KKR Posts Quarterly Profit, and Raises Record $16 Billion in New Capital

Aug 4, 2020 | News | 0 comments

KKR on Tuesday reported second-quarter after-tax distributable earnings that were nearly flat compared to 2019 as the global investment firm rebounded from losses earlier in the year.

New York-based KKR said after-tax distributable earnings were $325.6 million, or 39 cents an adjusted share, for the quarter ended June 30, compared to $327.3 million or 39 cents a share for the same period in 2019. Distributable earnings refers to the profits that can be used to pay dividends. The results beat Wall Street consensus estimates of 36 cents a share.

“We continued to scale our businesses organically, raising a record amount of capital in the second quarter, while finding opportunities to invest globally on behalf of our limited partners. These strong fundamentals, coupled with our recently announced agreement to acquire Global Atlantic, position us well for future growth,” said Henry R. Kravis and George R. Roberts, KKR co-chairmen and co-CEOs, in a statement.

KKR is the latest investment firm to rebound from losses in the first quarter. Carlyle Group (CG), Apollo Global Management (APO) and Blackstone Group (BX) also reported second-quarter profits.

KKR assets under management rose 8% to $221.76 billion in the second quarter, driven by new capital raised mainly with KKR’s Asia private- equity fund, as well as the firm’s private credit and leveraged credit strategies. Second quarter net income increased to $698.6 million, or $1.24 a diluted share, versus $514.4 million, or 93 cents a diluted share, for the same period in 2019.

The firm also said revenue rose to $1.33 billion for the quarter ended June 30, up from $1.18 billion for the same period in 2019. The increase in revenue was due to a recovery in the financial markets that caused a higher level of carried interest, KKR said.

KKR raised $16 billion of new capital in the second quarter, a record amount for the firm. This was also driven by fundraisings for its Asia Private Equity, Asia Infrastructure, and Core Plus Real Estate funds, as well as its Dislocation strategies, which include separately management accounts and pools.

Last month, KKR said it would buy Global Atlantic Financial Group, which offers retirement, life and insurance products. KKR is paying 1 times the insurer’s book value when the deal closes. Global Atlantic’s book value was $4.4 billion as of March 31. The transaction is expected to cause KKR’s assets under management to rise 33% to $294 billion when it closes in early 2021.

KKR declared a regular dividend of 13.5 cents a share, which will be paid on Sept. 1.

Source: Financial Times

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