KKRKKR & Co.

Segment Reporting, page 45 1. We note that you have changed from four reportable segments to one reportable segment. Please explain why it is appropriate to continue to provide segment disclosures (e.g., segment revenues, segment expenses, segment operating earnings, segment assets/liabilities, disaggregated segment revenues by business line disclosures, etc.) and how your current disclosures are consistent with ASC

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280. In this regard, if you have only one reportable segment, explain why it is appropriate to present business line level information here. Please advise or revise your future filings to remove all such "segment" and business line references and information. 2. We note your presentation of segment results, segment revenues, segment expense, and segment operating earnings here and within the "Segment Analysis" section of Management's Discussion and Analysis, beginning on page 82. We also note your presentation of segment balance sheets on pages 94-95. Please tell us why you believe this presentation complies with ASC 280-10-50, given your determination that you have one segment. In addition, tell us why you believe your presentation of the segment results (page 82) and segment balance sheets (pages 94-95) complies with the prominence considerations under Question 102.10 of the updated Non-GAAP C&DI.

We respectfully advise the Staff that in preparing our disclosure for Note 14. Segment Reporting, we considered the guidance set forth in Accounting Standards Codification 280, Segment Reporting ("ASC 280") and determined that including this footnote, which presents several additional performance measures, was useful under ASC 280 because our chief operating decision makers use these measures to assess performance for our single operating and reportable segment.

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We also concluded that presenting this supplemental information in a footnote to our financial statements would be useful to readers. However, while we believe that this presentation is not expressly precluded by, and not inconsistent with the objectives of, ASC 280, we acknowledge that these performance measures are for the same set of operations included in our GAAP consolidated financial statements. Accordingly, in response to the Staff’s comment, we will remove these segment disclosures and business line references and information from the notes to our consolidated financial statements in future filings, which, as discussed with the Staff, we will begin to do in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019.

2. We note your presentation of segment results, segment revenues, segment expense, and segment operating earnings here and within the "Segment Analysis" section of Management's Discussion and Analysis, beginning on page 82. We also note your presentation of segment balance sheets on pages 94-95. Please tell us why you believe this presentation complies with ASC 280-10-50, given your determination that you have one segment. In addition, tell us why you believe your presentation of the segment results (page 82) and segment balance sheets

(pages 94-95) complies with the prominence considerations under Question 102.10 of the updated Non-GAAP C&DI.

We respectfully advise the Staff that, in future filings, in connection with our revisions described in our response to Comment #1 above, we will (i) revise the presentation of the information that was provided beginning on page 82 of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019 so that it no longer presents segment results and instead presents and reconciles any relevant non-GAAP components separately and (ii) revise the presentation of segment balance sheets provided on pages 94-95 of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019 so that it no longer presents a segment balance sheet and instead presents and reconciles any relevant non-GAAP components separately. Additionally, in future filings, we will revise the presentation of the information in the "Segment Analysis" section of our Management's Discussion and Analysis, beginning on page 82 of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019, by instead presenting an alternative section that does not use the word "segment". As discussed with the Staff, these revisions will begin in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019.

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We note on June 1, 2017, KKR completed its transaction to combine PAAMCO and KKR Prisma to create PAAMCO Prisma, a leading liquid alternatives investment firm, which operates independently from KKR. In connection with this transaction, KKR contributed $114.1 million of net assets in exchange for a 39.9% equity interest in PAAMCO Prisma and the right to receive certain payments from PAAMCO Prisma.

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We also note that KKR reports its investment in PAAMCO Prisma using the equity method of accounting. Please clarify whether PAAMCO Prisma is considered a variable interest entity or a voting rights entity and address the following:  Tell us the purpose and design of PAAMCO Prisma, including who participated in the design of the entity.  Clarify KKR’s rights and obligations to PAAMCO Prisma, specifically as it relates to KKR’s “right to receive certain payments.”  Tell us the significant activities that most impact the economic performance of PAAMCO Prisma and how decisions are made over those activities. As part of your response, tell us KKR’s rights and involvement over decision making of the entity, including whether KKR is a general partner, limited partner or other.

to the Staff’s comment, PAAMCO Prisma Holdings, LLC (“PAAMCO Prisma”) is considered by KKR to be a voting rights entity and not a variable interest entity (“VIE”). In arriving at this conclusion, and consistent with our consolidation policy disclosed on pages 13 and 14 of the Form 10-Q, we note that an entity in which KKR holds a variable interest is a VIE if any one of the following conditions exist: (a) the total equity investment at risk is not sufficient to permit such entity to finance its activities without additional subordinated financial support, (b) the holders of the equity

