KKR's earnings rise 20pc on strong management fees

Private equity firm KKR & Co Inc said on Wednesday its first-quarter adjusted net income jumped 20 per cent year-on-year, driven by strong management and transaction fees as well as earnings from its annuities business.

KKR's adjusted net income rose to $863.7 million from $719.3 million a year earlier. That resulted in adjusted net income per share of 97 cents, which was slightly ahead of the average analyst estimate of 96 cents, according to LSEG data.

Fee-related earnings rose 22 per cent to $668.7 million, buoyed by income KKR generates from fees associated with managing $578 billion worth of total assets in addition to transaction fees from arranging financing from its own deals, reports Reuters

KKR's earnings from investing the capital of its annuities business Global Atlantic rose 33 per cent to $273 million. During the quarter, KKR completed the $2.7 billion deal to acquire the remaining 37 per cent stake in Global Atlantic that it doesn't already own.

Dividends from KKR's "strategic holdings", which are mostly private equity investments that it plans to hold for relatively longer periods, reached $20.7 million in the quarter.

KKR's private equity portfolio appreciated by 5.0 per cent, opportunistic real estate funds gained 1.0 per cent, and leveraged credit funds added 3.0 per cent.

By contrast, Blackstone reported that its corporate private equity funds appreciated by 3.4 per cent, liquid credit funds gained 2.5 per cent, and opportunistic real estate funds were flat.

KKR's net income under generally accepted accounting principles more than doubled to $682.2 million, driven by growth in revenues from Global Atlantic.

It raised $31 billion of new capital, invested $14 billion, retained $98 billion of unspent capital, and declared a quarterly dividend of 17.5 cents.