset Servicing Fees”). KKR determines such compensation is appropriate where KKR believes such Asset Servicers have particular expertise, capability or knowledge with respect to the relevant category of assets, they have sourced such assets, or for regulatory reasons, in order to assist KKR in building relationships that KKR believes will be beneficial to a KKR Fund or Other Client and/or that will create opportunities for future investments or otherwise optimize returns for such KKR Fund or Other Client. Certain Asset Servicers have been established or otherwise invested in by KKR proprietary entities and could therefore be deemed to constitute affiliates of KKR or otherwise represent proprietary interests of KKR. For example, affiliates of KKR have made a proprietary investment into a joint venture partnership with a commercial aviation finance company which will provide services in respect of investment opportunities by certain KKR Funds and Other Clients related to asset leasing arrangements for commercial aircraft, including assistance with sourcing of leasing opportunities and negotiating financing related to such opportunities, as well as repurposing and maintenance services. In connection with Platform Arrangements, personnel of platform companies, joint venture companies, partners or Platform Managers or other persons, including personnel of Platform Managers affiliated with KKR, or of other entities formed by KKR or its affiliates to provide services to vehicles in which a KKR Fund or Other Client holds an investment, receive management fees or other fees (including, without limitation, consulting, servicing and/or origination fees), performance-based payments (including, without limitation, carried interest, incentive fees and/or transaction fees), equity (including, without limitation, options, warrants and restricted stock) and/or other compensation (including, without limitation, salaries, bonus, benefits and/or reimbursement of expenses) from Platform Managers or other vehicles which manage or advise such Platform Arrangements or through which such Platform Arrangements invest or conduct their business. Certain Platform Managers provide services exclusively to one or more Platform Arrangements. KKR Funds or Other Clients will generally bear the expenses of the Platform Arrangements and Platform Managers, such as formation costs, ongoing general or administrative costs (including compensation of related personnel, rent and other overhead), due diligence expenses, working capital costs and other related expenses in connection with backing the Platform Arrangements and Platform Managers. Such expenses are borne directly by relevant KKR Funds or Other Clients (or as sourcing and diligence expenses, if applicable) or indirectly as KKR Funds or Other Clients fund the startup and ongoing expenses of a newly formed portfolio company. Although platforms or build-up portfolio entities are controlled by a KKR Fund or Other Client, the compensation or expenses described above are not expected to be offset against any management or other fees or carried interest distributions payable to KKR or its affiliates in respect of such KKR Fund or Other Client.

The services provided by Platform Managers in respect of such Platform Arrangements will in certain cases be similar to and overlap with services provided by KKR to KKR Funds or Other Clients and a Platform Manager also has and could provide the same or similar services for assets owned by third parties, which could compete with KKR Funds or Other Clients for investment opportunities. Multiple KKR Funds or Other Clients could invest in the same Platform Arrangements. KKR Funds or Other Clients realize investments held through Platform Arrangements (in whole or in part) through a sale of all or a portion of such Platform Arrangements or a disposition of assets held through such Platform Arrangements (including a payoff of any loans held through such Platform Arrangements), including to one or more KKR Funds, Other Clients or third parties.

Certain Platform Managers and Asset Servicers include former KKR personnel, Senior Advisors or Industry Advisors (each as defined below), KKR Capstone executives or RPM executives, and such individuals are generally permitted to also provide the same or similar services with respect to other Platform Arrangements or Portfolio Asset Vehicles of a KKR Fund or Other Client. In certain instances, KKR will have little influence over certain unaffiliated Platform Managers and Asset Servicers invested in by a KKR Fund or Other Client, and there is no assurance that these investments will benefit such KKR Fund or Other Client, either economically or by achieving access to attractive future investment opportunities. Any compensation paid to Platform Managers or Asset Servicers, including Platform Managers and Asset Servicers that are KKR affiliates and including personnel that are former KKR personnel, Senior Advisors, Industry Advisors, KKR Capstone executives or RPM executives, will increase the costs of and reduce the KKR Fund’s or Other Client’s returns from the relevant portfolio investments and will not offset carried interest or management fees or any other compensation paid by the KKR Fund or Other Client to the KKR GP. Please see the “Expenses” and “Other” sections below and “Operating Partners and Joint Venture Partners” in Item 8 for further information regarding the payment of fees, other compensation, and expense reimbursement to KKR Capstone, RPM, and other Consultants.
Loan Servicing and Administrative Services
Affiliates of KKR also engage in loan servicing and other administrative services provided to borrowers, loan syndicates and similar arrangements. One or more of such KKR affiliates are generally entitled to provide these services to portfolio companies of KKR Funds and Other Clients and/or to lenders to such portfolio companies and receives or will receive fees in connection with such services. Generally, any such loan servicing or administration or similar fees received by KKR or its affiliates from or with respect to a KKR Fund’s or Other Client’s portfolio companies will not be shared with the KKR Fund or Other Client or offset against management fees or carried interest distributions payable by such KKR Fund or Other Client. KKR and its affiliates could also receive payments for local administration or management services related to portfolio companies or investments of KKR Funds and Other Clients from those portfolio companies or from entities through which a KKR Fund or Other Client invests in a portfolio company or other investment. The amount and timing of the payment of such amounts will be determined by the relevant legal, tax or regulatory treatment that a KKR Fund or Other Client is seeking to achieve, having regard to the circumstances in which such amounts are paid and the jurisdiction of establishment of the relevant portfolio company or intermediary entity. Generally, any such service costs received by KKR and its affiliates with respect to a KKR Fund or Other Client will not be shared with the KKR Fund or Other Client or offset against management fees or carried interest distributions payable by such KKR Fund or Other Client.

In certain circumstances for commercial or tax efficiencies, KKR will also utilize and provide services to a foreign holding structure, which could also result in compensation payable to KKR or its affiliates. For example, certain KKR Funds utilize a Singapore holding structure for investments in Asia. Fees earned by such KKR affiliate will accrue entirely to the benefit of its KKR-affiliated equity owners, which will not include KKR Funds or Other Clients. Moreover, the remuneration will not offset management fees or carried interest distributions due from KKR Funds or Other Clients.
Proprietary Real Estate Platform Investments
Affiliates of KKR have also made proprietary investments in (and will likely make additional investments in) real estate asset management platforms (“RE Platforms”) and real estate investment managers that sponsor RE Platforms. No RE Platform (or fund sponsored by a RE Platform) has been an advisory client of KKR. Rather, each RE Platform is a partnership between an affiliate of KKR and a third-party management team focused on real estate investment activities and day-to-day management of such RE Platform, including origination, underwriting and management of the RE Platform’s investments, and the respective businesses of KKR and each such RE Platform are independently managed and operated. The KKR affiliate, with the management team and other investors, will from time to time seek to restructure or recapitalize an existing portfolio (if any) and/or deploy capital to scale the RE Platform by acquiring real estate assets, and a KKR affiliate has in the past and may in the future make a proprietary investment in the recapitalization of a RE Platform’s investment manager. KKR real estate investment professionals who participate in the investment decisions made on behalf of a KKR Fund or Other Client also participate in certain investment decisions made by a RE Platform. To the extent permitted by the terms of the RE Platform, KKR will in certain cases have the ability to seek to allocate investment opportunities sourced through a RE platform to KKR Funds or Other Clients with overlapping investment mandates, if any (any such investment, a “Joint Investment”). When KKR is an investor in a RE Platform, in addition to its ownership interest in the third party investment manager of the RE Platform, KKR will have a conflict of interest in allocating such investments among the RE Platform and KKR Funds or Other Clients. Certain RE Platforms pursue a core/core-plus investment strategy, including with respect to the acquisition of single tenant office core-plus investments, that seek more stable, relatively low volatility investments, with steady cash flows, and a low to moderate risk/return profile and leverage, as compared to typical real estate investment strategies of KKR Clients and Other Clients. Core/core-plus real estate investments have been excluded from the investment mandates of certain KKR Funds and Other Clients and will therefore not be allocated to such KKR Funds and Other Clients. For each Joint Investment, the applicable RE Platform’s third-party (i.e., non-KKR) management team is expected to be paid a management fee and receive an incentive allocation in respect of the KKR Fund’s or Other Client’s portion of such Joint Investment that will be negotiated directly by KKR with the third party management team of the RE Platform on an arms- length basis. No portion of such fee or incentive allocation is expected to offset the management fee payable by the applicable KKR Fund or Other Client. Other fees related to Joint Investments, including but not limited to, leasing, property development, property management, capex supervisory fees, financing fees and other fees for real estate services, are also expected, from time to time, to be charged by the RE Platform to the KKR Fund or Other Client, or their respective investment vehicles, for services rendered to the Joint Investment. These services fall outside of the scope of the management fees and incentive allocations or performance fees paid to KKR by the KKR Fund or Other Client and, like other fees for replacement services that would be paid by the KKR Fund or Other Client to KKR (or an affiliate) or third parties, none of these fees or incentive allocations are expected to reduce management fees payable by the KKR Fund or Other Client. As such, KKR (or an affiliate) will benefit economically from such other fees paid by the KKR Fund, Other Client or Joint Investment through its ownership interest in the relevant RE Platform.
Warehoused Investments
KKR Funds or Other Clients from time to time acquire one or more portfolio investments acquired by KKR or its affiliates prior to the first closing date of such KKR Fund or Other Client. KKR or its affiliates receive certain fees, including fees paid to Affiliated Brokers, in connection with any such investments. KKR Capstone fees and RPM fees or other Consultants are also paid with respect to such investments. Any fees received by KKR or its affiliates with respect to such investments prior to the date of transfer of such warehoused investments to the relevant KKR Fund or Other Client will generally be retained by KKR or its affiliates and will not be shared with the KKR Fund or Other Client or otherwise reduce management fees payable by the KKR Fund or Other Client to KKR. The decision of the relevant KKR GP or KKR regarding the timing of the first closing date of the KKR Fund or Other Client, therefore generally affects the portion of fees received by KKR and its affiliates with respect to the warehoused investments that are shared with the KKR Fund or Other Client and that otherwise reduce management fees payable by the KKR Fund or Other Client to KKR. In addition, the KKR Fund or Other Client will generally pay an additional amount on the acquisition cost of any warehoused investment equal to a certain percentage per annum from the date of closing of such warehoused investment until the date of transfer of such warehoused investment to the KKR Fund or Other Client. KKR’s Balance Sheet (as defined in Item 11) also from time to time makes loans to KKR Funds or Other Clients to acquire portfolio investments prior to the KKR Fund or Other Client obtaining a subscription facility. The decision of the KKR GP or KKR regarding the timing of the transfer of the warehoused investment to the KKR Fund or Other Client (or, if applicable, the repayment of any Balance Sheet loan to a KKR Fund or Other Client to complete a portfolio acquisition directly) will therefore affect the quantum of the foregoing additional amount that is paid by the KKR Fund or Other Client to KKR or its affiliates. Senior Advisors, Industry Advisors and Other Consultants Senior advisors (“Senior Advisors”) and industry advisors (“Industry Advisors”) are typically senior business leaders who provide advisory and consulting services to KKR, KKR Funds, Other Clients, and portfolio companies of KKR Funds or Other Clients. They are engaged as consultants rather than employees of KKR and are compensated for services provided to KKR, KKR Funds, Other Clients and portfolio companies of KKR Funds and Other Clients. A significant portion of the compensation and reimbursement of expenses paid to Senior Advisors, Industry Advisors and other Consultants are allocated to KKR Funds and Other Clients as expenses, and as a result, these items are described in detail below under “Expenses – Senior Advisors, Industry Advisors and Other Consultants.” Senior Advisors, Industry Advisors and other Consultants also receive compensation and expense reimbursement for providing services to portfolio companies, which includes compensation for services on boards of directors, compensation for service as interim executives and consulting related compensation, which involves both fixed and incentive compensation. Accordingly, KKR Funds and Other Clients indirectly bear the cost of such compensation and expense reimbursement. Compensation and expense reimbursement received by Senior Advisors and Industry Advisors do not offset management fees payable by KKR Funds or Other Clients. Please see the “Expenses” section below for further information regarding allocation to KKR Funds and Other Clients of compensation and other payments received by Senior Advisors and Industry Advisors. KKR Advisors KKR advisors (“KKR Advisors”) are individuals who were formerly employees of KKR and are subsequently engaged as consultants for KKR. Compensation of KKR Advisors is not generally borne by KKR Funds. However, KKR Advisors serve on the boards of portfolio companies and any fees paid to KKR Advisors by portfolio companies, such as director or consulting fees, will not be credited against any management fees payable by KKR Funds.
Expenses
Three general categories of expenses are allocated to and among KKR Funds, Other Clients, KKR Associates Vehicles, co-investment vehicles and certain KKR proprietary entities. As discussed further below, these categories are: (1) fund organizational and administrative expenses, (2) sourcing and diligence expenses and (3) oversight expenses. The offering and governing documents of each KKR Fund and Other Client contain more detailed information on the type of expenses that will be charged to such KKR Fund or Other Client.

In addition to calling capital to pay expenses, KKR (or an affiliate) from time to time advances funds on behalf of KKR Funds or Other Clients for the payment of expenses and then be reimbursed through a reduction of subsequent distributions by the relevant KKR Fund or Other Client (or subsidiary of a KKR Fund or Other Client) or by reducing the amount of monitoring fees, transaction fees and breakup fees allocable to such KKR Fund or Other Client that would otherwise reduce management fees.

When a portfolio company bears an expense directly, each direct and indirect equity owner of such company will indirectly bear a portion of such expenses. Expenses will also reimbursed to KKR by portfolio companies, with the same effect. However, expenses are also borne by (i) holding companies or other vehicles through which certain, but not all, of the direct and indirect equity owners of the portfolio company invest or (ii) a specific KKR Fund or Other Client. When such expenses are borne by such holding companies or other vehicles or by a specific KKR Fund or Other Client, such KKR Fund or Other Client will bear a greater portion of such expenses than would be the case if the relevant portfolio company paid such expenses as only the investors in the holding company (or KKR Fund or Other Client) will bear the cost of such expenses.

Fund Organizational and Administrative Expenses

These expenses are related to the organization, operation and administration of KKR Funds or Other Clients and are not directly related to sourcing investments or to any particular portfolio company. These include expenses related to activities, operations, meetings and the eventual termination and liquidation of the KKR Fund or Other Client. Examples of organizational expenses are legal, accounting, and filing expenses incurred in connection with the organization and establishment of any KKR Fund and the related KKR GP, and the marketing and offering of interests in such KKR Fund or Other Client, including commissions, costs, fees, and expenses of any placement agent or finder and legal, accounting, filing, capital raising, travel (including first or business class airfare and black car services) and accommodation (including first class lodging), printing, and other similar costs, fees, and expenses. Certain KKR Funds or Other Clients pay the cost of the fund administration services provided by KKR employees (including compensation otherwise payable by KKR), and/or internal costs (including compensation and overhead costs) attributable to certain Consultants. Such services typically consist of services that would otherwise be provided by a third party whose fees, costs, and expenses would be paid by the KKR Fund or Other Client. Investors in KKR Funds (other than KKR Associates Vehicles, which do not bear management fees) or Other Clients will typically receive a reduction in management fees in respect of offering and organizational expenses in excess of specific amounts as described in the offering materials, disclosure documents and/or governing documents of the relevant KKR Fund or Other Client. KKR or one or more of its affiliates will generally bear the allocable share of organizational costs and other expenses attributable to KKR Associates Vehicles without seeking reimbursement from such vehicles. In addition, organizational expenses of a feeder fund investing in a KKR Fund are borne by such KKR Fund or such feeder funds, as specified in the offering materials, disclosure documents and/or governing documents of the relevant KKR Fund.

