KKR's quarterly profit soars 58% on record-high fee income

KKR's quarterly profit soars 58% on record-high fee income

FILE PHOTO: Trading information for KKR & Co is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS/Brendan McDermid/File Photo

Alternative fund manager KKR & Co reported a 58% jump in adjusted net income for the third quarter of 2024, driven by record fee-related income, as well as earnings from its insurance business.

The New York-based firm said on Thursday adjusted net income (ANI) rose to $1.2 billion in the July-September quarter, or $1.38 per adjusted share. That was ahead of the average analyst estimate of $1.21, according to LSEG data.

KKR achieved its highest-ever fee-related earnings of $1 billion, up 79% from the previous year. This growth was driven by fees generated from managing $624 billion in total assets, an 18% increase year-over-year, along with transaction fees from its capital markets business.

For the quarter, KKR reported a record total operating earnings of $1.3 billion, a 71% year-over-year increase. This metric includes fee-related earnings from its asset management business, returns from long-term private equity holdings, and profits from its Global Atlantic insurance division.

The firm’s fee-paying assets under management (AUM) rose by 19% to $506 billion.

KKR raised $24 billion in new capital during the quarter, up from $14 billion same quarter last year.

Its private equity portfolio appreciated by 5% in the quarter, infrastructure funds gained 6% and opportunistic real estate funds rose 2%.

It also deployed $24 billion in investments, up from $9 billion one year ago, and declared a quarterly dividend of 17.5 cents.

KKR announced a series of deals in the last few months, including the acquisition of Varsity Brands, a maker of sports uniforms and school yearbooks, for about $4.75 billion, with the deal closing in August.

It reached a deal to take education software platform Instructure Holdings private for $4.8 billion. KKR also offloaded half of its position in Kokusai Electric.

Reuters

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