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NORTH AMERICA INSIGHT ~~ Morgan Stanley | RESEARCH KKR & Co. SOTP and Sensitivity Analysis Exhibit 42: SOTP for KKR KKR & Co. (KKR) Current Downside Case Upside Case C- Sum-of-the-Parts Components (KKR) Price SOTP C-Corp Conversion Corp Conversion 2018e Pre-Tax Core FRE / Sh $0.56 $0.56 0% $0.56 0% Tax Rate 24% 24% 0% 24% 0% Fee Related Faminge _ 2018@ After-Tax Core FRE / Sh $0.43 $0.43 0% $0.43 0% arnings FRE Multiple 15.0x 15.0x 0.0x 225K 7.5x Core FRE Value $6.38 $6.38 0% $9.57 50% te Balance Balance Sheet Net Cash and ° 5 Sheet Investments / Sh (as of 3Q17) LE ova Ws _ oe + Accrued Net Accrued Carry / Sh (as of 7 ° Carry 3Q17) $1.74 $1.32 24% $1.32 24% as Avg Net Carried interest / Sh 6 6 Market (2018e-2020e) $0.93 $0.71 24% $0.71 24% Implied Carry ; Value Multiple 7.0x 2.5Xx -4.5x 9.0x 2.0x Market Implied Carry Value ! _ $6.57! $1.80 -73% $6.42 -2% Total Value $24.40 $19.21 -21% $27.01 11% 2018e EPS $2.74 $2.16 -21% $2.16 -21% Valuation P/E 8.9x 8.9x 0.0x 12.5x 3.6x 3Q17 Book Value / Sh $13.80 $13.80 $13.80 Price-to-Book 1.77x 1.39x -0.4x 1.96x 0.2x 2018e ROE 19.1% 19.1% 0.0% 15.3% 3.8% Source: Company Data, Morgan Stanley Research estimates Exhibit 43: Exhibit 44: KKR Estimated Potential Share Price in C-corp Conversion KKR Estimated % Change in Current Share Price Multiple on Future Performance Fees Multiple on Future Performance Fees 2.5x 3.5x 4.5x 5.5x 6.5x 7.5x 2.5x 3.5x 4.5x 5.5x 6.5x 7.5x Fee Related Earnings Multiple Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates 9.0x Fee Related Earnings Multiple Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates HOUSE_OVERSIGHT_025576 9.0x