Examples of direct and indirect operational expenses that fall within this category are professional fees directly attributable to a specific KKR Fund or Other Client, such as legal fees and audit fees; insurance premiums and fees (including costs of ERISA fidelity bonds); fund borrowings; indemnification obligations; expenses relating to legal and regulatory compliance; fees, costs and expenses relating to the administration of any fund and its assets; including, without limitation those incurred in connection with the preparation of financial statements, tax returns, K-1s, administration of assets, financial planning and treasury activities; fees, costs and expenses incurred in the preparation of and providing access to fund reports and information (including through websites or other portals) and related operational, secretarial or postage expenses (including technology and other administrative support); general and administrative costs (including salary, bonus, benefits and an allocated portion of overhead of certain Employees); compensation and expenses of Senior Advisors and Industry Advisors; fees, other compensation and expenses of KKR Capstone, RPM and other Consultants; principal, interest on and fees and expenses arising out of all fund borrowings; the costs of advisory committee meetings and the annual investors conference (or other investor meetings) and portfolio management committee meetings for the relevant KKR Fund or Other Client (including costs and expenses of meals, events, entertainment and travel and accommodation costs of KKR personnel, Senior Advisors, Industry Advisors, KKR Advisors and employees of other Consultants attending such meetings); fees, costs and expenses incurred in connection with any amendments, restatements or other modifications to, or the monitoring of compliance with, fund agreements, side letters (including “most favored nations” provisions) and other constituent or related documents of the relevant KKR Fund and the general partner (including costs and expenses relating to investor and advisory committee consent, waiver or similar acknowledgment solicitations, and the preparation of compliance checklists and other comparable compliance and compliance monitoring-related materials); fees, costs and expenses relating to procuring, developing, implementing or maintaining information technology, data subscription and license-based services, including computer software and hardware, electronic equipment or information technology services purchased from third party vendors related thereto, risk analysis tools, research publications, materials, equipment and services, computer software or hardware and other electronic equipment used in connection with a fund and its operation, administration and investment activities and otherwise used in connection with providing services to a KKR Fund or Other Client; expenses of any actual or potential litigation or other dispute or investigation or inquiry related to any KKR Fund or Other Client or any actual or potential portfolio investment (including expenses incurred in connection with the investigation, prosecution, defense, judgment or settlement of litigation and the appointment of any agents for service of process on behalf of such KKR Fund, Other Client, KKR or investors); and other extraordinary expenses related to any KKR Fund or such portfolio investments (including fees, costs and expenses classified as extraordinary expenses under generally accepted accounting principles in the United States). This list is not intended to be exhaustive; other situations and expenses arise in the course of operation of the KKR Funds or Other Clients. KKR Funds or Other Clients will also pay comparable costs, fees and expenses relating to any feeder funds (other than a KKR Credit Associates Vehicles), alternative vehicles, portfolio companies or entities through which a KKR Fund or Other Client invests that are not otherwise borne by such entities. KKR Fund or Other Client expenses and the repayment of any borrowings incurre please register to get more info

As noted in Item 5 above, KKR (including the KKR GPs) generally receives carried interest allocations and fees from KKR Funds or Other Clients. KKR will in certain instances have an incentive to favor, or take increased investment risk with respect to KKR Funds or Other Clients from which it receives higher carried interest allocation (or which are subject to lower preferred return hurdles) or fees over KKR Funds or Other Clients from which lower or no carried interest allocation or fees is received (and notwithstanding that such accounts do not give rise to carried interest allocations, KKR will in certain instances have an incentive to favor a certain KKR proprietary entity over any other KKR Fund or Other Client). KKR has in place policies and procedures to address these conflicts, including policies and procedures designed to ensure allocation of investment opportunities among all client and KKR proprietary entities on a fair and equitable basis, taking into account the client’s investment objectives. These policies and procedures are described in more detail below in Item 11. KKR advises certain KKR Funds that are either feeder funds investing in other KKR Funds or side-by-side vehicles investing alongside other KKR Funds established primarily for the benefit of Employees, Senior Advisors and Industry Advisors, KKR Advisors and RPM executives and certain other persons associated with KKR (including, without limitation, executives of KKR portfolio companies, external consultants and their affiliated entities) (“KKR Associates Vehicles”). KKR Associates Vehicles are not subject to management fees or carried interest allocations but are generally allocated monitoring fees and transaction fees, breakup fees and other similar fees based on their respective ownership (including indirect ownership through KKR Funds) of the relevant portfolio company or investment as discussed above in Item 5 (except in the case of certain older KKR Funds). KKR retains such compensation to the extent it is allocable to KKR Associates Vehicles (except in the case of investments made alongside certain older KKR Funds). KKR will generally bear any allocable share of KKR Fund organizational costs and other expenses on behalf of the KKR Associates Vehicles. As the investment activities of these vehicles are implemented indirectly through the other KKR Funds in which they invest or alongside other KKR Funds, as applicable, KKR does not view these arrangements as giving rise to the types of conflicts of interest described above. please register to get more info

KKR provides investment management, advisory and administrative services, as described above in response to Item 4, to the KKR Funds and Other Clients. With limited exceptions (including, currently, with respect to KKR Funds established as employee securities companies and KKR Associates Vehicles), investment in KKR Funds is generally only available to institutional investors and certain high net worth investors that are “accredited investors” and “qualified purchasers” or in the case of Employees, “knowledgeable employees,” within the meaning of the Securities Act and the Investment Company Act, as applicable. KKR Funds or Other Clients generally have a specified minimum investment amount as set forth in their offering materials, disclosure documents and/or governing documents. These minimum amounts are subject to discretion, on the part of KKR or the relevant KKR GP, to permit investments of a smaller amount generally or with respect to any investor.

A broad range of U.S. and non-U.S. institutional investors, including, among others, governmental and corporate pension and profit sharing plans, including investors regulated under the U.S. Employee Retirement Income Security Act of 1976, as amended (“ERISA”), endowments and foundations, insurance companies, financial institutions, sovereign wealth funds, funds of funds, private wealth and other third party distribution platforms and certain high net worth individuals and family offices, invest in KKR Funds and Other Clients. Additionally, Employees and other persons associated with KKR and/or its affiliates and portfolio companies, including, for example, current or former portfolio company executives, and certain KKR proprietary entities, make capital contributions to KKR Funds including, in particular, KKR Associates Vehicles. please register to get more info

Investment Strategies and Methods of Analysis
As noted above in response to Item 4, KKR advises private equity funds and other investment vehicles that invest capital primarily for long-term appreciation, primarily either through controlling ownership of companies or minority positions. KKR also manages investments in infrastructure companies and assets across a broad range of sectors and investment types, including: power and utilities; long-term contracted or “hedgeable” generation; midstream energy infrastructure; alternative energy infrastructure; airports; ports; transportation (roads, bridges, tunnels, railway lines, parking and mass transit structures); asset leasing; water and wastewater; social infrastructure (for example, schools, public healthcare facilities, and government housing); and telecommunications infrastructure. In addition, KKR manages investments in energy assets, such as oil and gas properties, royalties and drilling activities that offer exposure to underlying commodities and current cash flows from the production of the acquired resources. KKR also manages investments in real estate assets, including direct investments in commercial or residential real property, debt (including loans, commercial mortgage backed securities, including subordinated tranches of commercial mortgage backed securities known as “B-Pieces,” and mezzanine debt), special situations transactions and businesses with significant real estate holdings. KKR sponsors a customized platform that invests in KKR Funds and third party funds pursuing private equity and related co-investments, and strategic partnership vehicles that invest across multiple KKR Funds and investment strategies. KKR also manages growth capital investments, including through KKR Funds focused on growth equity investments in the technology, media and telecommunications and health care sectors. KKR has also established core investment vehicles, through which it aims to make core investments across strategies that KKR manages (please see “Core Investments” below for further information). KKR also manages and has recently launched KKR Funds focused on making investments in companies seeking to implement or provide ESG related solutions (please see “Social and Environmental Impact Investments; Impact and ESG Reporting” below for further information).

Certain KKR Funds or Other Clients make convertible arbitrage or other investments in Marketable Securities. KKR also employs hedging techniques and invests in derivative instruments, including without limitation, swaps, options and forward contracts, to hedge exchange rate and interest rate risks and other risks associated with the investment strategies described above, in each case as permitted pursuant to the offering materials, disclosure documents and/or governing documents of the relevant KKR Fund or Other Client.

KKR employs various methods of analysis, including fundamental and technical methods, when analyzing potential investments. KKR utilizes multiple sources of information in analyzing investments, including financial newspapers and magazines, inspections of company activities, research material prepared by others, corporate rating services, annual reports, prospectuses, filings with the SEC and company press releases. KKR also uses industry magazines, third party consultants, expert networks firms, lawyers, accountants, asset operators, regulatory filings filed with non-U.S. regulators, in-person meetings with company management, due diligence visits to operational facilities and other physical assets, discussions, as appropriate, with suppliers, customers, competitors, former employees, financial reports and projections and information provided by strategic investors in KKR Funds and by investment banks, and alternative or aggregated data and other artificial intelligence techniques, including algorithmic analysis. In addition, KKR Capstone, RPM, other Consultants, Senior Advisors, Industry Advisors and KKR Advisors often provide supplemental insights to KKR from a management consulting perspective and from the perspective of a C-level executive (i.e., “chief” executive officers or other senior officers) or board of directors. KKR has a roster of active Senior Advisors and Industry Advisors globally, many of whom have extensive corporate management expertise, having served as Chief Executive Officer, Chief Financial Officer, Chairman of the Board or other comparable positions at large, industry-leading companies or governmental agencies. In conducting due diligence on investments in third-party funds through KKR’s customized portfolio solutions business, KKR will use many of the above due diligence methods, as appropriate, in addition to a detailed review of fund governing documents in conjunction with external counsel and consultants.
Material Risks of Significant Investment Strategies
The risk factors briefly summarized below are not applicable to all KKR Funds or Other Clients. Such summary does not purport to be a complete list or explanation of the risks involved in an investment in a KKR Fund or Other Client. The offering materials, disclosure documents and/or governing documents of each KKR Fund or Other Client will typically include a more detailed summary of material risks applicable to the KKR Fund or Other Client and its investment strategy and structure and should be read in conjunction with the risks below. Private Equity Investments and General Risks relating to KKR Funds and Other Clients Investments made by KKR Funds and Other Clients, including private equity investments, involve a number of material risks including (but not limited to) the risks discussed below.

Illiquid and Long-Term Investments Investment in KKR Funds and Other Clients are speculative in nature and require a long-term commitment, with no certainty of return of capital or gains. The investments are expected to be predominantly illiquid and there can be no assurance that a KKR Fund or Other Client will be able to generate returns for investors. The realizable value of a highly illiquid investment is often less than its intrinsic value. Although certain investments by KKR Funds and Other Clients generate current income, the return of capital and the realization of gains, if any, from an investment generally will occur only upon the partial or complete disposition of such investment, as to which there can be no certainty. While investments of KKR Funds and Other Clients can generally be sold at any time, sales typically only occur a substantial number of years after the investment is made. KKR Funds and Other Clients will generally not be able to sell securities comprising an investment publicly unless their sale is registered under applicable securities laws, or unless an exemption from such registration requirements is available. In addition, in some cases a KKR Fund or Other Client will be prohibited by contract from selling certain securities for a period of time, which will restrict their ability to exit the relevant investment and sometimes means that the KKR Fund or Other Client is unable to take advantage of favorable market prices when doing so. In view of such limitations on liquidity, which are illustrative and not exhaustive, KKR Funds or Other Clients will generally not be able to realize on an investment until the sale of such investment. Furthermore, such illiquidity sometimes continues even if the underlying portfolio companies or other relevant issuers obtain listings on securities exchanges. There can be no assurance that a KKR Fund or Other Client will be able to dispose of its investments at the price and at the time it wishes to do so, and investors should expect that they will likely not receive a return of their capital for a long period of time even if the investments of the KKR Fund or Other Client in which they are invested prove successful. Certain investments by KKR Funds or Other Clients are in securities that are or become publicly traded. Such investments are subject to economic, political, interest rate and other risks, any of which could result in an adverse change in the market price. Valuation Risks KKR Funds and Other Clients will rely on the relevant KKR GP or KKR and its affiliates, as applicable, for valuation of their assets and liabilities. KKR Funds and Other Clients will primarily hold securities and other assets that will not have readily ascertainable market values. In such instances, the relevant KKR GP or KKR will determine the fair value of such securities and assets in its reasonable judgment based on various factors and in reliance on internal pricing models, in accordance with KKR’s valuation policies and procedures. KKR makes use of, and relies on, valuation information and data developed and provided by certain third parties. Such valuations sometimes vary from similar valuations performed by other independent third parties for similar types of securities or assets. In addition, KKR Funds and Other Clients rely on the valuations or valuation information provided by, or determined in consultation with, the relevant KKR Credit general partner or KKR Credit and its affiliates, as applicable (for example, when KKR Funds or Other Clients are investing in KKR Credit strategies). The valuation of illiquid securities and other assets is inherently subjective and subject to increased risk that the information utilized to value such assets or to create the price models could be inaccurate or subject to other error. The value of a KKR Fund or Other Client’s portfolio is sometimes also affected by changes in accounting standards, policies or practices as well as general economic, political, regulatory and market conditions and the actual operations of portfolio investments which are not predictable and can have a material impact on the reliability and accuracy of such valuations. Due to a wide variety of market factors and the nature of certain securities and assets to be held by KKR Funds and Other Clients, there is no guarantee that the value determined by a KKR GP or KKR will represent the value that will be realized by a KKR Fund or Other Client on the eventual disposition of an investment or that would, in fact, be realized upon an immediate disposition of the investment. KKR regularly reports to investors and prospective investors certain metrics of KKR Funds’ and Other Clients’ performance, such as rates of return and multiples of money, which calculations depend on the value of such KKR Funds’ or Other Clients’ investments, including unrealized investments, and involve uncertainties and subjective determinations, including for difficult to value assets. The amount and timing of carried interest received by KKR or a KKR GP with respect to a KKR Fund or Other Client will depend in part on the value of a KKR Fund’s or Other Client’s assets and liabilities. If the valuations made by the KKR GP or KKR are incorrect, the amount of carried interest received by the KKR GP or KKR or the timing of receipt of carried interest would also be expected to be incorrect.

Due Diligence KKR seeks to conduct reasonable and appropriate analysis and due diligence of its investments based on the facts and circumstances applicable to each investment. The objective of such analysis and due diligence is to identify attractive investment opportunities based on the facts and circumstances surrounding an investment, to identify possible risks associated with that investment and, in the case of most private equity and real asset investments, to prepare a framework for driving operational achievement and value creation from the date of acquisition. Due diligence generally entails evaluation of important and complex business, financial, tax, accounting, environmental, technological, regulatory and legal issues. Consultants, legal advisors, accountants, investment banks and other third parties are generally involved in the due diligence process to varying degrees depending on the type of investment. Involvement of third-party advisors or consultants present a number of risks primarily relating to KKR’s reduced control of the functions that are outsourced. In addition, if KKR is unable to timely engage third-party providers, their ability to evaluate and acquire more complex targets could be adversely affected. When conducting due diligence and making an assessment regarding an investment, KKR will rely on the resources available to it, including information provided by the target of the investment and, in some circumstances, third-party investigations. The due diligence investigation that KKR carries out with respect to any investment opportunity will not always reveal or highlight all relevant facts that are necessary or helpful in evaluating such investment opportunity. In addition, instances of fraud and other deceptive practices committed by the management teams of portfolio companies in which a KKR Fund or Other Client has an investment could undermine KKR’s due diligence efforts with respect to such companies. Moreover, such an investigation will not necessarily result in the investment being successful. Conduct occurring at portfolio companies, even activities that occurred prior to a KKR Fund’s or Other Client’s investment therein, could have an adverse impact on a KKR Fund or Other Client. Additionally, in connection with the evaluation of potential investment opportunities, KKR engages with individuals retained by expert networks who are under an obligation not to disclose confidential information. KKR seeks to avoid inadvertently obtaining confidential information from such sources and has therefore implemented procedures to mitigate the risk that the use of expert networks could result in the receipt of confidential information by investment professionals. However, no assurance can be made that such individuals do not share confidential information. In such cases, KKR could become restricted from pursuing investments, which could have an adverse impact on a KKR Fund or Other Client. As a part of due diligence on a potential investment, KKR sometimes invests in the securities or interests of a portfolio company on the basis of the company’s financial projections. Management judgments are generally the basis for projected operating results. Projections are merely estimates of future results based on assumptions made when the projections were developed. There is no certainty that a company will achieve its projected results, and actual results can vary significantly from projections. Unpredictable general economic conditions can have a material adverse impact on the reliability of such projections and the performance of an investment.

Instances of bribery, fraud, accounting irregularities and other improper, illegal or corrupt practices can be difficult to detect, and fraud and other deceptive practices can be widespread in certain jurisdictions. Several KKR Funds or Other Clients invest in emerging market countries that do not have established laws and regulations that are as stringent as in more developed nations, or where there exists insufficient coordination of anti-corruption initiatives and/or other existing laws and regulations are not consistently enforced. For example, KKR Funds invest throughout jurisdictions that have material perceptions of corruption according to international rating standards (such as “Transparency International” and “Corruption Perceptions Index”) such as China, India, Indonesia, and countries in Central and South America, the Middle East and Africa. Due diligence on investment opportunities in these jurisdictions is frequently more complicated because consistent and uniform commercial practices in such locations have not developed. Bribery, fraud, accounting irregularities and corrupt practices can be especially difficult to detect in such locations. Accordingly, KKR cannot be certain that the due diligence investigation that it will carry out with respect to any investment opportunity will reveal or highlight all relevant facts (including fraud, bribery and other illegal activities and contingent liabilities) that are necessary or helpful in evaluating such investment opportunity, including the existence of contingent liabilities. KKR also cannot be certain that its due diligence investigations will result in investments being successful or that the actual financial performance of an investment will not fall short of the financial projections KKR used when evaluating that investment.

Expedited Transactions Investment analyses and decisions by KKR are frequently required to be undertaken on an expedited basis to take advantage of investment opportunities. In such cases, the information available to KKR at the time of making an investment decision is often limited, and KKR might not have access to detailed information regarding the investment. Therefore, no assurance can be given that KKR will have knowledge of all circumstances that adversely affect an investment. In addition, KKR expects often to rely on outside advisors or Consultants in connection with its evaluation of proposed investments. No assurance can be given as to the accuracy or completeness of the information provided by such outside advisors or Consultants, and KKR Funds or Other Clients could incur liability as a result of such outside advisors’ or Consultants’ actions. Risk Arising from Provision of Oversight Rights KKR Funds or Other Clients will typically seek to obtain oversight rights with respect to KKR Funds’ or Other Clients’ portfolio companies, and KKR executives and/or Senior Advisors, and RPM executives often serve on the boards of directors of portfolio companies. The designation of directors and other types of participation could expose the assets of a KKR Fund or Other Client to liability for environmental damage, product defects, pension and other fringe benefits, failure to supervise management, violation of laws and government regulations (including securities laws) and other types of liability, as well as claims by a portfolio company, its other security holders, its creditors, governmental authorities and other third parties, which could exceed the value of a KKR Fund’s or Other Client’s initial investment in that portfolio company. Regulators and courts in some jurisdictions could find a basis for attributing liability to a KKR Fund or Other Client even where the nexus between the KKR Fund or Other Client and the activities at the portfolio company that led to the liability being incurred in the first place are attenuated. Complex Investments KKR often pursues complex investment opportunities. This can often take the form of substantial business, regulatory or legal complexity that might deter other investment managers. KKR’s tolerance for complexity presents risks, as such transactions can be more difficult, expensive and time consuming to finance and execute; it can be more difficult to manage or realize value from the assets acquired in such transactions; and such transactions sometimes entail a higher level of regulatory scrutiny, the application of complex tax laws or a greater risk of contingent liabilities. KKR Fund (and potentially Other Client) transactions involve complex tax structures that are costly to establish, monitor and maintain, and as KKR pursues a larger number of transactions across multiple assets classes and in multiple jurisdictions, such costs will increase and the risk that a tax matter is overlooked or inadequately or inconsistently addressed will increase. Consequently, KKR is subject to the risk of failing to achieve the desired tax benefit or otherwise decrease the returns of KKR Fund and Other Client investments. Changes in law and regulation and in the enforcement of existing law and regulation, such as antitrust laws, data privacy and data protection laws and tax laws, also add complexity and risk to KKR’s investment strategies. Further, there is a risk that KKR Funds or Other Clients will acquire an investment that is subject to contingent liabilities, which could be unknown to KKR at the time of acquisition or, if they are known to KKR, that KKR will not accurately assess or protect against the risks that they present. Acquired contingent liabilities could thus result in unforeseen losses for KKR Funds or Other Clients.