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investment at risk (as a group) lack either the direct or indirect ability through voting rights or similar rights to make decisions about such entity’s activities that have a significant effect on the success of such entity or the obligation to absorb the expected losses or right to receive the expected residual returns, or (c) the voting rights of some investors are disproportionate to their obligation to absorb the expected losses of such entity, their rights to receive the expected residual returns of such entity, or both and substantially all of such entity’s activities either involve or are conducted on behalf of an investor with disproportionately few voting rights. We respectfully confirm to the Staff that none of the conditions listed above exist with respect to PAAMCO Prisma, and therefore KKR has concluded that PAAMCO Prisma is a voting rights entity.

The purpose of PAAMCO Prisma is to form one of the largest firms in the hedge fund of funds industry by bringing together two respected brands. Founded in March 2000, Pacific Alternative Asset Management Company, LLC (“PAAMCO”) is an institutional investment firm dedicated to offering hedge fund of funds products and advisory services. Prisma Capital Partners LP, which constructs and manages customized hedge fund portfolios, was founded in 2004, and KKR acquired it in 2012 to form KKR Prisma. Prior to the PAAMCO Prisma transaction, PAAMCO and KKR (including KKR Prisma) were completely unrelated parties. Under the terms of the agreement, the businesses of both PAAMCO and KKR Prisma were contributed to PAAMCO Prisma to operate independently from KKR.

The design of PAAMCO Prisma was negotiated on an arms-length basis between KKR professionals, on the one hand, and the CEO and other professionals of PAAMCO, on the other hand, and both parties were represented by separate legal counsels.

KKR’s economic rights in PAAMCO Prisma consist of its ownership of 39.9% of the entity’s equity interests. A separate legal entity (“Holdco”), which is exclusively owned and controlled by the management of PAAMCO Prisma, none of whom are KKR employees, owns the remaining 60.1% of PAAMCO Prisma. KKR, as an equity holder in PAAMCO Prisma, also has the right to receive preferred cash payments of a fixed amount from PAAMCO Prisma in perpetuity and incentive fees if generated by certain contributed assets for a limited period of time, each of which are a component of our equity interest. These cash payments are not expected to be material to KKR’s total revenues.

KKR’s voting rights and obligations are limited to certain rights as a minority owner of a business which holds, for purposes of U.S. generally accepted accounting principles (“GAAP”), significant influence. PAAMCO Prisma is a limited liability company, where KKR is not the managing member but rather is a member with noncontrolling voting rights. KKR has the right to elect a number of representatives to the board of managers of PAAMCO Prisma commensurate with KKR’s percentage ownership (i.e., less than a majority of the board). In addition, KKR has various information, consent, transfer and other rights, including but not limited to the right to consent to material changes to PAAMCO Prisma’s budget, material changes to its compensation structure, affiliate transactions, material acquisitions and material dispositions. The significant activities of PAAMCO Prisma that most impact the economic performance of PAAMCO Prisma are the management of its operations and the execution of its business strategy, all of which are conducted by the management of PAAMCO Prisma, and all decisions concerning the day-to-day operations of PAAMCO Prisma are made by the management of PAAMCO Prisma. As noted above, none of the management team of PAAMCO Prisma includes employees of KKR, and such management team owns the 60.1% controlling interest of PAAMCO Prisma through Holdco.

Management’s Discussion and Analysis of Financial Condition and Results of Operations Segment Operating and Performance Measures, page 78

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We note your presentation of a full non-GAAP income statement on page 79. Please revise to remove your full non-GAAP income statement or revise your presentation in future filings so that it complies with Question 102.10 and 104.04 (and any other prominence considerations) of the updated non-GAAP C&DI Financial Measures Compliance and Disclosure Interpretations issued on May 17, 2016 (the “updated Non- GAAP C&DI”).

We respectfully advise the Staff that the table on page 79 is not intended to be a non-GAAP income statement, but rather a presentation of how our after-tax distributable earnings is calculated. However, in response to the Staff’s comment, in future filings we will revise our tabular presentation in a manner that will be substantially similar to the following.

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New or significantly modified disclosure is underlined and all numbers represent amounts for the three and six months ended June 30, 2017 and 2016.

The following tables present our calculations of distributable segment revenues, which is our total segment revenues excluding the impact of mark-to-market gains (losses), distributable segment expenses, which is our total segment expenses excluding the impact of mark-to-market gains (losses), and after-tax distributable earnings on common units for the three and six months ended June 30, 2017 and 2016. Additionally, the individual components of our calculations of after-tax distributable earnings are reconciled to the most directly comparable GAAP measure in the tables below.

