Yet there’s more to this figure than KKR reports in earnings calls and press releases. For the past several years, the firm has been financing a portion of its investments in KKR funds through an obscure corner of the market for asset-backed securities.

Behind the scenes, KKR raises some of the cash it vows to invest in new funds by selling a portion of its stakes in existing ones. The firm bundles the prior investments into what are known as collateralized fund obligations that it sells through private deals — partly to insurers, including several it owns.

While it’s unclear how much money KKR raises through CFOs, the sales tapinto trends driving private equity. Firms are embracing new forms of leverage to push returns higher — at the risk of larger losses — and fund managers are investing far more capital alongside clients. […]