Investment Ranking In many cases, the portfolio companies in which KKR Funds and Other Clients invest have, or are permitted to have, outstanding indebtedness or equity securities that rank senior to a KKR Fund’s or Other Client’s investment. By their terms, such instruments generally provide that their holders are entitled to receive payments of distributions, interest or principal on or before the dates on which payments are to be made in respect of such investments of KKR Funds and Other Clients. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a company in which an investment is made, holders of securities ranking senior to the KKR Fund’s or Other Client’s investment would typically be entitled to receive payment in full before distributions could be made in respect of such investment. Dividends and distributions paid to KKR Funds and Other Clients, as well as fees such as transaction fees and monitoring fees which are creditable in part against management fees payable by KKR Funds or Other Clients, are potentially subject to clawback under various legal theories in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy. In addition, debt investments made by KKR Funds or Other Clients in portfolio companies could be equitably subordinated to the debt investments made by third parties in such portfolio companies. After repaying senior security holders, the company might not have any remaining assets to use for repaying amounts owed in respect of such investments. To the extent that any assets remain, holders of claims that rank equally with the KKR Fund’s or Other Client’s investment would be entitled to share on an equal and ratable basis in distributions that are made out of those assets. Also, during periods of financial distress or following insolvency, the ability of KKR Funds or Other Clients to influence a company’s affairs and to take actions to protect an investment might be substantially less than that of the senior creditors.

Investments Longer Than Term KKR Funds and Other Clients will generally be terminated and dissolved in accordance with the provisions governing their terms as set forth in their governing documents. KKR Funds and Other Clients might make investments that are not advantageously disposed of prior to the date that a KKR Fund will be dissolved or an Other Client relationship will terminate, as applicable, either by expiration of the term or otherwise pursuant to their governing documents. Limited Number of Investments KKR Funds or Other Clients are permitted to participate in a relatively limited number of investments and, as a consequence, the aggregate return of KKR Funds or Other Clients could be substantially adversely affected by the unfavorable performance of even a single investment. In addition, KKR Funds’ or Other Clients’ investment programs are often concentrated in a limited number of sectors and geographies. During periods of difficult market conditions or slowdowns in certain regions or geographies, the adverse effect on a KKR Fund or Other Client could be exacerbated by the geographic or sectoral concentration of its investments. If a KKR Fund or Other Client is unable to sell, assign or otherwise syndicate out positions in investments that it holds that are greater than the KKR Fund’s or Other Clients’ target positions, the KKR Fund or Other Client will be forced to hold its excess interest in such investments for an indeterminate period of time. This could result in KKR Funds’ or Other Clients’ investments being over-concentrated in certain companies, sectors or geographies. To the extent that a KKR Fund’s or Other Client’s investments are concentrated in a particular company, sector or geographic region, its investments will become more susceptible to fluctuations in value resulting from adverse economic or business conditions with respect thereto. In addition, to the extent an investor in a KKR Fund or Other Client is also an investor in one or more other KKR Funds or Other Clients that co-invest alongside each other in a particular investment, such investor’s exposure to and risk of loss with respect to such investment will be further concentrated.

Investment Leverage; Availability of Financing KKR Funds’ and Other Clients’ investments typically include investments in companies and assets whose capital structures include significant indebtedness. Such investments are inherently more sensitive to declines in revenues, competitive pressures and increases in expenses and interest rates. A highly leveraged company or asset often will be subject to restrictive covenants in its lending agreements restricting its activity, or limited in making strategic acquisitions or obtaining additional financing, and will have increased exposure to adverse economic factors such as downturns in the economy or deterioration in the condition of the portfolio company or its industry. In addition, leveraged entities or assets are often subject to restrictions on making interest payments and other distributions. If an event occurs that prohibits a portfolio company or other portfolio investment from making distributions for a particular period, this could affect the levels and timing of any returns of a KKR Fund or Other Client. This leverage could result in more serious adverse consequences to such companies or assets (including their overall profitability or solvency) in the event these factors or events occur than would be the case for less leveraged investments. If a highly leveraged company or asset cannot generate adequate cash flow to meet debt obligations, it could default on its loan agreements or bonds or be forced into bankruptcy resulting in a restructuring of its capital structure or liquidation. Furthermore, to the extent companies or assets in which KKR Funds or Other Clients have invested become insolvent, KKR Funds or Other Clients could determine, in cooperation with other investors or on their own, to engage, at the KKR Funds’ and Other Clients’ expense in whole or in part, counsel and other advisors in connection therewith. In addition to leverage in the capital structure of companies and other assets, a KKR GP could incur leverage on behalf of KKR Funds or Other Clients.

Because KKR Funds and Other Clients typically make equity investments in portfolio companies, the equity securities received by KKR Funds and Other Clients will typically be the most junior or some of the most junior securities in the case of a levered capital structure, and thus subject to the greatest risk of loss in the case of the portfolio company’s financial difficulty, or if an event of default occurs under the terms of the relevant financing and a lender decides to enforce its creditor rights. Events of default could in some cases be triggered by events not related directly to the borrower itself.

A KKR Fund’s or Other Client’s ability to achieve attractive rates of return in many cases will depend on the availability and terms of any borrowings that are required or desirable with respect to its investment strategy. For example, from time to time the market for private equity transactions has been adversely affected by a decrease in the availability of senior or subordinated financings for transactions. A decrease in the availability of financing or an increase in either interest rates or risk spreads demanded by financing sources, whether due to changes in economic or financial market conditions or a decreased appetite for risk by lenders, could also make it more expensive to finance investments by KKR Funds or Other Clients on acquisition and throughout the term of their investment and could make it more difficult to compete for new investments with other potential buyers that have a lower cost of capital. A portion of the indebtedness used to finance investments on acquisition and throughout the term of a KKR Fund’s or Other Client’s investments often includes high-yield debt securities issued in the capital markets. Availability of capital from the high-yield debt markets is subject to significant volatility, and there are times when a KKR Fund or Other Client will not be able to access those markets at attractive rates, or at all, when completing an investment or as otherwise required during the term of the KKR Fund’s or Other Client’s investment. Leverage is also applied with respect to a KKR Fund’s or Other Client’s portfolio in entirety or with respect to one or more investments, and the presence of such borrowings will magnify the volatility of such KKR Fund’s or Other Client’s investment portfolio and could substantially increase the risk profile of a KKR Fund or Other Client and its investments. Any failure by lenders to provide previously committed financing can also expose KKR Funds or Other Clients to potential claims by sellers of businesses which KKR Funds or Other Clients have contracted to purchase.

When existing portfolio companies reach the point when debt incurred to finance those investments matures in significant amounts and must be either repaid or refinanced, those investments would likely materially suffer if they have generated insufficient cash flow to repay maturing debt and there is insufficient capacity and availability in the financing markets to permit them to refinance maturing debt on satisfactory terms, or at all. If the financing for such purposes were to be unavailable or uneconomic when significant amounts of the debt incurred to finance existing portfolio investments start to come due, these investments could be materially and adversely affected. In the event of default or potential default under applicable financing arrangements, one or more portfolio companies could go bankrupt, which could give rise to substantial investment losses, adverse claims or litigation against KKR or KKR Funds or Other Clients.

In addition, the leveraged lending guidelines published by U.S. federal bank regulatory agencies and the European Central Bank (“ECB”) (or similar guidelines or restrictions published or enacted in the future) could limit the willingness or ability of banks or other financing sources to provide financing sought by KKR Funds or Other Clients or their portfolio companies, and could result in an inability of a KKR Fund or Other Client or their portfolio companies to establish their desired financing or capital structure (please see “Subscription Facilities; Guarantees; Contractual Obligations” below). Availability of Suitable Investment Opportunities The success of a KKR Fund’s or Other Client’s investment strategy depends on the ability of KKR to identify and select appropriate investment opportunities and to acquire these investments. The industries and sectors in which a KKR Fund or Other Client invests are highly competitive. KKR Funds and Other Clients compete for investments with operating companies, financial institutions, and other institutional investors as well as private equity, hedge, and other investment funds, and this competition could adversely impact the availability of investments and the terms upon which KKR effects and exits them.

International Investments KKR Funds and Other Clients invest globally and in particular invest in emerging or developing market countries (including in Asia, Central and South America, Eastern Europe, countries in the Middle East, including Israel, and Africa). Investments in emerging and developing markets, as well as in certain more developed non-U.S. markets, involve certain factors not typically associated with investing in more developed countries and economies, including, without limitation, risks relating to: (i) differences arising from less developed securities markets, including the relatively small size and low trading volumes of such markets, resulting in lack of liquidity and price volatility; (ii) the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements which could result in unreliable financial information; (iii) less government supervision and regulation in some countries, which could result in lower-quality information being available and less developed corporate laws regarding fiduciary duties and the protection of investors, the absence of developed legal structures governing private or foreign investment and private property, and less developed bankruptcy laws and difficulty in bringing suit and enforcing contractual obligations; (iv) certain economic and political risks, including potential economic, political or social instability, lower levels of democratic accountability, exchange control regulations, restrictions on foreign investment and repatriation of capital (possibly requiring government approval), expropriation or confiscatory taxation and higher rates of inflation or hyper-inflation and reliance on a more limited number of commodity inputs, service providers and/or distribution mechanisms; (v) unpredictable governmental influence on the national and local economies, including the risk of nationalization of key industries or changes in a country’s policies on privatizations; (vi) fewer or less attractive financing and structuring alternatives and exit strategies; (vii) the possible imposition of local taxes on income and gains recognized with respect to investments; (viii) increased currency, interest rate and credit risks; and (ix) different corporate governance frameworks. In addition, various countries and regulatory bodies from time to time implement controls on foreign exchange and outbound remittances of currency, which could impact not only the timing and amount of capital contributions that are required to be made to KKR Funds and Other Clients, but also the value, in U.S. dollars, of the investments and investment proceeds of KKR Funds and Other Clients. For example, China has implemented stricter controls on foreign exchange and outbound remittances. The risks of investing in emerging and developing markets, including the risks described above, are usually greater than the risks involved in investing in more developed markets and also increase counterparty risks for investments in those markets. In addition, investor risk aversion to developing or emerging markets can have a significant adverse effect on the value and/or liquidity of investments made in or exposed to such markets and can accentuate any downward movement in the actual or anticipated value of such investments which is caused by the factors described above.

Following the global financial crisis of 2008-2009 and the subsequent uneven global recovery, the rise of populist political parties and economic nationalist sentiments has led to increasing political uncertainty and unpredictability throughout the world. Furthermore, the current rise of populist political movements could result in negative sentiment toward globalization, free trade, capitalism and financial institutions, which could lead to heightened scrutiny and criticisms of KKR and investments of KKR Funds and Other Clients. In addition, public discourse in the 2020 U.S. presidential election has elevated the level of focus put on KKR and the industries and portfolio companies in which KKR Funds and Other Clients are invested. The risk of reputational harm is elevated by the prevalence of internet and social media usage and the increased public focus on behaviors of business activities, including those affecting stakeholder interests and ESG considerations. Among the attendant risks are greater regulatory uncertainty, for example regarding the posture of governments with respect to taxation, international trade, immigration and law enforcement. Further political instability or uncertainty in the future could have an adverse effect on the economy of such countries.

KKR Funds or Other Clients are permitted to invest in European companies and companies that have operations that are or could be affected by the Eurozone economy, including, without limitation, those factors described below under “Changes Resulting from the United Kingdom’s Exit from the European Union.” The Eurozone is currently struggling with weak growth. If this growth continues to weaken then there is a possibility that the Eurozone could return to a recessionary environment and concerns that were prevalent in the years following the global financial crisis could re-emerge. Such investments are subject to the risk that certain member states of the EU cease to use the euro as their national currency, that one or more member states in addition to the United Kingdom seeks to withdraw its EU membership, or even the collapse of the Eurozone as it is constituted today, which would likely have an adverse impact on the European and global economy and, consequently, KKR Funds and Other Clients with investments in Europe. To the extent any KKR Fund’s or Other Client’s investments are denominated in the euro, legal uncertainty about the funding of euro denominated obligations following any break up of or exits from the Eurozone (particularly in the case of investments in companies in affected countries) could also have material adverse effects on a KKR Fund or Other Client. The economies of many countries are heavily dependent upon international trade and, accordingly, could be materially and adversely affected by protective trade barriers, exchange controls, managed adjustments in relative currency values and the economic conditions in the countries with which they trade. For example, trade tensions between the United States and China and the imposition of tariffs in 2019 have weighed on the global economy, and although an initial trade deal was reached in January 2020 between the two countries, ongoing trade disputes could create uncertainty and volatility in the market (see also “Uncertainty Regarding Ongoing Trade Negotiations between the United States and China” below). A slowdown in the economies of the United States and the EU is also likely to adversely affect economic growth in certain Asian countries which, to varying degrees, depend on exports to those economies. Certain Asian and European countries have from time to time experienced high rates of inflation and have extensive external debt. In addition, the economies of certain European and Asian countries are vulnerable to weaknesses in world prices for their commodity exports or fluctuations of worldwide commodity prices.

European Union regulations known as MiFID II and MiFIR regulate the provision of investment services and trading financial instruments in the EU. The application of MiFID II and MiFIR could result in increased costs to KKR and its affiliates, including KKR Funds and Other Clients, and any failure to comply with the new requirements could result in enforcement action, including, but not limited to, fines.

Many jurisdictions in which KKR operates have laws and regulations relating to data privacy, cyber- security and protection of personal information, including the General Data Protection Regulation (“GDPR”), which came into effect in the EU in May 2018 and the California Consumer Privacy Act (“CCPA”) that became effective in January 2020.

GDPR and the CCPA impose stringent privacy and data protection requirements for covered businesses and provide for significant penalties for noncompliance (see also “Cybersecurity Risks; System Failures” below). Any inability, or perceived inability, to adequately address privacy and data protection concerns, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations, even if unfounded, could result in additional cost and liability and could damage KKR’s reputation and adversely affect KKR Funds and Other Clients.

Economic sanction laws in the United States and other jurisdictions prohibit KKR, KKR Funds and Other Clients from transacting with certain countries, individuals and companies. In the United States, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) administers and enforces laws, Executive Orders and regulations establishing U.S. economic and trade sanctions, which prohibit, among other things, transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals. These types of trade sanctions significantly restrict or completely prohibit certain investment activities in regions outside the United States, and if a KKR Fund or Other Client or its portfolio companies were to violate any such laws or regulations, it could face significant legal and monetary penalties. Some of these regulations provide that penalties can be imposed on KKR, KKR Funds and Other Clients for the conduct of a portfolio company, even if KKR and KKR Funds or Other Clients have not violated any regulation. Accordingly, KKR Funds and Other Clients will generally require each of its subscribers to represent and warrant, on a continuing basis, that it is not, and that to the best of its knowledge or belief its beneficial owners, controllers or authorized persons (“Related Persons”) (if any) are not; (i) named on any list of sanctioned entities or individuals maintained by OFAC or pursuant to EU and/or UK Regulations, (ii) operationally based or domiciled in a country or territory in relation to which sanctions imposed by the United Nations Security Council, OFAC, the EU and/or the UK apply, or (iii) otherwise subject to sanctions imposed by the United Nations Security Council, OFAC, the EU or the UK (collectively, a “Sanctions Subject”). Where the subscriber or a Related Person is or becomes a Sanctions Subject, the KKR Fund or Other Client could be required immediately and without notice to the subscriber to cease any further dealings with the subscriber and/or the subscriber’s interest in the KKR Fund or Other Client (which could include “freezing” or “blocking” such subscriber’s interest) until the subscriber ceases to be a Sanctions Subject, or a license is obtained under applicable law to continue such dealings (a “Sanctioned Persons Event”). KKR Funds and Other Clients, and KKR and its affiliates shall have no liability whatsoever for any liabilities, costs, expenses, damages and/or losses (including but not limited to any direct, indirect or consequential losses, loss of profit, loss of revenue, loss of reputation and all interest, penalties and legal costs and all other professional costs and expenses) incurred by the subscriber as a result of a Sanctioned Persons Event. In addition, should any investment made on behalf of a KKR Fund or Other Client subsequently become subject to applicable sanctions, the KKR Fund or Other Client could immediately and without notice cease any further dealings with that investment and its interest in such investment could be “frozen” or “blocked” until the applicable sanctions are lifted or a license is obtained under applicable law to continue such dealings or divest from such investment. KKR and KKR Funds and Other Clients are committed to comply with the U.S. Foreign Corrupt Practices Act (“FCPA”) and the FCPA and other anti-corruption laws and regulations would likely cause KKR to be unwilling to enter into certain potential investments that KKR spent substantial time and effort identifying and developing. The FCPA and other anti-corruption laws, anti-bribery laws and regulations, as well as anti-boycott regulations, could also apply to and restrict the activities of KKR Funds’ and Other Clients’ portfolio companies. If a portfolio company of a KKR Fund or Other Client were to violate any such laws or regulations, such portfolio company could face significant legal and monetary penalties. The U.S. government has indicated that it is focused on FCPA enforcement, which increases the risk that KKR Funds’ and Other Clients’ portfolio companies or KKR Funds or Other Clients become the subject of such actual or threatened enforcement. As such, a violation of the FCPA or other applicable regulations by a portfolio company could have a material adverse effect on KKR Funds and Other Clients. In recent years, the U.S. Department of Justice (the “DOJ”) and the SEC have devoted greater resources to enforcement of the FCPA. In addition, the United Kingdom has recently significantly expanded the reach of its anti-bribery laws. While KKR has developed and implemented policies and procedures designed to ensure compliance by KKR and its personnel with the FCPA and other anti-bribery laws, such policies and procedures might not be effective in all instances to prevent violations. Any determination that KKR has violated the FCPA or other applicable anti-corruption laws or anti-bribery laws could subject it to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect KKR’s business prospects and/or financial position, as well as the ability of a KKR Fund or Other Client to achieve their investment objective and/or conduct its operations. Changes Resulting from the United Kingdom’s Exit from the European Union The United Kingdom formally exited the European Union on January 31, 2020. During a transitional period that applies from December 31, 2020, affiliates of KKR located in the EU and the United Kingdom will have largely the same rights as they currently have, including in relation to the exercise of passporting rights. However, the nature and extent of the future relationship between the United Kingdom and the EU is currently subject to negotiation and remains unclear. The United Kingdom could leave the EU without any agreement as to the terms of the future relationship. The resulting legal, regulatory and political uncertainty in this regard have impacted and will likely continue to impact KKR Funds and Other Clients and their portfolio companies in a variety of ways, not all of which are currently readily apparent, with the materiality of any risks dependent in large part on actions to be taken by the United Kingdom and the EU. Certain KKR Funds and Other Clients have portfolio companies and other issuers with significant operations and/or assets in the United Kingdom, any of which could be adversely impacted by any new legal, tax and regulatory environment, whether by increased costs or impediments to the implementation of their business plan. Moreover, the uncertainty with respect to Brexit could adversely affect KKR’s ability to source investments in portfolio companies that are located in the United Kingdom, or derive revenues from, the United Kingdom. Brexit could also impair KKR’s ability to recruit, retain and motivate new employees and retain key employees. Uncertainty Regarding Ongoing Trade Negotiations between the United States and China As noted below in “Market, Economic and Political Risks,” market disruption can negatively impact funds such as KKR Funds and Other Clients. Trade tensions, for example, between the United States and China, as well as among the United States and other countries, have had and likely will continue to have an adverse impact on global economic conditions. In 2018 and 2019, the United States and China implemented a number of tariffs and retaliatory tariffs on a variety of imports from each other targeting a variety of sectors, including aerospace, information and communications technology, industrial machinery, automobiles and agricultural products. Although an initial trade deal was subsequently reached in January 2020 between the two countries, there remains much uncertainty as to whether this and further trade negotiations between the United States and China will be successful and how the trade tensions between the United States and China will progress. If the trade tensions between the United States and China continue or escalate, or if additional tariffs or trade restrictions are implemented by the United States, China or other countries in connection with trade disputes, there could be material adverse effects on the economies of numerous countries, and KKR Funds and Other Clients and their portfolio investments could be materially and adversely affected. Pandemics, Epidemics and Other Public Health Crises Pandemics, epidemics or other public health crises periodically adversely impact KKR, KKR Funds, Other Clients and their portfolio companies, both regionally, and, in connection for example with the COVID-19 pandemic, on a worldwide basis. The continuing spread of COVID-19 and other pandemics has had, and will continue to have, a material adverse impact on local economies in the affected jurisdictions and also on the global economy as cross border commercial activity is impacted by government and private measures seeking to contain its spread. In addition to these developments having potential adverse consequences for the portfolio companies and other issuers in or through which KKR Funds and Other Clients invest and the value of KKR Funds’ and Other Clients’ investments therein, the operations of KKR and KKR Funds and Other Clients in many jurisdictions will be adversely impacted, including as a result of government mandated quarantine measures, business closures and suspensions and travel restrictions, and any related health issues of such personnel, including key executives. Disruptions to commercial activity relating to the imposition of quarantines or travel restrictions (or more generally, a failure of containment efforts) will adversely impact investments of KKR Funds and Other Clients, including by delaying or causing supply chain disruptions or by causing staffing shortages. Any of foregoing could materially and adversely affect the ability of KKR Funds and Other Clients to source, manage and divest their investments and their ability to fulfill their investment objectives. Similar consequences could arise with respect to other comparable infectious diseases. The outbreak of COVID-19 has contributed to, and will likely continue to contribute to, volatility in financial markets, including changes in interest rates. COVID-19 and other outbreaks like it have negative impacts on economic fundamentals and consumer confidence, increase the risk of default of particular portfolio companies, reduce the availability of debt financing to KKR Funds and Other Clients and potential purchasers of their portfolio companies, negatively impact market values, cause credit spreads to widen, and impair liquidity and capital resources, all of which would be expected to have an adverse effect on the returns of KKR Funds and Other Clients. No assurance can be given as to the effect of these events on the value of KKR Funds’ and Other Clients’ investments. The impact of a public health crisis such as COVID- 19 (or any future pandemic, epidemic or other outbreak of a contagious disease) is difficult to predict, which presents material uncertainty and risk with respect to the performance of KKR Funds and Other Clients. Subsequent to December 31, 2019, economic and financial market conditions have significantly deteriorated as compared to the quarter ending December 31, 2019. The assets under management disclosed in KKR’s Form ADV, which is as of December 31, 2019, does not take into account these subsequent events, the effects of which KKR expects will be adverse on the investment performance of KKR Funds and Other Clients. KKR values investments by reference to one or more inputs and methodologies, including, to the extent applicable, public and private market quotations for the investment, public and private market quotations for assets the value of which can serve as a reference to the value of the investment, discounted cash flow analysis, valuations at multiples of specific financial measurements (e.g., EBITDA) based on multiples at which comparable companies trade, and estimates of the fair value of the assets and liabilities on an entity’s balance sheet. As an example of how these inputs could impact the investment performance of KKR Funds and Other Clients and the assets under management of KKR, to the extent that KKR determines the value of an investment in whole or in part by reference to public market valuations, KKR expects these investment values to be negatively impacted by recent market events and the assets under management of KKR to be reduced accordingly.

