Reuters
Published Aug 07, 2023 07:14AM ET
By Chibuike Oguh
NEW YORK (Reuters) - Private equity firm KKR & Co (NYSE:KKR) Inc said on Monday its second quarter after-tax distributable earnings fell 23% year-on-year as growth in management and transaction fees could not offset a slump in asset sales.
After-tax distributable earnings fell to $652.6 million from $851.2 million a year earlier. That translated to after-tax distributable earnings per share of 73 cents, which was higher that the average Wall Street analyst estimate of 71 cents, according to Refinitiv data.
KKR said its net profit from asset disposals nosedived by nearly 80% to $146.2 million as higher interest rates, inflation and volatility continued to restrict mergers and acquisitions activity in the quarter.
KKR's peers Blackstone (NYSE:BX) Inc and Carlyle Group (NASDAQ:CG) Inc also reported a slump in asset sales that resulted in a drop in their second quarter distributable earnings. Apollo Global Management (NYSE:APO) Inc, on the other hand, saw its adjusted net income soar by 75%, driven mostly by earnings from its annuities business, although its asset divestments were flat.
Fee-related earnings - which KKR generated largely from management and transaction fees - rose by nearly 31% to $602.3 million as the firm managed more assets and earned increased fees for syndicating the debt of mostly its own deals.
During the quarter, KKR said its private equity portfolio appreciated by 5%, leveraged credit funds rose 3%, while opportunistic real estate funds were flat. By contrast, the private equity funds of Blackstone, Carlyle and Apollo rose 3.5%, 1%, and 2.1%, respectively.
KKR reported a net income under generally accepted accounting principles (GAAP) of $844.4 million, compared with a net loss of $734.6 million a year earlier, owing to a jump in investment income.
Total assets under management rose to $519 billion, up nearly 2% from the prior quarter, due to fundraising activity. Unspent capital stood at $100 billion.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.