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1 Main Capital, a boutique investment firm, recently released its first-quarter 2026 investor letter. A copy of the letter is available to download here. The fund returned -4.6% for the quarter, compared to -4.4% for the S&P 500 and +0.9%  for the S&P 500 and the Russell 2000, respectively. Small-cap stocks started 2026 with significant momentum and continued to lead throughout the quarter. The overall macroeconomic environment remains supportive; however, the conflict in Iran has introduced a significant wildcard in the latter part of the quarter. The firm maintains confidence that its portfolio is well-positioned for a strong potential performance moving forward. In addition, you can check the Fund’s top 5 holdings to find out its best picks for 2025.

In its first-quarter 2026 investor letter, 1 Main Capital highlighted stocks like KKR & Co. Inc. (NYSE:KKR). KKR & Co. Inc. (NYSE:KKR) is a leading private equity and real estate investment firm focusing on direct and fund-of-fund investments. On May 1, 2026, KKR & Co. Inc. (NYSE:KKR) closed at $103.68 per share. One-month return of KKR & Co. Inc. (NYSE:KKR) was 13.87%, and its shares lost 9.68% over the past 52 weeks. KKR & Co. Inc. (NYSE:KKR) has a market capitalization of $96.02 billion.

1 Main Capital stated the following regarding KKR & Co. Inc. (NYSE:KKR) in its Q1 2026 investor letter:

"During the quarter, the Fund reinitiated a core position in KKR & Co. Inc. (NYSE:KKR) after it declined more than 30%, caught up in a private credit scare that was exacerbated by the previously mentioned Citrini report. As a reminder, the Fund profitably owned KKR from 2019 to 2024, with the view that alternative asset managers ("alts") would take share from traditional asset managers, and that KKR was one of the top-tier firms ("mega alts") positioned to take share within the alts.

Since we initially invested, KKR's AUM has more than tripled from $200 billion to $700 billion. In 2026, the firm should generate over $5 billion of annual management fees at 70% operating margins, split roughly evenly across private equity (37%), real assets (33%), and credit (30%). PE, the most mature of the three, continues to grow AUM and fees at a double-digit pace. Real assets AUM has grown 8x to $200 billion since 2019, the Asia platform has grown 4x to $80 billion, and its K-Series retail platform more than doubled AUM to $34 billion in 2025 alone…” (Click here to read the full text)

KKR & Co. Inc. (NYSE:KKR) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 76 hedge fund portfolios held KKR & Co. Inc. (NYSE:KKR) at the end of the fourth quarter, compared to 89 in the previous quarter. While we acknowledge the potential of KKR & Co. Inc. (NYSE:KKR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered KKR & Co. Inc. (NYSE:KKR) and shared Ariel Appreciation Fund's views on the company. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.