Foreign Direct Investment Considerations including CFIUS Certain investments by KKR Funds and Other Clients that involve the acquisition of a business connected with or related to national security or critical infrastructure could be subject to review and approval by the U.S. Committee on Foreign Investment in the United States (“CFIUS”) and/or non-U.S. national security/investment clearance regulators depending on the beneficial ownership and control of interests in the KKR Fund or Other Client. In the event that CFIUS or another regulator reviews one or more of a KKR Fund’s or Other Client’s proposed or existing investments, there can be no assurances that the KKR Fund or Other Client will be able to maintain, or proceed with, such investments on terms acceptable to the KKR Fund or Other Client. CFIUS or another regulator could seek to impose limitations on or prohibit one or more investments of the KKR Fund or Other Client. Such limitations or restrictions might prevent a KKR Fund or Other Client from maintaining or pursuing investments or reduce the number of potential purchasers of existing investments of KKR Funds or Other Clients, which could adversely affect the performance of a KKR Fund or Other Client with respect to such investments. In addition, non-U.S. investors in KKR Funds and Other Clients comprise or are likely to comprise a substantial portion of the aggregate capital commitments of a KKR Fund or Other Client, which increases both the risk that investments could be subject to review by CFIUS, and the risk that limitations or restrictions will be imposed by CFIUS or other non-U.S. regulators on the portfolio investments of KKR Funds or Other Clients. In the event that restrictions are imposed on any investment by a KKR Fund or Other Client due to the non-U.S. status of an investor or group of investors or other related CFIUS or national security considerations, KKR could choose to restrict such investor’s or such group of investors’ ability to invest in or receive information with respect to any such portfolio investment or cause the investor to withdraw from a KKR Fund or Other Client. However, there can be no assurance that any restrictions implemented on any such investor or any such group of investors will allow KKR Funds or Other Clients to maintain, or proceed with, any investment. Investments through Offshore Holding Companies KKR Funds and Other Clients are permitted to invest in portfolio companies operating in a particular country indirectly through holding companies organized outside of such country. Government regulation in the first country from time to time, however, restricts the ability of the portfolio companies to pay dividends or make other payments to a foreign holding company. Additionally, any transfer of funds from a holding company to its operating subsidiary, either as a shareholder loan or as an increase in equity capital, is from time to time subject to registration with or approval by government authorities in such country. Such restrictions could materially and adversely limit the ability of any foreign holding company in which KKR Funds or Other Clients invest to grow or make investments or acquisitions that could be beneficial to its businesses, pay dividends, or otherwise fund and conduct its business. Regulatory Approvals and Government Licenses Portfolio companies in certain jurisdictions are dependent upon the grant, renewal or continuance in force of appropriate contracts, licenses, permits and regulatory approvals and consents which are generally valid only for a defined time period, subject to limitations or provide for withdrawal in certain circumstances. There can be no assurance that a portfolio company targeted by a KKR Fund or Other Client will be able to (i) obtain all such required regulatory approvals and licenses that it does not yet have or that it will require in the future; (ii) obtain any necessary modifications to existing regulatory approvals and licenses; or (iii) maintain required regulatory approvals and licenses. Delay in obtaining or failure to obtain and maintain in full force and effect any regulatory approvals and licenses, or amendments thereto, or delay or failure to satisfy any regulatory conditions or other applicable requirements could prevent operation of a facility owned by a portfolio company, the completion of a previously announced acquisition or sales to third parties, could limit the portfolio company’s ability to engage in certain regulated activities or could otherwise result in additional costs to a portfolio company. Additionally, governments and other regulators often impose conditions on the operations and activities of a portfolio company as a condition of granting its approval or to satisfy regulatory requirements. Such conditions, which could be statutory or commercial in nature, could limit a portfolio company’s ability to invest in competing industries or acquire significant market power in a particular market, or provide a disincentive to do so. Further, governmental agencies from time to time impose conditions of ongoing ownership or equivalent requirements on a portfolio company in respect of underlying projects. This could include a requirement that certain assets remain managed by a portfolio company, a KKR Fund or Other Client or their affiliates in the absence of further approval. Such conditions are susceptible to revision or cancellation and legal redress could be uncertain or delayed. There can be no assurance that joint ventures, licenses, license applications or other legal arrangements will not be adversely affected by the actions of government authorities or others and the effectiveness of and enforcement of such arrangements cannot be assured (see also Infrastructure Investments – “Government and Agency Risk,” and “Concessions, Leases and Public Ways” below). Subscription Facilities; Guarantees; Contractual Obligations Certain KKR Funds obtain one or more revolving credit facilities (“subscription facilities”). Subscription facilities of KKR Funds are expected to be used by KKR Funds to make investments, or otherwise in connection with the making, holding or disposition of investments, including, without limitation, to support ongoing operations and activities of KKR Funds’ portfolio companies and entities through which investments are directly or indirectly held (including on an aggregated basis with co-investors or other investors and/or related investment vehicles) and in order to enable KKR Funds to pay management fees or other fund expenses and liabilities. Borrowings (including subscription facilities) are permitted to be entered into on a joint and several or cross-collateralized basis with, or for the benefit of any alternative vehicles or other parallel fund of a KKR Fund or their respective direct or indirect portfolio companies or other entities in or through which investments are directly or indirectly held, including on an aggregated basis with co-investors or other investors and/or related investment vehicles (and any of the foregoing are generally permitted to be added as an additional borrower under a KKR Fund’s subscription facility), in which case such KKR Fund’s assets (including unused capital commitments) would be available to satisfy the liabilities and other obligations of any such vehicles, companies or other entities. In addition, investors in KKR Funds could be required to recontribute funds previously distributed by a KKR Fund in the event that the KKR Fund’s assets are insufficient to satisfy such liabilities and obligations. KKR Funds are also permitted to pledge their assets (including unused capital commitments), grant security interests in, liens on and otherwise encumber such assets and expect to guarantee loans and other extensions of credit and otherwise provide credit support with respect to the indebtedness of others (including portfolio companies and entities through which investments by the KKR Fund are directly or indirectly held) for the above purposes. In certain cases, KKR parallel funds established to invest alongside a KKR Fund will not hold a closing or call capital until the final closing of the KKR Fund. Such KKR parallel funds will, however, receive an allocation of any investments made by the KKR Fund prior to its final closing based on their uncalled commitments. KKR parallel funds will therefore benefit from borrowings by the KKR Fund under its subscription facility, which could in certain cases have funded these investments. Aside from an allocable portion of interest expenses, such KKR parallel funds will not bear any other costs and expenses incurred by the KKR Fund in connection with these borrowings or in connection with establishing the subscription facility, including without limitation any associated legal costs or expenses. If a KKR Fund obtains a subscription facility, it is generally expected that the KKR Fund’s interim capital needs and any capital needs prior to the KKR Fund’s final closing date will be satisfied through borrowings by the KKR Fund under the subscription facility, and drawdowns of capital contributions by the KKR Fund, including those used to pay interest on subscription facilities, will generally be expected to be “batched” together into larger, less frequent capital calls (although actual timing and amounts will vary). Although there are typically limitations regarding the time borrowings by KKR Funds under subscription facilities that are permitted to remain outstanding, there are generally no limitations on the amount of time guarantees by KKR Funds or borrowings of portfolio companies or entities through which portfolio investments are directly or indirectly held (including on an aggregated basis as described above) that are permitted to remain outstanding. The interest expense and other costs of any such borrowings and guarantees will be KKR Fund expenses and, accordingly, would decrease net returns of KKR Funds. It is expected that interest will accrue on any such outstanding borrowings at a rate lower than the KKR Funds’ preferred returns (with the preferred returns beginning to accrue when capital contributions to repay borrowings are actually mad please register to get more info

Except as described below, neither KKR nor any of its executive officers, members of its investment committees or portfolio management committees or other “management persons” as defined in Form ADV has been subject to legal or disciplinary events related to this Item.

On June 29, 2015, without admitting or denying the SEC’s findings, KKR consented to the entry of an order to cease and desist from committing or causing any violations and future violations of sections 206(2) and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder. According to the SEC order, during the period from 2006 to 2011 KKR did not expressly disclose in its flagship private equity fund limited partnership agreements that it did not allocate broken deal expenses to KKR co-investment vehicles (including co- investment vehicles established for third party co-investors and co-investment vehicles established for executives, certain consultants and others) and this lack of disclosure resulted in a misallocation of expenses to KKR’s flagship private equity funds for that period. The order also finds that KKR did not adopt and implement a written compliance policy or procedure governing its fund expense allocation practices until 2011. KKR agreed in the settlement to pay disgorgement of $14,165,968, prejudgment interest of $4,511,441 and a civil monetary penalty of $10,000,000.

In the ordinary course of business, KKR and its affiliates are parties to litigation, investigations, inquiries, employment-related matters, disputes and other potential claims. Additional information regarding such matters will also be made available in current public filings with the SEC for the Public Company. For further information, please see: http://ir.kkr.com/kkr_ir/kkr_sec.cfm. please register to get more info

Affiliated Broker-Dealers
KKR is an affiliate of KKR Capital Markets LLC and MCS Capital Markets LLC, each of which is registered as a broker-dealer in the U.S. with the SEC and the Financial Industry Regulatory Authority, Inc. (“FINRA”). KKR is also affiliated with: KKR Capital Markets LLP located in London, which is authorized and regulated by the U.K. Financial Conduct Authority to conduct broker-dealer activities in the United Kingdom; KKR Capital Markets (Ireland) Limited located in Dublin, which is authorized and regulated by the CBI to conduct broker-dealer activities in Ireland; KKR Capital Markets Japan Limited, which is a certified Type I and Type II Financial Instruments Business Operator (broker-dealer) licensed by the Japanese Financial Services Agency; KKR Capital Markets Asia Limited, which is licensed by the Hong Kong Securities and Futures Commission to conduct certain broker-dealer activities; and KKR Capital Markets India Private Limited, which is licensed by the Securities and Exchange Board of India (“SEBI”) as a merchant bank that is authorized to execute capital market mandates, underwrite issues, offer investment advisory and other consultancy services in connection with securities. KKR is also affiliated with KKR Australia Pty Limited, KKR Australia Investment Management Pty Limited, KKR MENA Limited, and KKR Saudi Limited, which hold financial services licenses from the Australian Securities and Investment Commission, and the Dubai Financial Services Authority and the Capital Market Authority in Saudi Arabia, respectively, permitting them among other things to conduct capital raising and other broker- dealer activities (collectively, the “Affiliated Brokers”). Affiliated Brokers (including their respective related lending vehicles) manage or otherwise participate in underwriting syndicates and/or selling groups with respect to the securities and debt instruments of portfolio companies and other non-controlled entities in or through which KKR Funds or Other Clients invest, including in respect of securities or other instruments of such portfolio companies in which KKR Funds or Other Clients have not invested and with respect to securities and other instruments held directly or indirectly by certain co-investment vehicles. Affiliated Brokers are otherwise involved in the public or private placement of such securities and other instruments, and/or the provision of capital markets advisory services to portfolio companies and other non-controlled entities in or through which KKR Funds or Other Clients invest, including in connection with mergers, acquisitions and restructurings; and will alone, or with other counterparties, which might include other KKR investment vehicles, third party banks or other unaffiliated finance providers, provide acquisition financing, lines of credit, bridge financing, hedging and other corporate lending or financing products and services to such entities in addition to financing provided through a KKR Fund or Other Client’s investment. Affiliated Brokers also provide loans and lines of credit or bridge financing to KKR Fund’s and Other Client’s portfolio companies through the Affiliated Brokers’ respective related lending vehicles. In addition, Affiliated Brokers alone or with other lenders (including other KKR entities), arrange lines of credit to portfolio companies and other non-controlled entities in or through which KKR Funds, Other Clients and other third party borrowers invest. Such financing and underwriting services could also be provided to a third party in which a KKR Fund or Other Client (or portfolio company) invests. Affiliated Brokers also provide syndication services to such entities including in respect of co-investments in transactions participated in by KKR Funds or Other Clients. Affiliated Brokers will generally receive fees, including underwriting, placement, syndication fees, transaction fees, commissions, underwriting discounts, interest payments and other compensation, which could be payable in cash or securities, in respect of the activities described above. Affiliated Brokers from time to time waive such fees.

Affiliated Brokers and other KKR entities will, as a consequence of such activities, from time to time hold positions in instruments or securities issued by portfolio companies, including, for example, where a KKR proprietary entity commits to fund the shortfall amount, if any, resulting from the incomplete syndication by an Affiliated Broker of a portfolio co-investment opportunity. Under such circumstances, a KKR proprietary entity will commit to provide capital support for the syndication on a short-term basis (i.e., to provide certainty to KKR Funds and Other Clients that there will be sufficient capital to complete the proposed transaction) or fund a different instrument or security in the portfolio company than that held by KKR Funds and Other Clients to facilitate the syndication, which KKR proprietary entities in either scenario sell down prior to KKR Funds or Other Clients disposing of their respective investments in the portfolio company.