The following table presents our calculation of distributable segment revenues for the three and six months ended June 30, 2017 and 2016.

Three Months Ended

Six Months Ended

($ in thousands)

June 30, 2017

June 30, 2016

Distributable Segment Revenues

Fees and Other, Net

Management Fees

$

229,569

203,617

437,853

398,217

Monitoring Fees

30,510

28,998

43,730

41,035

Transaction Fees

156,465

68,564

399,500

164,649

Fee Credits

(51,384

)

(39,073

(140,401

(61,880

Total Fees and Other, Net

365,160

262,106

740,682

542,021

Realized Performance Income (Loss)

Incentive Fees

2,624

4,645

4,310

6,238

Carried Interest

264,668

305,275

470,872

402,563

Total Realized Performance Income (Loss)

267,292

309,920

475,182

408,801

Realized Investment Income (Loss)

Net Realized Gains (Losses)

7,180

224,699

86,631

200,516

Interest Income and Dividends

67,836

74,451

124,718

182,571

Interest Expense

(47,026

(48,447

(88,735

(96,991

Total Realized Investment Income (Loss)

27,990

250,703

122,614

286,096

Total Distributable Segment Revenues

660,442

822,729

1,338,478

1,236,918

The following table presents our calculation of distributable segment expenses for the three and six months ended June 30, 2017 and 2016.

Distributable Segment Expenses

Compensation and Benefits

Cash Compensation and Benefits

135,522

96,890

274,957

197,789

Performance Income Compensation

111,917

123,968

199,984

163,520

Total Compensation and Benefits

247,439

220,858

474,941

361,309

Occupancy and Related Charges

13,407

15,659

27,776

31,609

Other Operating Expenses

53,069

49,533

106,567

111,419

Total Distributable Segment Expenses

313,915

286,050

609,284

504,337

The following table presents our calculation of after-tax distributable earnings for the three and six months ended June 30, 2017 and 2016.

($ in thousands except per unit data)

After-tax Distributable Earnings

Income (Loss) Attributable to Noncontrolling Interests

1,180

575

2,764

1,242

Income Taxes Paid

15,084

22,819

41,359

49,322

Preferred Distributions

8,341

5,693

16,682

Total after-tax Distributable Earnings

321,922

507,592

668,389

676,324

Per Adjusted Unit Eligible for Distribution

0.39

0.63

0.82

0.84

For a discussion of the components that drove the changes in our after-tax distributable earnings, see discussion of (i) management, monitoring and transaction fees, (ii) realized performance income, (iii) realized gains and net interest and dividends within investment income and (iv) expenses excluding unrealized performance income compensation within “—Segment Analysis.”

The following are reconciliations of the individual components of the calculation of after-tax distributable earnings to the most directly comparable GAAP measure.

Three Months Ended,

Six Months Ended,

Fees and Other

931,788

576,757

1,647,740

739,562

Management fees relating to consolidated funds and placement fees

52,300

44,048

99,402

82,318

Fee credits relating to consolidated funds

(2,707

(1,921

(3,646

(2,349

Net realized and unrealized carried interest - consolidated funds

10,384

19,186

21,441

9,625

Total investment income (loss)

335,967

(46,745

634,627

(576,343

Revenue earned by oil & gas producing entities

(17,382

(18,225

(34,655

(31,786

Reimbursable expenses

(36,076

(18,638

(59,625

(34,519

Other

(9,136

(10,483

(17,448

(17,136

Total Segment Revenues

1,265,138

543,979

2,287,836

169,372

Unrealized Carried Interest

(296,719

(18,698

(437,345

205,107

Net Unrealized Gains (Losses)

(307,977

297,448

(512,013

862,439

Total Expenses

629,728

423,218

1,169,742

731,541

Equity based compensation

(87,940

(60,657

(198,976

(124,480

Reimbursable expenses and placement fees

(58,860

(30,525

(94,983

(54,632

Operating expenses relating to consolidated funds, CFEs and other entities

(21,229

(21,281

(34,659

(64,952

Expenses incurred by oil & gas producing entities

(12,924

(20,392

(24,101

(38,218

Intangible amortization

(5,062

3,865

(11,428

(13,528

(10,024

347

(19,323

(9,511

Total Segment Expenses

433,689

294,575

786,272

426,220

Unrealized Performance Income Compensation

(119,774

(8,525

(176,988

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We note in 2017 that you changed the expense allocation to your Principal Activities segment. In this regard, we note that the allocation percentage for 2017 will not be more than 25.7% based on cumulative revenues earned since 2009, whereas the 2016 allocation is based on revenues earned in 2015, 2014, 2013 and 2012.

