28 January 2014 Brokers, Asset Managers & Exchanges Alternative Asset Manager Initiation For KKR (Figure 13) we expect a relatively steady El and revenue profile over time, though with likely more volatility along the way upon market ups & downs, given the high portion of El from capital markets (mostly the firm's principal investments in funds on its balance sheet). We also see stronger growth in the public markets segment aided by growth initiatives and the likelihood for realizations to slow in the private markets segment. Positively, we expect the fee component of revenue to improve over time, although the principal investing contribution is likely sizeable at roughly 25% from a revenue perspective (with volatility) and closer to 40% from an El perspective given limited costs attributed to the balance sheet operations. This higher proportion of principal-driven income over time may continue to restrain KKR's PIE - though this remains an active debate. iFigure 13. KKR - DB forecasts for El by segment et revenue by type (Sinn) Pretax Economic Income (B) CAGR Segments 2012 2013E 2014E 2016E 2016E 2012-16E Reale Markets $832 $935 $715 $776 $624 -6.9% Pubk Markets $103 $166 $175 $198 $237 23.2% Caplet Martell* 51.196 $1.022 $836 $750 $851 -8.2% Total $2131 $2.123 $1.726 $1.724 51,711 -5.3% Average Segments Pretax B Business Mix 2012.16E Rkrale Mzekels 39.0% 44.0% 41.4% 45.0% 36.4% 41.2% Pak Mukets 4.8% 7.8% 10.1% 115% 13.8% 96% Copia' Markets 56.1% 48.1% 48.4% 43.5% 49.7% 49.2% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Revenues by Type CAGR Segments 2012 2013E 2014E 2016E 2016E 2012.16E Fees $824 $1,007 $1201 $1.262 $1.300 12.1% Carried Interest & hconbvos $1 .432 $1.399 $1156 $1,097 $881 a1.4% Pettiest 8 other income $1111 $932 $737 $631 $720 -10.3% Total 13.367 $3.338 $3.034 $2,990 $2.901 -3.7% Average Segments Revenue Mix by Type 2012.1