An Affiliated Broker also from time to time serves as placement agent or underwriter of securities of a third party that a KKR Fund or Other Client purchases (for example, a co-investment vehicle). An Affiliated Broker could serve as the placement agent for a KKR Fund or Other Client in certain jurisdictions where it does not generally receive compensation for such service; however if compensation is received, such compensation would be made on a fully disclosed basis. The Affiliated Brokers do not otherwise execute transactions on behalf of KKR Funds or Other Clients. While fees, commissions, including upfront placement fees, and financing fees, commissions, interest payments and other compensation paid to Affiliated Brokers are generally believed by KKR to be reasonable and charged at market rates for the relevant activities, such compensation is generally determined through negotiations with related parties. KKR Funds or Other Clients generally do not have the right to share in the compensation received by an Affiliated Broker for its role in any transaction. Affiliated Brokers do not share in any transaction fees, which are generally allocated among KKR Funds, Other Clients and KKR Associates Vehicles as discussed in Item 5. The relationship KKR has with its Affiliated Brokers gives rise to a potential conflict of interest between KKR and KKR Funds or Other Clients that have an interest in any portfolio companies or investment vehicles with respect to which the Affiliated Brokers provide services (please see the discussion below for further information as to how such conflicts are addressed). In particular, KKR could be seen as incentivized to seek to influence the decision by a portfolio company’s management to retain an Affiliated Broker, or to borrow from or otherwise transact with an Affiliated Broker, instead of other unaffiliated broker-dealers or other service providers or counterparties that are more appropriate or offer better terms. Where an Affiliated Broker (or another KKR entity) acts as a lender to a portfolio company in which a KKR Fund or Other Client holds investments in the same or different levels of the capital structure, the arrangement will in certain cases lead to a conflict of interest between the Affiliated Broker and the KKR Fund or Other Client in the event of a default by, or the liquidation of, the portfolio company or a restructuring or renegotiation of the terms of the loan (similar conflicts also arise where KKR is a lender to a portfolio company out of its proprietary assets). In circumstances, including without limitation, where a portfolio company becomes distressed and the participants in the relevant offering have a valid claim against the underwriter, the participating KKR Fund or Other Client will have a conflict in determining whether to seek recourse or sue an Affiliated Broker. KKR could also be seen as incentivized to structure portfolio company transactions, including related co-investment opportunities, so that they require the use of a broker-dealer (and consequently provide an opportunity for an Affiliated Broker to be retained by a portfolio company or acquisition company established for the relevant transaction and generate fees, including underwriting, placement, syndication fees, transaction fees, commissions, underwriting discounts, interest payments or other compensation for such an Affiliated Broker).

Affiliated Brokers also provide financing and capital markets services to third parties that are not portfolio companies including third parties that are competitors of portfolio companies of particular KKR Funds or Other Clients, or that are service providers, suppliers, customers, or other counterparties with respect to such companies (“competitor companies”) and serve as placement agent in respect of investment funds that are sponsored and managed by other third party investment managers, including funds that compete with KKR Funds or Other Clients. Affiliated Brokers also act as placement agent in respect of investment funds that are sponsored and managed by third parties (for example, certain investee companies of KKR as described in Item 4) and receive consideration for such services. In providing such services to, or with respect to, such funds or companies, Affiliated Brokers will not take into consideration the interests of the relevant portfolio companies or KKR Funds or Other Clients. In addition, Affiliated Brokers are also from time to time engaged to provide financing or other capital markets services to third parties in connection with transactions that would also potentially be appropriate for a KKR Fund or for Other Clients. In some cases, these services offered to third parties in connection with a transaction are provided concurrently with services being provided in a similar manner to a KKR Fund or Other Client even if the KKR Fund or Other Client has a competing interest with the third party. Affiliated Brokers providing services to third parties, including to competitor companies, will from time to time come into possession of information that they are prohibited from acting on (including on behalf of a KKR Fund or Other Client) or disclosing to KKR as a result of applicable confidentiality requirements or applicable law, even though such action or disclosure would be in the best interests of a KKR Fund or of Other Client.

An Affiliated Broker’s ability to receive commissions or other transactional compensation in certain capital markets transactions on the basis of a KKR Fund’s or Other Client’s participation is limited in certain circumstances. As a result, in the event that such services are provided to an issuer that is or becomes a potential investment opportunity for a KKR Fund or Other Client, KKR, through the Affiliated Brokers, will, in certain cases, have a conflict of interest between a KKR Fund or Other Client investment opportunity or a related capital markets transaction. Where an Affiliated Broker serves as underwriter with respect to a security in which a KKR Fund or Other Client invests, such KKR Fund or Other Client will sometimes be subject to a “lock-up” period following the offering under applicable regulations during which time its ability to sell the security that it continues to hold is restricted. Under certain circumstances, this will adversely affect the KKR Fund’s or Other Clients’ ability to dispose of such security at an opportune time. Affiliated Brokers will from time to time have access to confidential and/or material non- public information regarding KKR Funds, Other Clients or their portfolio companies and, subject to applicable law and confidentiality agreements, are permitted to use such information in connection with financing and other services provided by the Affiliated Brokers. Transactions involving a KKR Fund or Other Client and an Affiliated Broker are reported periodically to KKR’s Global Conflicts Committee. In addition, KKR reviews such transactions to ensure that the requirements of Section 206(3) of the Advisers Act in respect of principal transactions between any KKR Fund or Other Client and KKR or its affiliates (including any Affiliated Broker) are complied with in the context of such transactions. Other Investment Advisers Relying Advisers KKR, either directly or indirectly, owns and controls the following subsidiaries, which are located in the United Kingdom, Hong Kong, China, Japan, France, Australia, India, Singapore, Dubai, Saudi Arabia, South Korea, Mauritius, Spain, Mexico, Canada, Luxembourg, Germany and the U.S.:


• Kohlberg Kravis Roberts & Co. Partners LLP


• KKR Asia Limited


• KKR Investment Consultancy (Beijing) Company Limited


• KKR Investment Advisory (Shanghai) LLC


• KKR Japan Limited


• Kohlberg Kravis Roberts & Co. SAS


• KKR Australia Pty Limited


• KKR Australia Investment Management Pty Limited


• KKR India Advisors Private Limited


• KKR Singapore Pte. Ltd.


• KKR MENA Limited


• KKR Saudi Limited


• KKR Korea Limited Liability Corporation
• KKR Holdings Mauritius, Ltd. KKR Account Adviser (Mauritius), Ltd. KKR Investment Management LLC
• Kohlberg Kravis Roberts (España) Asesores SL
• KKR Canada ULC
• KKR Investment Advisory (Zhuhai Hengqin) Company Limited
• KKR Real Estate Finance Manager LLC KKR Financial Management LLC


• KKR Luxembourg S.à.r.l.


• Kohlberg Kravis Roberts GmBH


• KKR de México, S.C.

Each of the above subsidiaries (“Relying Advisers”) is involved in identifying and monitoring investments recommended by KKR on behalf of KKR Funds or Other Clients in the relevant jurisdictions or regions. The Relying Advisers are subject to KKR’s regulatory oversight and its Code of Ethics (please see Item 11 below) together with its other compliance policies and procedures as adopted pursuant to the requirements of the Advisers Act (in addition to local regulatory requirements, as applicable, and any additional compliance policies and procedures adopted by the Relying Advisers pursuant to such local regulatory requirements). More particularly, KKR treats all Employees of the Relying Advisers as its “associated persons” and access persons for the purposes of the Advisers Act.

KKR Credit

KKR is also affiliated with KKR Credit Advisors (US) LLC, which is separately registered as an investment adviser under the Advisers Act. KKR is also affiliated with KKR Credit Advisors (Ireland), which is regulated by the CBI, and KKR Credit Advisors (EMEA) LLP, which is regulated by the UK Financial Conduct Authority. Certain executives of KKR serve on investment committees established by KKR Credit (as defined in Item 4). In addition, certain executives of KKR Credit participate in investment decisions or serve on investment committees established by KKR for particular KKR Funds or Other Clients. KKR also, from time to time, serves as sub-adviser in respect of capital allocated within investment vehicles and accounts managed and advised by KKR Credit (“KKR Credit Funds”). KKR also delegates sub-advisory authority to KKR Credit in respect of capital allocated within certain KKR Funds to strategies implemented by KKR Credit (in each case, at no incremental cost to the relevant KKR Fund or KKR Credit Fund). Please see Item 11 for a discussion of the relationship of KKR, KKR Funds, Other Clients, and KKR Credit Funds.

FS/KKR Credit BDC Advisor

On April 9, 2018, KKR Credit and FS Investments combined their respective BDC platforms through FS/KKR Advisor, LLC, which registered as an investment adviser with the SEC on April 2, 2018. FS/KKR Advisor provides investment advisory services to BDCs previously advised and sub-advised by KKR Credit, and BDCs previously advised by FS Investments. KKR Credit owns a 50% interest in FS/KKR Advisor. KKR Capstone In conjunction with the Reorganization described under Item 4 – “Ownership/Structure,” KKR acquired KKR Capstone on January 1, 2020. KKR Capstone executives became employees of KKR after KKR’s acquisition. Prior to the acquisition, KKR Capstone was owned and controlled by its senior management and was not a subsidiary or affiliate of KKR. KKR Capstone Japan Limited is licensed by the Tokyo Labor Bureau to conduct an employment placement business. For further information, please see also Item 5 “KKR Capstone, RPM and Other Consultants”. KKR Alternative Investment Management KKR is affiliated with the KKR AIM, which is regulated by the CBI, is an authorized EU alternative investment manager and separately files reports as an exempt reporting adviser with the SEC. KKR AIM enters into delegation and/or sub-advisory agreements with KKR under which KKR will provide certain portfolio management services to KKR AIM in connection with investment funds with respect to which KKR AIM serves as alternative investment manager for the purposes of the AIFMD.

Commodity Pool Operators and Commodity Trading Advisors

As a result of providing investment advisory services to certain KKR Funds that invest in commodity futures and other commodity interests, KKR, certain KKR GPs and other related entities could from time to time constitute or become commodity trading advisors and/or commodity pool operators for the purpose of the rules and regulations issued by the U.S. Commodity Futures Trading Commission (“CFTC”) under the U.S. Commodity Exchange Act and as such, will rely on certain exemptions from registration with the CFTC under that Act or, in the event that such exemptions cease to apply, register under the applicable regulatory regime. As such status is incidental to KKR’s investment management activities with respect to the relevant KKR Funds, KKR does not view such status as giving rise to a material conflict of interest in respect of such KKR Funds or any other KKR Funds. The CFTC has proposed but not adopted rules that could limit the total amount of hedging that investment funds controlled by a single corporate group are permitted to enter into. While these rules currently apply only to agricultural products, the CFTC could expand them to cover oil and gas which could materially adversely impact KKR private equity and energy funds. Pooled Investment Vehicles and Regulated Subsidiaries and Sponsors of Limited Partnerships

KKR, KKR Credit, and certain of their respective affiliates serve as sponsors or syndicators of a number of limited partnerships, including KKR Funds and KKR Credit Funds. KKR also primarily serves as investment adviser to KKR Funds that are pooled investment vehicles. In addition, its affiliate, KKR Credit also serves as investment adviser of investment vehicles and accounts (i.e., KKR Credit Funds) that are, for the most part, pooled investment vehicles. While primarily unregulated, certain of such pooled vehicles are registered with regulatory authorities in their home jurisdiction such as the Cayman Islands or Ireland or in jurisdictions in which interests in such pooled investment vehicles are marketed, such as Korea or Japan. As discussed more fully above and in response to Item 11, KKR Funds and KKR Credit Funds engage in transactions with or alongside each other that could give rise to conflicts of interest. KKR and KKR Credit have adopted investment allocation policies and procedures and conflicts of interest policies and procedures designed to facilitate the proper management of conflicts of interest arising between KKR Funds and KKR Credit Funds. KKR and certain KKR Funds have established regulated subsidiaries as required under applicable law in order to permit such subsidiaries or KKR Funds to make portfolio investments in certain jurisdictions. Dual Officers and Employees Certain employees of KKR, including investment and marketing professionals, are also associated persons of one or more Affiliated Brokers (“Dual Personnel”). In this capacity, Dual Personnel are shared with and provide services to KKR and also provide services to one or more affiliated entities. Dual Personnel provide investment advisory services to KKR Funds and Other Clients, participate in the marketing of KKR Funds and KKR Credit Funds, and, in certain cases, participate in the capital markets activities of Affiliated Brokers. The potential conflicts of interest discussed above in relation to Affiliated Brokers are more acute when investment professionals of KKR participate in the capital markets activities of Affiliated Brokers with respect to assets held by KKR Funds and Other Clients. In particular, when Dual Employees provide investment advisory services with respect to investments that are suitable for KKR Funds and Other Clients, but that also are syndicated to third-party investors by an Affiliated Broker. The compensation of Dual Personnel that provide services to multiple entities is based on a number of factors, which include, without limitation, the profitability of the affiliated entities, the performance of client accounts at the affiliated entities, and the amount of assets under management at the affiliated entities. Such Dual Personnel could be incentivized to allocate more of their time and attention to more profitable affiliated entities, which creates a conflict of interest. In addition, such Dual Personnel work with third-party clients who are interested in acquiring assets that KKR Funds or Other Clients are interested in acquiring. To mitigate these conflicts, KKR and the Affiliated Brokers maintain compliance policies and procedures designed to ensure that such investment opportunities are made available to advisory clients before they are syndicated to third parties, and that the compensation of Dual Personnel is not structured in a manner that favors services provided to third parties over those provided to KKR Funds or KKR Credit Funds and Other Clients. Conflicts are further mitigated by each such Dual Personnel’s responsibility to (i) be subject to the supervisory oversight of each affiliated entity when acting on its behalf, and (ii) render services in the client’s best interest pursuant to KKR’s Code (as defined in Item 11).

Other Businesses

KKR Funds have acquired a controlling interest in Avendus Capital Private Limited (together with its wholly-owned subsidiaries, “Avendus”), which KKR and/or its affiliates could be deemed to control due to their control of such KKR Funds. Avendus engages in investment banking, private wealth management and alternative asset management primarily in India and Southeast Asia. On March 30, 2017, KKR’s Indian capital markets and credit asset management businesses were reorganized to create a new parent company, KKR India Financial Services Pte. Ltd., domiciled in Singapore (“KIFL”), through which KKR Capital Markets India Private Limited (“KCM India”) and KKR India Financial Services Private Limited (“NBFC I”) are now held. KKR has a significant equity interest in KIFL. KKR separately holds an equity interest in KKR India Asset Finance Private Limited (“NBFC II”). NBFC I and NBFC II are each registered by the Reserve Bank of India as non-deposit taking, non- banking financial companies (“NBFCs”) and are authorized to undertake lending and financing activities in India. NBFC I is primarily focused on corporate lending in India, whereas NBFC II is primarily focused on real estate debt investments in India. KCM India is licensed by the SEBI: (i) as a foreign portfolio investor or foreign venture capital investor to make investments in Indian securities; (ii) as a merchant bank that is authorized to execute capital market mandates, underwrite issues, offer investment advisory and other consultancy services in connection with securities; and (iii) as investment manager and sponsor of alternative investment funds established in India that have raised capital from Indian institutional and fund investors. In addition, a KKR affiliate has acquired an interest in an “asset reconstruction company” in India which sources, services and/or resolves performing or non-performing loans and provides services relating to loan administration, loan or asset resolution, restructuring and reconstruction. Please refer to Item 11 for a discussion of the potential conflicts raised by KKR’s relationship with these and other affiliates and the policies and procedures KKR has adopted to address these conflicts. Please also refer to Item 11 for a discussion of Stakes and Seed Managers and Stakes and Seed Funds. please register to get more info

Code of Ethics
KKR has adopted a Code of Ethics (the “Code”) in accordance with Rule 204A-1 under the Advisers Act. The policies and procedures set forth in the Code recognize that as an investment adviser, KKR is in a position of trust and confidence with respect to the KKR Funds and Other Clients and has a duty to place the interests of the KKR Funds and Other Clients before the interests of KKR and its Employees (which for these purposes includes other persons as set out in the Code, including certain consultants, advisors, temporary employees and other persons). This duty includes an obligation to address or mitigate both conflicts of interest and the appearance of any conflicts of interest. The Code also recognizes that as an investment adviser registered under the Advisers Act, KKR has a further obligation to comply with the provisions of the Advisers Act as well as the other U.S. federal securities laws.

The Code includes a code of conduct adopted by KKR which requires Employees to: (i) act with integrity, honesty, competence, and in an ethical manner when dealing with the public, regulators, clients, investors, prospective investors and their fellow Employees; (ii) adhere to the highest standards with respect to any potential material conflicts of interest with KKR Funds and Other Clients; and (iii) preserve the confidentiality of information that they obtain in the course of KKR’s business and use such information properly, consistent with applicable legal standards and not in any way adverse to the interests of any KKR Funds or Other Clients.

Under the Code and Firm policy, Employees are prohibited from trading in securities of any company while in possession of material, non-public information regarding the company. This prohibition applies to KKR- related securities and the securities of KKR affiliates, as well as other issuers. The Code also includes a personal securities investment and reporting policy. This policy, among other things, significantly restricts an Employee’s ability to engage in personal securities transactions with respect to publicly-traded equity or debt of corporate issuers to avoid the potential misuse of material non-public information with respect to such issuers. The policy also requires preclearance of investments in private companies and non-KKR Funds, and requires Employees to disclose all brokerage or securities accounts held in the Employee’s name or over which the Employee has any direct or indirect beneficial ownership, including accounts over which investment discretion is exercised either directly or indirectly.

Certain investment personnel of KKR also maintain personal private investment holdings, which from time to time include investments in private companies and assets that are owned or become targeted for acquisition by KKR or KKR Funds or Other Clients (or investments in private companies or assets that compete with assets or businesses owned or targeted by KKR Funds or Other Clients) and/or private funds that invest in or own private companies or other issuers or assets that compete with assets or businesses owned or targeted by KKR Funds or Other Clients (i.e., through the acquisition of or investment in an asset of an affiliated or unaffiliated private fund sponsor). Certain of these personal investments are maintained with third-party investment managers, including third-party investment managers or sponsors that KKR or its affiliates, KKR Funds or Other Clients have an economic interest in, who sponsor investment vehicles that compete with KKR or KKR Credit, or that KKR, KKR Credit or their respective affiliates will from time to time recommend to their respective clients (for example, through KKR’s customized portfolio solutions business). Furthermore, certain of these personal investments will have terms that are more favorable than those routinely offered by the unaffiliated investment manager (for example, reduced fees). These personal investments could give rise to potential or actual conflicts of interest between KKR Funds and Other Clients on the one hand, and KKR, KKR Credit and their respective affiliates, on the other hand. In addition, KKR personnel will at times hold investments in entities that are or become service providers to KKR or portfolio companies of KKR Funds or Other Clients. Although the relevant KKR personnel might not have control or other influence over the decisions of the relevant service provider (including whether to enter into a business arrangement with KKR or portfolio companies of KKR Funds or Other Clients), a conflict of interest or the perception thereof could nevertheless arise in engaging the relevant entity as a service provider in light of the personal benefits that accrue through the investment they hold in the service provider. KKR’s personal securities investment and reporting policies, which require the pre- approval from KKR’s Compliance Group on any personal private fund or private investments, seek to address any potential or actual conflicts of interest relating to personal private investments. The Code restricts Employees’ ability to conduct activities outside the Firm that conflict with the interests of the KKR Funds or Other Clients, requires pre-approval for Employees to engage in certain outside business activities or receive and/or provide gifts and entertainment in excess of certain values, and restricts Employees’ ability to make political donations. However, Employees, Senior Advisors, Industry Advisors, KKR Advisors, RPM and other Consultants from time to time also serve as directors or interim executives, or otherwise be associated with companies that are competitors of portfolio companies of certain KKR Funds or Other Clients (as discussed below).