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Please tell us how you considered the guidance in ASC 280-10-50-36 in showing all segment information on a comparable basis. In this regard, tell us why you did not revise the 2016 allocation to also be based on cumulative revenues since 2009.

We respectfully advise the Staff that we did not revise the 2016 allocation to Principal Activities to be consistent with the 2017 allocation, which is based on cumulative revenues earned by Principal Activities since 2009, given that there was no change to the composition of our reportable segments in 2017 that would have required a restatement of the corresponding information from earlier periods.

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However, in response to the Staff’s comment regarding ASC 280-10-50-36, in future filings we will disclose in tabular format the effect where relevant of this change to the Principal Activities segment allocation methodology on our reported measure of segment profit or loss. This disclosure will be substantially similar to the following:

The 2016 allocation to Principal Activities was based on revenues earned by Principal Activities, relative to other operating segments revenue, over the preceding four calendar years. Had the allocation for 2016 been based on cumulative revenues earned by Principal Activities since 2009, consistent with our allocation methodology adopted in 2017, the expense allocation to Principal Activities would have been 28.7% and would have had the following impact on Economic Net Income across each of our reporting segments:

Three Months Ended September 30, 2016

Nine Months Ended September 30, 2016

Private Markets

4,856

14,515

Public Markets

3,400

10,103

Capital Markets

739

2,188

Principal Activities

(8,995

(26,806

Total Economic Net Income

-

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We note your inclusion of a new fourth segment called Principal Activities, which includes all income (loss) on investments previously reported in the Private Markets, Public Markets or Capital Markets segments. We also note from your disclosure on page 231 that you allocated goodwill entirely to the Public Markets segment.

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Given the change to your segment reporting structure, please tell us how you considered ASC 350- 20-35-45 in determining whether a reallocation of goodwill using a relative fair value approach was required.

We respectfully advise the Staff that we considered ASC 350-20-35-45 and we did not reallocate goodwill from Public Markets to Principal Activities because the amount was immaterial. We estimate the goodwill subject to reallocation in connection with the establishment of the Principal Activities segment would have been less than 5% of the segment assets in each of our Public Markets and Principal Activities segments as of December 31, 2015. Read in the reply ↗

We note your discussion of the changes in total fees here and on page 85 regarding the six months ended June 30, 2016 to six months ended June 30, 2015. Expand your disclosure in future filings to discuss each of the components of your fees and other revenue (e.g. Management, Monitoring and Transaction Fees, Net).

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Consider providing a table to facilitate this presentation (similar to that presented on page 25) along with a more granular discussion explaining the respective period-over-period changes. Please also expand your disclosure in your segment MD&A, as necessary.

to the Staff’s comment, in future filings we will expand our disclosures to discuss each of the material components of our fees and other revenue (e.g. Management, Monitoring and Transaction Fees, Net). We will discuss period-over-period changes to such components to the extent material, including in the segment MD&A as necessary. Read in the reply ↗

Expand your disclosure in future filings to discuss each of the components of your expenses (e.g. Compensation and Benefits, Occupancy and related charges, and Other operating expenses) and provide a more granular discussion explaining the respective period-over-period changes. Please also expand your disclosure in your segment MD&A, as necessary.

to the Staff’s comment, in future filings we will expand our disclosures to discuss each of the material components of our expenses (e.g. Compensation and Benefits, Occupancy and related charges, and Other operating expenses). We will discuss period-over-period changes to such components to the extent material, including in the segment MD&A as necessary.

As stated on the SEC’s website, the Staff provides comments to a company “when it notes instances where it believes a company can enhance its disclosure or improve its compliance with the applicable disclosure requirements”.

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The Company acknowledges that the Staff’s comments above have been provided to the Company in an effort to enhance its disclosures to investors, and the Company’s responses similarly have been provided to the Staff with those goals in mind. To the extent that in response to a comment from the Staff the Company has agreed to provide additional or revised disclosure in a future filing, such agreement is not and should not be considered an admission by the Company as to the inadequacy or inaccuracy of any prior filing, any deficiency in internal controls or disclosure controls, or any violation of federal securities laws, material or otherwise.

As requested by the Staff, we acknowledge that, with respect to filings made by us:

· We are responsible for the adequacy and accuracy of the disclosure in the filing;

· Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

· We may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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