KKR’s Compliance Group receives and reviews trading and other reports and Employee certifications, questionnaires and pre-approval requests submitted pursuant to the Code to determine that personal trading (as well as other activities subject to compliance oversight) conducted by Employees and other covered persons is consistent with the requirements and restrictions set forth in the Code. Employees also engage in outside business activities, including serving on boards of directors of third party entities, which give rise to certain conflicts of interests. KKR’s Compliance Group reviews Employee certifications, questionnaires and pre-approval requests to identify such conflicts of interest.

Additionally, KKR has adopted inside information barrier and other policies and procedures to provide for the proper handling of confidential information (i.e., non-public information received or created by KKR in connection with its activities) and to prevent violations of laws and regulations prohibiting the misuse of such information and to avoid situations that might create an appearance of such misuse. KKR’s Compliance Group is responsible for establishing and administering the information barriers established by KKR.

The Code is available upon written request of KKR Funds or Other Clients and their current or prospective investors.
Participation or Interest in Client Transactions

Principal Transactions

In accordance with the anti-fraud provisions of the Advisers Act and with KKR’s internal compliance policies and procedures, KKR and its affiliates will not, as principal, sell a security to, or buy a security from, any KKR Fund or Other Client, without providing appropriate disclosure and obtaining the informed consent of such KKR Fund or Other Client prior to the settlement of such transaction. Principal transactions occur, for example, where KKR warehouses an investment, in whole or in part, in one of its proprietary entities for the benefit of one or more KKR Funds or seeds the initial portfolio of a KKR Fund by making the initial commitment and capital contributions to the KKR Fund pending the admission of third party investors to such KKR Fund and the acquisition by the KKR Fund of the investment from the proprietary entity or the participation by such third party investors in such seeded initial portfolio of investments, as applicable. In these cases, a KKR Fund or Other Client will, for example, require that (i) the transaction price be determined to be fair by an independent valuation expert (the cost of which would be borne by the KKR Fund or Other Client) or be calculated in accordance with a formula provided for in the governing documents of the KKR Fund; and/or (ii) the consent of the respective KKR Fund’s limited partner advisory committee, independent client representative or investors, or the consent of the Other Client, be obtained prior to the completion of the relevant transaction or in connection with the investors’ subscriptions to the KKR Fund or the establishment of the Other Client relationship. For warehoused assets, the consent to transfer such assets to KKR Funds or Other Clients is generally obtained through the signed approval of the subscription agreement or limited partnership agreement of the KKR Fund or Other Client. As indicated in Item 10, Affiliated Brokers from time to time act as principal in underwriting or placing the securities of KKR Funds or Other Clients. Prior to the receipt by a KKR Fund of capital contributions from its investors for which a capital call notice has been given, a KKR GP will under certain circumstances fund such amounts on a temporary basis in order to permit the KKR Fund to ensure that an investment is made within the applicable time constraints. In addition, a KKR GP will, from time to time, fund certain general and administrative expenses of a portfolio company on a temporary basis in order to avoid a de minimis capital call to investors or to ensure timely payment of a KKR Fund obligation, or provide an interest free loan to a platform portfolio company to cover its start-up and operating costs prior to the receipt by a KKR Fund or Other Client of a capital call in respect of such expenses. Such amounts will be reimbursed to the KKR GP at cost as and when such capital contributions are made by the investors in the KKR Fund or through a reduction of subsequent distributions by the KKR Fund. KKR does not consider such temporary arrangements to be principal transactions. Stakes and Seed Managers and Stakes and Seed Funds

Affiliates of KKR acquire or hold from time to time a non-controlling interest in a third-party hedge fund manager or other type of manager (“Stakes and Seed Managers” and funds or other vehicles sponsored or advised by such managers are referred to herein collectively as “Stakes and Seed Funds”). For example, affiliates of KKR have acquired a 24.9% interest in BlackGold Capital Management LP, a credit-oriented investment manager focused on energy and hard asset investments, a 39.6% interest in Marshall Wace LLP, a global alternative investment manager specializing in long/short equity products, and a 39.9% interest in PAAMCO Prisma Holdings LLC (“PAAMCO Prisma”), a liquid alternatives firm. Affiliates of KKR also have investments in certain real estate managers, such as Drawbridge Realty, and certain infrastructure investment managers, such as the investment manager of India Grid Trust. No Stakes and Seed Fund is an advisory client of KKR. From time to time, a Stakes and Seed Manager is retained as a non-discretionary sub-adviser by KKR or KKR Credit in respect of certain KKR Funds, KKR Credit Funds or Other Clients. KKR and KKR Credit also, from time to time, act as a non-discretionary sub-adviser of a Stakes and Seed Manager and/or a Stakes and Seeds Fund, including in particular with respect to co-investments made alongside KKR Funds, KKR Credit Funds or Other Clients. For example, advisory affiliates of KKR and KKR Credit act as a sub-adviser with respect to capital allocated by investment vehicles and other accounts managed and advised by PAAMCO Prisma, and PAAMCO Prisma acts as investment adviser or sub- adviser to investment vehicles and other accounts established by KKR, KKR Credit and/or their advisory affiliates. Such transactions (which do not involve securities or KKR advisory clients on both sides of the transaction) are neither principal transactions nor agency cross transactions. However, because of a KKR affiliate’s financial interest in Stakes and Seed Managers, an affiliate of KKR will receive additional compensation related to such transactions. Such additional compensation will not be shared with KKR Funds, Other Clients or KKR Associates Vehicles. Also, certain Employees are charged no (or reduced) management or incentive fees by the Stakes and Seed Managers for their personal investments in Stakes and Seed Funds. For further information, please see also “Investments of Stakes and Seed Funds and Other Pooled Funds” below. Principal Transactions Relating to Net Profits Interests KKR has established an energy-focused KKR Fund that will enter into affiliated transactions with one or more KKR affiliates which involve the purchase, sale and/or sublease of investments from or to such KKR Fund. These transactions (“NPI Arrangements”) give rise to conflicts of interest between KKR on the one hand and such KKR Fund and its investors, and there can be no assurance that the terms of such transactions will be similar to those that would be obtained in an arms-length transaction between unaffiliated parties. In particular, the NPI Arrangements will result in such KKR affiliate retaining a 5% working interest, unburdened by any net profits interest held by such KKR Fund, in each asset in which such KKR Fund has invested, and there can be no assurance that the consideration exchanged between such KKR Fund and such KKR affiliate in connection with each NPI Arrangement will be of equal value. Such KKR affiliate could therefore profit from the NPI Arrangements at the expense of such KKR Fund. In addition, such KKR affiliate will make preferred capital contributions to such KKR Fund and will be entitled to receive distributions from such KKR Fund in priority to distributions made to the investors in such KKR Fund. As a result, such KKR Fund could generate a profit that is not realized by its investors. The investors in such KKR Fund have consented to the foregoing arrangements in connection with their subscription for interests in such KKR Fund. Accordingly, KKR does not make trade-by-trade disclosures or obtain client consent before the completion of such transactions.

Cross Transactions and Agency Cross Transactions

Agency cross transactions are transactions in which KKR arranges for a KKR Fund or Other Client to buy a security from, or sell a security to, another KKR Fund or Other Client. It is expected that KKR will, from time to time, cause different KKR Funds (or Other Clients) to invest at different times in a single portfolio company, for example, where a KKR Fund that made an initial investment in a portfolio company does not have sufficient capital to make a follow-on investment in the company when such an opportunity arises. It is also expected that from time to time KKR will determine that a cross transaction or follow-on investment between KKR Funds or Other Clients is in the best interest of the relevant KKR Funds or Other Clients. Agency cross transactions will create conflicts of interest in certain cases because KKR would have an incentive to improve the performance of one KKR Fund or Other Client by selling underperforming assets to another KKR Fund or Other Client, for example, to earn increased fees.

Accordingly, KKR has adopted a cross trades policy and procedures designed to properly manage related conflicts. In addition, the governing documents of KKR Funds or Other Clients generally impose certain restrictions on the ability of KKR or its affiliates to effect these transactions, unless client consent is obtained for such transactions in the manner set forth under such governing documents. Additional requirements under such governing documents also often include having the transaction price for such transactions determined using independent valuation sources, approved by an independent valuation expert, or otherwise determined to be fair to KKR Funds and Other Clients by an independent third party or calculated in accordance with the methodology set forth under such governing documents.

In addition, two or more portfolio companies in which a KKR Fund and/or Other Client, KKR proprietary vehicles and/or other persons (collectively, “Other Participants”) hold an interest from time to time will merge or otherwise enter into a business or asset combination transaction (such merged or combined companies, businesses or assets, the “Successor Company”). In such transactions, the KKR Fund and such Other Participants could have varying or no interests in certain of such portfolio companies participating in the merger or combination. Following such merger or combination, the KKR Fund and Other Participants will exchange securities issued by their existing portfolio companies, as applicable, for or otherwise hold or receive, securities in the Successor Company. If any of the portfolio companies involved in any such merger or business or asset combination (or their relevant businesses or assets) are under or over valued in connection with the merger or combination, a KKR Fund and or any of the Other Participants will receive too great or too small an interest in the Successor Company, which would adversely impact the KKR Fund and/or Other Participants receiving too small an interest and could otherwise be viewed as causing an indirect transfer of value between the KKR Fund and Other Participants. Notwithstanding such transfer of value, such merger or combination transactions generally will not constitute or otherwise be treated by the KKR Fund or Other Participants as principal or cross transactions that are subject to the restrictions applicable to principal or cross transactions pursuant to the governing documents of KKR Funds and Other Clients. Core Investments In addition to its traditional private equity and other private markets fund strategies, KKR and certain KKR Funds or Other Clients pursue a “core” private equity investment strategy that seeks to invest in businesses that have the potential to generate attractive risk-adjusted returns and net asset value appreciation over a longer time horizon than that of traditional private equity fund investments. While core investments also typically have a lower risk and return profile than traditional private equity investments, no single attribute is determinative and attributes of a particular core private equity investment could change over time. In addition, there could be overlap between core private equity investments and investments that fall within other strategies, such as infrastructure, real estate and energy. In 2017, KKR established core investment vehicles with capital commitments from fund investors and KKR’s Balance Sheet (described below) to make core investments in private equity and real asset opportunities globally. KKR has also more recently established or is in the process of establishing KKR Funds that pursue core investments in other private markets investment strategies, including real estate and infrastructure. Please see “KKR Purchases/Sales of Securities Recommended to KKR Funds and Other Clients – Proprietary Investments” below for further information regarding such investments. Real Estate Transactions

KKR (for its own account or the account of an affiliate, including through the core investment vehicles) could cause a KKR Fund or Other Client to, enter into real estate related transactions with KKR Fund or Other Client portfolio companies. Such transactions include, for example, buying or selling real estate assets, acquiring or entering into leasing arrangements or amending such arrangements, or transferring options or rights of first refusal to acquire real estate assets. None of the foregoing transactions, which generally do not involve securities, are governed by the principal transaction and cross transaction restrictions and policies described above but are subject to guidelines established by KKR to properly manage related conflicts.

Participation of Affiliated Broker-Dealers in KKR Fund or Other Client Transactions

As described in response to Item 10, KKR is affiliated with several broker-dealers. As noted in Item 10, these Affiliated Brokers (including their respective related lending vehicles) manage or otherwise participate in underwriting syndicates and/or selling groups with respect to securities and debt instruments issued by portfolio companies, holding companies and other controlled or non-controlled entities in or through which KKR Funds or Other Clients invest. Further, Affiliated Brokers are otherwise involved with the public or private placement of securities or debt instruments issued by a KKR Fund’s or Other Client’s portfolio companies and other controlled or non-controlling entities in or through which a KKR Fund or Other Client invests. Affiliated Brokers also provide capital markets advisory services to portfolio companies of KKR Funds or Other Clients and other controlled or non-controlling entities in or through which KKR Funds or Other Clients invest, including in connection with mergers, acquisitions and restructurings; and will alone, or with other counterparties, which might include other KKR investment vehicles, third party banks or other unaffiliated finance providers, provide acquisition financing, lines of credit, bridge financing, hedging and other corporate lending or financing products and services to such entities in addition to financing provided through a KKR Fund or Other Client’s investment. In addition, Affiliated Brokers arrange lines of credit for (i) portfolio companies and other controlled or non-controlled entities in or through which KKR Funds or Other Clients invest; (ii) KKR Funds; (iii) Other Clients; and (iv) other third parties. Affiliated Brokers (through their respective lending related vehicles) also provide loans and lines of credit or bridge financing to such entities. Affiliated Brokers, as a consequence of such activities hold positions in instruments and securities issued by a KKR Fund’s or Other Client’s portfolio companies (or controlled or non-controlled entities through which they invest) and from time to time engage in transactions that are also appropriate investments for a KKR Fund or Other Client. Subject to applicable law, Affiliated Brokers receive fees, including underwriting, placement, syndication and transaction fees, commissions, underwriting discounts, interest payments and other compensation, including compensation that is payable in cash or securities and not required to be shared with KKR Funds or Other Clients. In certain circumstances, where an Affiliated Broker is participating in underwriting and financing transactions, it does so as lead or sole arranger in which case it will be responsible for establishing the relevant fees and other payments charged to a KKR Fund’s or Other Client’s portfolio companies in which it invests. In addition, a KKR Fund or Other Client might not be able to participate in an offering or other transaction involving an existing portfolio company due to the Affiliated Broker’s involvement in such offering or other transaction. Where an Affiliated Broker serves as underwriter with respect to a portfolio company’s securities, the relevant KKR Fund, Other Client or portfolio company is sometimes subject to a “lock-up” period following the offering under applicable regulations or agreements during which time its ability to sell any securities that it continues to hold is restricted. This could adversely affect such KKR Fund’s or Other Client’s ability to dispose of such securities at an opportune time.

KKR has a conflicts of interest policy and procedures in place where transactions involving a KKR Fund or Other Client and an Affiliated Broker or its respective lending vehicles are appropriately reviewed and reported to KKR’s Global Conflicts Committee. In addition, KKR reviews such transactions to ensure that the requirements of Section 206(3) of the Advisers Act and Rule 206(3)-2 under the Advisers Act, as applicable, in respect of principal transactions between any KKR Fund or Other Client and KKR or its affiliates (including any Affiliated Broker) are complied with in the context of such transactions. Affiliated Brokers will from time to time have access to confidential and/or material non-public information regarding KKR Funds, Other Clients or their portfolio companies, and, subject to applicable law and confidentiality agreements, use such information in connection with financing and other services provided by the Affiliated Brokers.

Affiliated Brokers also provide investment banking, advisory and other services to affiliated or unaffiliated corporations, financial sponsors, management or other persons. Such services could relate to transactions that could give rise to investment opportunities that are suitable for KKR Funds or Other Clients. In such case, the Affiliated Broker’s particular client would typically require the Affiliated Broker to act exclusively on its behalf, thereby precluding KKR Funds or Other Clients from participating in such investment opportunities. No Affiliated Broker would be obligated to decline any such engagements in order to make an investment opportunity available to KKR Funds or Other Clients. In addition, Affiliated Brokers could come into the possession of information through these new businesses that limits a KKR Fund’s or Other Client’s ability to engage in potential transactions. Affiliated Brokers or KKR investment vehicles (including KKR proprietary Balance Sheet entities) will from time to time provide financing to a third party sponsor or its acquisition vehicle or to another company for the purposes of acquiring a portfolio company or an interest in a portfolio company from a KKR Fund. Although not limited to such arrangements, this type of financing will, for example, be provided through pre-arranged buyer financing packages arranged and offered by Affiliated Brokers or other KKR investment vehicles to potential bidders for the relevant portfolio company or interest. KKR will face conflicts of interest where any Affiliated Brokers or such other KKR investment vehicle provides such acquisition financing, in particular in respect of its incentives to select a bidder using such financing for the purposes of creating an investment opportunity for such Affiliated Brokers or other KKR investment vehicles and, potentially, related arranging fees for KKR affiliates. Any such financing arrangements will be subject to KKR’s policies and procedures for addressing conflicts. Financial Interest in KKR Fund, Portfolio Company or Other Client Transactions As described in Item 5, KKR and its affiliates receive monitoring fees, financial advisory fees, loan administrative agent fees, transaction fees, and other compensation for services provided to portfolio companies, holding companies and other entities in or through which a KKR Fund or Other Client invests. Such parties also receive breakup fees and other compensation with respect to KKR Fund or Other Client portfolio company investments (including unconsummated or terminated transactions). As noted above, such compensation often is shared with the relevant KKR Funds or Other Clients in the manner described in their offering materials, disclosure documents and/or governing documents.

Certain portfolio companies of KKR proprietary investments, KKR Funds or Other Clients are counterparties to, or participants in, agreements, transactions or other arrangements with portfolio companies of another KKR Fund or Other Client (for example a portfolio company of a KKR proprietary investment or KKR Fund has retained a company in which another KKR Fund has invested to provide loan administration or asset leasing services or products). Agreements, transactions, and other arrangements entered into by portfolio companies of KKR proprietary investments, KKR Funds or Other Clients will in certain instances indirectly benefit KKR, the relevant KKR Fund or Other Client as an investor in such companies, or adversely impact the KKR Fund’s or Other Client’s portfolio companies with which they do business. The interest of KKR, any KKR Fund or Other Client in maximizing its return on such investments gives rise to a conflict of interest, in particular, but not limited to, where KKR, the KKR Fund or Other Client has the ability through its investments to influence the activities of such companies or encourages portfolio companies of a KKR proprietary investment, KKR Fund or Other Client to transact therewith.

Such portfolio companies will also in certain cases compete with a KKR Fund’s or Other Client’s investments. For example, KKR (through its proprietary investment activities) or a KKR Fund is likely to invest in a company which competes with, is a customer of, or is a service provider or supplier to another KKR Fund portfolio company. In providing advice and recommendations to, or with respect to such portfolio companies’ business dealings, KKR, any KKR Fund, or Other Client are not obligated to and might not take into consideration the interests of the other relevant KKR Fund or Other Client or their portfolio companies and other investments. Accordingly, these circumstances give rise to certain potential conflicts of interest. A portfolio company of a KKR proprietary investment, KKR Fund or Other Client could also do something for commercial reasons that has adverse consequences for another KKR Fund or Other Client or its portfolio company, such as seeking to expand its market share at the expense of the other KKR Fund portfolio company, withdrawing business from the other KKR Fund portfolio company in favor of another company offering the same product or service at a lower price, increasing its own prices along with other enterprises in the industry, or commencing litigation against another KKR Fund’s portfolio company. KKR Funds or Other Clients also from time to time obtain confidential information regarding portfolio companies that they cannot act on or disclose to another KKR Fund or Other Client or their portfolio companies due to confidentiality requirements or applicable law, though such action or disclosure might be in the latter’s interests. Accordingly, such business dealings could result in adverse consequences to such other KKR Funds or Other Clients or their investments. In addition, portfolio companies of KKR proprietary entities, KKR Funds or Other Clients that provide financial services could enter into agreements, transactions or other arrangements with KKR, certain KKR proprietary entities, and Affiliated Brokers. For example, investments originated by KKR, certain KKR proprietary entities, or Affiliated Brokers could be sold to, purchased from, or distributed by a portfolio company that provides financial services. Agreements, transactions, and other arrangements entered into by a portfolio company that provides such financial services will directly or indirectly benefit KKR, KKR proprietary entities and Affiliated Brokers, or could adversely impact the relevant KKR Fund or Other Client with which they do business. The interest of KKR, the KKR proprietary entities or Affiliated Brokers in maximizing return on such investments gives rise to a conflict of interest, including, but not limited to, where KKR, the KKR proprietary entity or Affiliated Broker have the ability to influence or control the activities of the portfolio company that provides such financial services. KKR has established policies and procedures to address these conflicts, including policies and procedures designed to ensure that any fees paid to or received from such portfolio companies are negotiated at arms-length, and that any potential conflicts are disclosed.

Certain KKR proprietary entities and Affiliated Brokers, on behalf of their proprietary and client accounts, make investments in minority or majority interests in companies, businesses or other investments which are counterparties to or participants in agreements, transactions or other arrangements with portfolio companies of, a KKR Fund or Other Client. These include certain Platform Managers and Platform Arrangements, loan servicing and administrative services and proprietary RE Platforms described in detail in Item 5. In addition, portfolio companies of a KKR Fund are likely to retain companies in which KKR has a proprietary interest to provide services or products (please see Service Providers below) or acquire an asset from such company. KKR’s indirect ownership of KKR Capital Markets LLC (please see Item 10) is another example. Agreements, transactions and other arrangements entered into by KKR Fund or Other Client portfolio companies and any such companies will indirectly benefit KKR as an owner of such companies or could adversely impact any KKR Fund or Other Client portfolio companies with which they do business. KKR’s interest in maximizing its return on such investments will give rise to a conflict of interest, in particular, but not limited to, where KKR has the ability through its investments to influence the activities of such companies or encourages portfolio companies of KKR Funds or Other Clients to transact with such companies. Transactions between companies in which KKR (or any of its affiliates or personnel) acquires such proprietary interests, on the one hand, and KKR Funds or Other Clients or their respective portfolio companies, on the other, are generally not expected to constitute the types of transactions that will entitle such companies to fees or other compensation that will reduce management fees payable by the KKR Fund or Other Client. For example, insurance brokerage fees or IT licensing fees payable by a KKR Fund portfolio company to an affiliate of KKR for related services of an affiliate of KKR will not reduce management fees, but will benefit the KKR affiliate. Similarly, fees paid to Platform Managers, Asset Servicers or loan servicers in which KKR and its affiliates have an interest will not reduce management fees.

Certain KKR proprietary entities and Affiliated Brokers, on behalf of their proprietary and client accounts, are likely to make investments in companies, businesses or other investments that compete with a KKR Fund’s or Other Client’s investments. For example, KKR or its affiliates could invest in a company which competes with a KKR Fund’s portfolio company. In providing advice and recommendations to, or with respect to such investments and in dealing in such investments on behalf of the relevant proprietary or client accounts, KKR and its affiliates will not take into consideration the interests of the relevant KKR Fund or Other Client or their portfolio companies and other investments. Accordingly, such advice, recommendations and dealings could result in adverse consequences to KKR Funds or Other Clients or their investments (see also Item 10 for a discussion of services provided by Affiliated Brokers to competitor companies). As noted in response to Item 5, Employees, Senior Advisors, Industry Advisors, KKR Advisors, RPM and other Consultants serve on the boards of KKR Fund or Other Client portfolio companies, and in such capacity currently receive and are expected in the future to receive director’s fees that are retained in whole or in part by the relevant Employee, Senior Advisor, Industry Advisor, KKR Advisors, RPM or other Consultant. Serving in such capacity gives rise to conflicts to the extent that an Employee’s fiduciary duties to a portfolio company as a director conflicts with the interests of KKR Funds or Other Clients. As the KKR Funds or Other Clients will generally be significant investors in such companies, it is expected that such interests will generally be aligned. Employees, Senior Advisors, Industry Advisors, KKR Advisors, RPM and other Consultants also serve as directors or interim executives, or are otherwise associated with, companies that are competitors of portfolio companies of KKR Funds or Other Clients. It would be expected that the interests of a competitor company would often not be aligned with those of a KKR Fund, Other Client or their portfolio company, and consistent with the fiduciary duty owed by Employees, RPM, Senior Advisors, Industry Advisors, KKR Advisors and other Consultants to such competitor companies when serving on their boards, they will act in the best interests of the competitor companies, and not in the best interests of KKR Funds or Other Clients. Having KKR Employees serve as directors or interim executives of a portfolio company of a KKR Fund or Other client or another company (including a portfolio company of another KKR Fund, Other Client or KKR proprietary entity) will, under certain circumstances, restrict the ability of a KKR Fund to invest directly in an investment opportunity that also constitutes an investment opportunity for such company.

KKR and its affiliates receive certain fees through third parties pursuant to participation or “back-to-back” arrangements (please see Item 5 – Non-Shared Fees). While KKR and its affiliates believe that such fees and other compensation are reasonable and generally at market rates for the relevant activities, such compensation is generally determined through negotiations with related parties and not on an arm’s length basis. In connection with such arrangements, KKR will make determinations of market rates based on its consideration of a number of factors, which are generally expected to include KKR’s experience with non- affiliated service providers as well as benchmarking data and other methodologies determined by KKR to be appropriate under the circumstances. While KKR and its affiliates will generally seek to obtain benchmarking data regarding the rates charged or quoted by third parties for similar services, appropriate comparisons might not be available for a number of reasons, including for example, a lack of a substantial market of providers or users of such services or the confidential and/or bespoke nature of such services. Accordingly, any such market comparison efforts by KKR could potentially result in inaccurate information regarding market terms for comparable services. Depending on the nature of the relevant services provided, expenses to obtain benchmarking data will be borne by the relevant portfolio company or directly by the KKR Fund, Other Client and/or such other investment vehicles and accounts that invest.

As discussed below under “KKR Purchases/Sales of Securities Recommended to KKR Funds or Other Clients,” Employees and other persons associated with KKR and executives of KKR Fund portfolio companies are permitted to invest in KKR Associates Vehicles established as co-investment vehicles to facilitate participation by such persons in portfolio investments made by KKR Funds or Other Clients (which vehicles typically will not be charged management fees or carried interest allocations or certain expenses). Employees and other persons associated with KKR as well as KKR proprietary entities also are permitted to co-invest in “opportunistic” investments by the Balance Sheet (described below), which will also be made alongside KKR Funds or Other Clients. Please see “KKR Purchases/Sales of Securities
Recommended to KKR Funds and Other Clients – Proprietary Investments” and “Allocations of
Investment Opportunities – Balance Sheet Investments” for further information regarding such investments. Certain KKR proprietary entities also make capital contributions to KKR Funds and co-investments in portfolio companies. The Public Company indirectly holds limited partnership interests in KKR Funds and co-investments in portfolio companies, which it has transferred or sold (in whole or in part) or will transfer or sell (in whole or in part) to third parties (including other investors in KKR Funds) in negotiated transactions. Please see “KKR Purchases/Sales of Securities Recommended to KKR Funds and Other Clients – Proprietary Investments” for further information regarding such investments. KKR Funds and Other Clients expect, from time to time, to sell a portfolio company interest to a limited partner of a KKR Fund or Other Client, including a limited partner or Other Client already directly or indirectly holding an interest in the same portfolio company or a limited partner in another KKR Fund or Other Client that is not invested in the portfolio company. Because such proposed sales are from KKR Funds or Other Clients (and not KKR) and to limited partners of KKR Funds or Other Clients and not “clients” as defined under the Advisers Act, KKR does not consider such sale transactions to be principal transactions. KKR has policies and procedures to manage conflicts of interest that arise in these circumstances.
Investments in Which KKR, KKR Funds, Other Clients, KKR Credit, and/or KKR Credit Funds
Invest in Different Securities of the Same Issuer or Invest in the Same Issuer on Same or Different
Dates
Certain KKR Credit Funds have an investment focus that is, at least in part, similar to the focus of certain KKR Funds, Other Clients, KKR Associates Vehicles or certain KKR proprietary entities. In particular, certain KKR Credit Funds co-invest in private equity and other investments made by KKR Funds or Other Clients alongside such KKR Funds or Other Clients. In addition, certain KKR Funds or Other Clients co- invest in KKR Credit investment strategies alongside KKR Credit Funds and Other Clients. The overlap of investment focus will in certain cases give rise to conflicts of interest between clients of KKR Credit on the one hand and KKR Funds or Other Clients on the other hand, including potential conflicts in allocating and managing certain investments.

Certain KKR Funds, KKR Credit Funds, KKR Associates Vehicles and other KKR proprietary entities, Other Clients and KKR affiliates, including an Affiliated Broker, will also from time to time invest in different parts of the capital structure of the same portfolio company. For example, a KKR Credit Fund or a KKR affiliate, including an Affiliated Broker, could invest in debt securities issued by a portfolio company in which a KKR Fund has a controlling or other equity interest. Under such circumstances, the interests of the KKR Credit Fund and such KKR Fund or KKR affiliate, including any Affiliated Broker, will not always be aligned, which will give rise to conflicts of interest, or the appearance of such conflicts of interest. Actions taken for a KKR Fund or Other Client might therefore be adverse to those taken for a KKR Credit Fund or a KKR affiliate, or vice versa. KKR and KKR Credit have policies and procedures to mitigate potential conflicts of interest involved in investments by such entities in different parts of a portfolio company’s capital structure and in certain cases will take conflict mitigating actions that, in the absence of a potential conflict, they would not take, such as abstaining from exercising voting or other rights with respect to certain equity or debt investments in a portfolio company; remaining passive in a restructuring or similar situations (including electing not to vote or voting pro rata with other investors in the portfolio company); investing in the same or similar classes of the portfolio company’s capital structure to create alignment of interests; or otherwise taking an action designed to mitigate or eliminate the conflict.

Additionally, the investment programs employed by KKR or KKR Credit (as applicable) for KKR Funds, Other Clients, KKR Credit Funds or KKR proprietary entities, as applicable, will conflict from time to time with the transactions and strategies employed by KKR in managing KKR Funds and Other Clients (or, as applicable, other KKR Funds or Other Clients). For example, where a KKR Fund, Other Client, KKR Credit Fund, or KKR proprietary entities hold portfolio investments in the same issuer, their interests will in many cases be in conflict irrespective of whether their investments are at different levels of the capital structure. In addition, KKR and KKR Credit, as applicable, could give advice or take action (including entering into short sales, derivatives transactions or other “opposite way trading” activities) with respect to investments held by, and transactions of, certain KKR Funds, Other Clients, KKR Credit Funds, or KKR proprietary entities that are different from, or otherwise inconsistent with, the advice given or timing or nature of any action taken with respect to the investments held by, and transactions of, KKR Funds or Other Clients (or, as applicable, other KKR Funds or Other Clients). Such advice and actions could adversely impact a KKR Fund or Other Client. The timing of entry into or exit from a portfolio investment could vary as among KKR Funds, Other Clients, KKR Credit Funds, and KKR proprietary entities for reasons such as differences in strategy, existing portfolio or liquidity needs. Similarly, the form of consideration received in connection with an exit of an investment could also vary among these parties if, for example, KKR proprietary accounts receive and retain an in-kind distribution of securities, for example, through an in-kind distribution by a KKR Fund, Other Client or KKR Credit Fund to its general partner, where such securities are otherwise disposed of by such KKR Fund, Other Client or KKR Credit Fund for cash, in whole or in part. The above variations in timing or form of consideration could be detrimental to another KKR Fund or Other Client or any such other investing entities. There can be no assurance that the terms of, or the return on, such KKR Fund’s or Other Client’s investment will be equivalent to, or better than, the terms of, or the returns obtained by, a different KKR Fund or Other Client, or a KKR Credit Fund, or KKR proprietary entity, including in respect of any category of investments, nor can there be any assurance that a different KKR Fund or Other Client, or a KKR Credit Fund, or KKR proprietary entity with similar investment objectives, programs or strategies, including, without limitation, any Seed Investments, will hold the same positions, obtain the same financing or perform in a substantially similar manner as such KKR Fund or Other Client.

Different advice and/or inconsistent actions is motivated by a variety of reasons, including, without limitation, the differences between the investment objective, program, strategy or tax treatment of certain KKR Funds or Other Clients, KKR Credit Funds, or KKR proprietary entities on the one hand and different KKR Funds or Other Clients on the other, the regulatory status of certain KKR Funds or Other Clients, KKR Credit Funds, and any related restrictions or obligations imposed on KKR (or any affiliate) as a fiduciary thereof (including, for example, certain KKR Funds or Other Clients, or KKR Credit Funds invested in by pension plans and employee benefit plans and constituting “plan assets” under ERISA or certain KKR Funds or Other Clients, or KKR Credit Funds that are registered as investment companies under the Investment Company Act). For example, a KKR Fund is permitted to engage in bona fide hedging transactions in connection with its investments, while KKR proprietary entities could enter into such transactions for speculative purposes or, alternatively, to hedge a given risk related to a given investment more or less fully than such KKR Fund. KKR proprietary entities could enter into such hedging arrangements in connection with investments alongside a KKR Fund and, like other investors in such KKR Fund, could also enter into hedging arrangements in connection with their investments made through such KKR Fund (including with respect to the applicable KKR GP’s entitlement to receive carried interest distributions), which arrangements are not employed by such KKR Fund itself. These differences in hedging strategy could result in such KKR proprietary entities achieving more or less favorable returns with respect to an investment relative to the returns achieved by the KKR Fund or Other Client or other investors in the KKR Fund or Other Client. In the future, certain KKR Funds or Other Clients, KKR Credit Funds or a KKR proprietary entity could concurrently, or in close proximity in time with such acquisition by a different KKR Fund or Other Client, establish a short position in a security acquired by such KKR Fund or Other Client (for example as collateral) or that otherwise relates to such an investment held by such KKR Fund or Other Client, and such short sale could result in a decrease in the price of the security acquired by or otherwise held by such KKR Fund or Other Client or otherwise benefit the execution of the transaction entered into by another KKR Fund or Other Client, or a KKR Credit Fund, and/or KKR proprietary entity. With respect to private equity investments, KKR Funds, Other Clients or KKR proprietary entities will often seek to acquire controlling or other significant influence positions and will also seek to make some investments in which they do not acquire control or significant influence. KKR Funds or Other Clients will frequently have the ability to elect some or all of the members of the board of directors of their portfolio companies and thereby influence and control their policies, including the appointment of management, future issuances of common stock, or other securities, the payments of dividends, if any, on their common stock, the incurrence of debt, amendments to their certificates of incorporation and bylaws, and entering into extraordinary transactions. Certain actions of a portfolio company that KKR is in a position to control or influence by reason of a KKR Fund’s, Other Client’s or KKR proprietary entity’s interest in such company could be in the interests of the KKR Fund, Other Client or KKR proprietary entity but adverse to the interests of a KKR Credit Fund, or vice versa. For example, a KKR Fund or KKR proprietary entity could have an interest in pursuing an acquisition that would increase indebtedness, a divestiture of revenue- generating assets, or another transaction that, in KKR’s judgment, could enhance the value of the KKR Fund’s investment, but would subject debt investments made by a KKR Credit Fund to additional or increased risk. In addition, to the extent that a KKR Fund, Other Client or KKR proprietary entity is the controlling shareholder of a portfolio company, KKR or a KKR affiliate is likely to have the ability to determine (or significantly influence) the outcome of all matters requiring stockholder approval and to cause or prevent a change of control of such company or a change in the composition of its board of directors and could preclude any unsolicited acquisition of that company. A KKR Fund’s, Other Client’s or KKR proprietary entity’s interests with respect to the management, investment decisions, or operations of a portfolio company could at times be in direct conflict with those of KKR Credit Funds that do not have the same level of control or influence over the company. As a result, KKR will from time to time face actual or perceived conflicts of interest, in particular, in exercising powers of control over KKR Fund portfolio companies.

KKR’s ability to implement any KKR Fund’s or Other Client’s strategy effectively could also be limited to some extent by contractual obligations entered into in respect of investments made by a different KKR Fund or Other Client, or a KKR Credit Fund, or KKR proprietary entity. Limitations on strategy implementation could also result from regulatory obligations or restrictions imposed on KKR as a result of the regulatory status of KKR proprietary entities and/or different KKR Funds or Other Clients, or a KKR Credit Fund (for example, under ERISA or the Investment Company Act), including restrictions on the ability of any KKR Fund or Other Client (or KKR on their behalf) to invest in securities or interests that such KKR Fund or Other Client would otherwise be interested in pursuing or to otherwise take actions in respect of such KKR Fund’s or Other Client’s investments that would otherwise be beneficial to such KKR Fund or Other Client. For example, in certain instances in connection with the sale of investments by KKR proprietary entities or KKR Funds and Other Clients, KKR could enter into agreements prohibiting KKR Funds, Other Clients and KKR proprietary entities from engaging in activities that are deemed to compete with the disposed of investment for a certain period of time. Such agreements could, in turn, prevent KKR Funds or Other Clients from acquiring investments in certain sectors or regions, including investments that otherwise would have been appropriate for KKR Funds or Other Clients.

KKR Credit Funds will from time to time invest in debt issued by the same companies that a KKR Fund or Other Client has invested in. The interests of the KKR Fund or Other Client will not be aligned in all circumstances with the interests of KKR (or any affiliate) or KKR Credit Funds to the extent that they hold debt interests, which could create actual or potential conflicts of interest or the appearance of such conflicts. In that regard, actions could be taken by KKR (or any affiliate) or KKR Credit Funds that are adverse to the KKR Fund or Other Client. The involvement of KKR and KKR Credit at both the equity and debt levels could inhibit strategic information exchanges among other creditors. In certain circumstances, KKR Funds, Other Clients or KKR Credit Funds will be prohibited from exercising voting or other rights, and could be subject to claims by other creditors with respect to the subordination of their interests. The interests of the KKR Fund, Other Client, KKR and/or KKR Credit Funds investing in different parts of the capital structure of a portfolio company are particularly likely to conflict in the case of financial stress or distress of the company and such conflicts will be increased where KKR and/or other KKR Funds or Other Clients hold material equity interests in a portfolio company or otherwise have a material influence on its management. If additional financing is necessary as a result of financial or other difficulties of a portfolio company, or to finance growth or other opportunities, it might not be in the best interests of a KKR Credit Fund, as a holder of debt issued by such company, to provide such additional financing and the ability of KKR to recommend such additional financing as being in the best interests of KKR Funds or Other Clients might be impaired or limited. Decisions about what action should be taken in a troubled situation, including whether or not to enforce claims, whether or not to advocate or initiate a restructuring or liquidation inside or outside of bankruptcy, and the terms of any work-out or restructuring, raise conflicts of interest. In addition, it is possible that, in a bankruptcy proceeding, KKR Funds’ or Other Clients’ interests could be subordinated or otherwise adversely affected by virtue of KKR’s and/or a KKR Credit Fund’s involvement and actions relating to their investments. There can be no assurance that the term of or the return on KKR Funds’ or Other Clients’ investments will be equivalent to or better than the term of or the returns obtained by a KKR Credit Fund participating in the transaction. This could result in a loss or substantial dilution of a KKR Fund’s or Other Client’s investment, while KKR (or an affiliate) or a KKR Credit Fund recovers all or part of amounts due to it. Similarly, KKR’s ability to implement a KKR Fund’s or Other Client’s strategies effectively will be limited to the extent that contractual obligations entered into in respect of the activities of KKR (or an affiliate) or KKR Credit Fund impose restrictions on such KKR Fund or Other Client engaging in transactions that KKR would be interested in otherwise pursuing.

KKR Funds, Other Clients, their portfolio companies and other entities in or through which KKR Funds and Other Clients invest will enter into deal-contingent hedging arrangements with respect to prospective investments. Under these arrangements, in exchange for a fixed fee a bank or other counterparty unaffiliated with KKR will agree to assume the market risk associated with a hedging arrangement entered into by or on behalf of the KKR Fund, Other Client or such other entity in or through which a potential investment is proposed to be made (e.g., with respect to FX or interest rate risk) in the event that the relevant investment is ultimately not consummated. An affiliate of KKR will in turn enter into agreements with such counterparty pursuant to which such KKR affiliate will agree to assume some portion of the market risk under the deal-contingent hedging arrangement in consideration for a portion of the fee payable to such counterparty (see also Item 5 above). In these circumstances, the interests of the KKR affiliate receiving this Indirect Fee in a deal-contingent hedging arrangement will not always be aligned with the interests of the KKR Fund or Other Client. For example, if there is a market decline between the time the deal- contingent hedging arrangement is entered into and the closing of the investment, then the KKR affiliate participating in such hedging arrangement will be facing an unrealized loss (which could be substantial) that could be avoided by consummating the investment since the loss would only by realized if the investment does not close. Conversely, if there is a market increase between the time when the deal- contingent hedging arrangement is entered into and the closing of the investment, then the KKR affiliate participating in such hedging arrangement will be facing an unrealized gain (which could be substantial) that could be realized by not consummating the investment since the gain would only be crystallized if the investment does not close. As a result, KKR will face actual or perceived conflicts of interest in connection with the consummation (or abandonment) of an investment with respect to which a KKR affiliate has participated in a related deal-contingent hedging arrangement.

KKR has established a conflicts of interest policy and procedures intended to mitigate potential conflicts of interest inherent in investments by KKR Funds, Other Clients, and KKR Credit Funds in portfolio companies of other KKR Funds or Other Clients. These policies and procedures, which include limitations on both the maximum amounts and types of certain such investments and procedures relating to transacting in the securities of such companies when they become distressed, are intended to supplement such restrictions and other requirements relating to such investments as disclosed in the offering materials, disclosure documents and/or governing documents of any KKR Fund or Other Client. KKR Funds and Other Clients will seek to in an appropriate manner manage conflicts, which could involve, by way of example and without limitation, refraining from investing in, contributing additional capital to, or disposing of the investment giving rise to the conflicts of interest, referring the matter to independent third parties, obtaining a third-party fairness opinion, seeking consent from a KKR Fund’s limited partner advisory committee or limited partners, or other means of resolving the conflict in lieu of referring such conflict to the KKR Fund’s limited partner advisory committee or limited partners, to the extent permitted pursuant to the governing documents of such KKR Fund or Other Client. To the extent KKR Funds, Other Clients, or KKR Credit Funds and any relevant dedicated single or multiple asset co-investment vehicles (and their related co-investors) co-invest in the same securities of the same issuer, KKR also will generally seek to ensure that all participants in such co-investments participate on comparable terms. This will not be practicable or appropriate in all circumstances, however, and, subject to applicable law, a KKR Fund or Other Client or co-investment vehicle would participate in such investments on different and potentially less favorable terms than other participants if KKR deems such participation as being otherwise in the best interests of any relevant KKR Fund or Other Client. In addition to investing alongside KKR Funds, certain KKR Funds and other Clients will invest as limited partners in KKR Funds and will have the right to exercise any vote, consent or waiver required or permitted under the partnership agreements of the KKR Funds in which they invest in the same manner as other limited partners in such KKR Funds. Such KKR Funds typically (but not always) provide that all or certain votes, consents or waivers are exercised by the underlying investor(s) or other third party participants indirectly invested in such KKR Funds. To the extent that any such vote, waiver or consent is permitted to be exercised independently by KKR or an affiliate in its capacity as general partner, manager or a similar role, KKR and its affiliates will seek to exercise such vote, waiver or consent in accordance with the interests of such KKR Funds or Other Clients investing as limited partners in KKR Funds, or alternatively exercise such discretion in accordance with prescribed mechanisms (i.e., in the same proportions as other limited partners vote with respect to the relevant item).
Investments of Stakes and Seed Funds and Other Pooled Funds

Stakes and Seed Funds and pooled funds or separate accounts managed by portfolio companies (or divisions or subsidiaries of portfolio companies) of KKR Funds or Other Clients are expected to pursue a broad range of investment strategies and invest in a broad range of securities and instruments and other assets globally. Any of these funds or accounts could invest in securities or other financial instruments of companies (or issuers) in which KKR Funds or Other Clients also have an interest. These funds and accounts could also invest in competitors of KKR Funds, Other Clients or their respective portfolio companies. Actions taken by any Stakes and Seed Manager in respect of any of the foregoing could adversely impact a KKR Fund or Other Client. Any such investments and actions will be controlled by the respective Stakes and Seed Manager and will generally be outside the control and oversight of KKR.

KKR Purchases/Sales of Securities Recommended to KKR Funds and Other Clients
Co-Investment Vehicles

As indicated above in response to Item 4, KKR (and its affiliates) offer and sponsor a number of vehicles that are dedicated co-investment vehicles that facilitate the co-investment by third party co-investors in single or multiple portfolio companies alongside other KKR Funds and Other Clients. Any such vehicle will be established at KKR’s or its affiliates’ sole discretion, and KKR and its affiliates have no obligation to offer a similar opportunity to any investors. Co-investment vehicles include, but ar please register to get more info

Selecting or Recommending Broker-Dealers
To the extent required by applicable law, it is KKR’s policy to seek to obtain best execution of trades (if any) in public equity and debt securities and other Marketable Securities traded on behalf of the KKR Funds and Other Clients, if applicable, by a selected broker-dealer. In seeking best execution, the determinative factor is not always the lowest possible per security price or commission but whether, in KKR’s view, the transaction represents the best overall qualitative and quantitative execution for the KKR Fund or Other Client. KKR’s process of determining best execution involves not only an assessment of brokerage commissions or bid/offer spreads, but also an evaluation of broker-dealer ancillary services. KKR generally considers a range of a broker-dealer’s services in assessing best execution, including:
• competitiveness of commission rates and spreads;
• promptness of execution;
• past history in executing orders;
• clearance and settlement capabilities;
• research capabilities and quality;
• access to markets, investments (including access to new issues) and distribution network;
• whether the broker-dealer is making a market in a particular issuer;
• trade error rate and ability or willingness to correct errors;
• anonymity /confidentiality;
• market impact:
• liquidity;
• speed of execution;
• expertise with complex transactions;
• trading style and strategy; and
• geographic location.

Accordingly, although KKR will seek competitive commissions and spreads, it will not necessarily obtain the lowest possible rates for KKR Fund or Other Client transactions. The commissions, spreads, or other transaction or financial advisory fees charged by an executing broker-dealer will in certain cases be higher or lower than those charged by other broker-dealers.

As noted above in Item 10, the Affiliated Brokers do not execute trade transactions on behalf of KKR Funds or Other Clients. In addition, such Affiliated Brokers do not maintain client accounts.

Research and Other Soft Dollar Benefits Pursuant to KKR’s current policy, it does not enter into soft dollar or comparable commission sharing arrangements with broker-dealers relating to transactions executed for the benefit of KKR Funds or Other Clients, despite the incentive to receive research or other products or services without paying. It should be noted, however, that various broker-dealers provide KKR or its affiliates with proprietary research and other products and services, which KKR could use to service all KKR Funds or Other Clients. KKR is of the view that it would receive such research, products and services regardless of the volume of transactions executed through such broker-dealers or the level of commissions or spreads generated by such transactions and that, accordingly, it is not causing any KKR Fund or Other Client to “pay up” for such research, services or products and such research, products and services are not a factor considered by KKR in directing client transactions to such broker-dealers. KKR does not cause KKR Funds or Other Clients to pay commissions higher than those charged by other broker-dealers in return for soft-dollar benefits or direct client transactions to a particular broker-dealer in return for soft dollar benefits. Acquisitions of portfolio companies will typically be executed by KKR on behalf of KKR Funds or Other Clients on terms specifically negotiated by KKR with such companies or the seller of such companies. In certain jurisdictions, such as the United Kingdom and Ireland, KKR’s locally-regulated affiliates are required to pay for research services they consume in order to comply with MiFID II standards as implemented by the relevant local financial services regulator. The purpose of the MiFID II standards regarding research consumption is to ensure there is a clear delineation between commissions paid for trading services and the provision of research. KKR is of the view that this aligns with KKR’s approach to soft dollar arrangements discussed above as it ensures that the provision of research is not a consideration when deciding where to direct client transactions. Brokerage for Client Referrals KKR does not consider, in selecting or recommending broker-dealers, whether it or a related person receives client referrals from a broker-dealer or a third party. Directed Brokerage

KKR does not recommend, request or require that a client direct KKR to execute transactions through a specific broker-dealer.
Aggregation of Client Orders (Bunched Trades)
In order to minimize execution costs and obtain best execution for KKR Fund or Other Client transactions in Marketable Securities, KKR bunches certain orders for KKR Funds and Other Clients (subject to KKR’s obligation to obtain best execution and otherwise treat KKR Funds in a fair and equitable manner). Allocations of bunched trades are made consistent with KKR’s allocation policies and procedures described above in Item 11. please register to get more info

KKR has an internal structure which allocates responsibility for oversight of KKR Fund or Other Client portfolios and/or specific KKR Fund or Other Client portfolio investments to appropriate investment professionals or investment committees. Each investment committee generally consists of the co-CEOs of KKR & Co. and regional business heads or other senior investment professionals. The composition of any investment committee will change from time to time.

Potential investments (other than third party fund investments) are canvassed and preliminarily discussed at regular meetings of the relevant investment committee. Teams of KKR’s investment professionals (“Investment Teams”) responsible for identifying and conducting due diligence on each investment will present the investment to the relevant investment committee, which will make the final investment decision with respect to the investment opportunity. Following the acquisition of an investment, it is monitored on an ongoing basis by the relevant Investment Team or the appropriate portfolio management committee. Each portfolio management committee meets periodically, designating a number of Investment Teams on a rotating basis for presentation of their respective portfolio companies. The composition of any portfolio management committee will change from time to time. Employees also provide strategic oversight of the investments of certain KKR Funds (including investment vehicles established for a single investor) and Other Clients outside of an investment committee structure in accordance with the governing documents of such KKR Funds or Other Clients. The nature and frequency of regular reports to KKR Funds or Other Clients and to investors in KKR Funds or Other Clients depends on the terms of the governing documents of such KKR Funds or Other Clients and/or the requirements of any exchange or market on which their securities are admitted to trade. Typically investors in KKR Funds are provided with written quarterly unaudited financial reports and annual audited financial statements. please register to get more info

Economic Benefits from Non-Clients
As described in more detail in Item 5 and Item 10, Employees, Affiliated Brokers, KKR Capstone (and other KKR affiliates), RPM and other Consultants receive economic benefits from KKR Funds, Other Clients and portfolio companies of KKR Funds and Other Clients. Please see Item 5 with respect to monitoring fees (including NPV Payments), transaction fees (including financial advisory fees), breakup fees, and other compensation and expense reimbursement.

Please see Item 5 with respect to directors’ fees for Employees, RPM employees, and Senior Advisors (or Industry Advisors) serving on boards of portfolio companies.

Please see Item 5 with respect to compensation received by Affiliated Brokers.

Please see Item 5 with respect to KKR Funds, Other Clients and portfolio companies of KKR Funds or Other Clients and fees and/or servicing payments payable to KKR, its affiliates, or RPM (or other Consultants).
Compensation to Non-Supervised Persons for Client Referrals
KKR from time to time enters into solicitation agreements pursuant to which it compensates a third-party intermediary for client referrals that result in the provision of investment advisory services by KKR. KKR will disclose these solicitation arrangements to affected investors, and any cash solicitation agreements will comply with Rule 206(4)-3 under the Advisers Act. Solicitors introducing clients to KKR receive compensation from KKR, such as a retainer and/or a percentage of introduced capital. Such compensation will be paid pursuant to a written agreement with the solicitor and generally can be terminated by either party from time to time. The cost of any such fees will be borne entirely by KKR and not by any affected client. please register to get more info

KKR generally has custody of the assets of KKR Funds. Such KKR Funds and their investors receive annual audited financial statements from the KKR Funds’ auditor. KKR would not generally have custody of the assets of Other Clients where the investment management relationship consists of an investment management agreement directly with an investor. In such situations, one or more third parties (typically financial institutions selected by the investor) have sole custody of the investor’s assets. KKR has no such investment management relationships as of December 31, 2018. please register to get more info

KKR, through the KKR GPs, generally has discretionary authority based on its management agreements with each KKR Fund and the governing documents of each KKR Fund to buy and sell securities or other investments on behalf of the KKR Funds and to determine the amount of such investments to be bought and sold. The terms upon which KKR serves as investment manager of a KKR Fund are established at the time each KKR Fund is established and are generally set out in the governing documents entered into by KKR with respect to the relevant KKR Fund, and disclosed in the offering or disclosure documents for the relevant KKR Fund, as applicable. These terms, which vary as among each KKR Fund, potentially restrict KKR’s advice concerning investment in certain securities or types of securities, geographies, and leverage. Typically, the governing documents of the KKR Funds contain limited investment restrictions and requirements as to diversification of fund investments, either by geographic region or asset type. For Other Clients and certain other investment vehicles established for a single investor, KKR would negotiate the level of investment discretion with the client at the outset of the advisory relationship. In addition to the conflicts of interest described under Item 11, as a general matter, it is expected that KKR will, from time to time, exercise its investment discretion to give advice or take action with respect to the investments held by, and transactions of KKR Funds, Other Clients or KKR proprietary entities that is different from or otherwise inconsistent with the advice given or timing or nature of any action taken with respect to the investments held by, and transactions of, other KKR Funds, Other Clients or KKR proprietary entities. Such different advice and/or inconsistent actions could be due to a variety of reasons, including, without limitation, differences between the investment objectives, programs, strategies and tax treatment of certain KKR Funds, Other Clients or KKR proprietary entities or the regulatory status of other KKR Funds or Other Clients and any related restrictions or obligations imposed on KKR as a fiduciary thereof. Such advice and actions could adversely impact KKR Funds and Other Clients. please register to get more info

KKR has adopted policies with respect to voting public equity securities held by KKR Funds or Other Clients (i.e., investments in Marketable Securities). Such voting decisions with respect to client investments generally will be made by the relevant investment professionals. It is the general policy of KKR to vote client proxies in the interest of maximizing shareholder value. To that end, KKR will vote in a way that it believes is consistent with its obligations to the KKR Funds, and will cause the value of the relevant investment to increase the most or decrease the least.

KKR recognizes that there will in certain cases be a potential conflict of interest when voting a proxy solicited by an issuer that is an investor in a KKR Fund or with whom KKR has another business relationship that could affect how it votes the issuer’s proxy. KKR has adopted policies to address these and other issues that could give rise to a conflict, including referring the matter to KKR’s Compliance Group to address issues raised from potential conflicts. KKR could depart from these guidelines in order to avoid voting decisions believed to be contrary to the best interests of the KKR Funds or if it has agreed otherwise with the relevant client. A KKR Fund or investor in a KKR Fund can obtain a copy of KKR’s proxy voting policies and procedures and information on how KKR voted proxies on behalf of such party on written request to KKR. please register to get more info

KKR does not require the payment of management fees or other compensation six months or more in advance. There exists no financial condition of which KKR is currently aware that would impair KKR’s ability to meet contractual commitments to its clients.
Item 19 Requirements for State-Registered Advisers
KKR is not registered with any state securities authorities. please register to get more info