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KKR earnings rise, as private-equity portfolio climbs

2 min read . Updated: 02 Nov 2021, 06:32 PM IST MIRIAM GOTTFRIED, The Wall Street Journal

Firm’s private-equity portfolio rose 9% during the quarter

KKR & Co. reported an increase in third-quarter earnings, and the portion of profits that it could return to shareholders more than doubled.

The private-equity firm reported net income of $1.13 billion, or $1.80 per share, in the quarter ended Sept. 30 versus $1.06 billion, or $1.79 a share, a year earlier.

Helping to drive the gain was a 9% appreciation in KKR’s private-equity portfolio, including an 11% gain in its flagship funds. Both figures easily exceeded the 0.2% gain for the S&P 500 during the period.

KKR’s distributable earnings, a closely watched measure of cash that could be returned to shareholders, came in at $925.1 million, or $1.05 a share. That is compared with $452.8 million, or 53 cents a share, in the same period a year ago. The per-share figure ties with the second quarter of this year for the firm’s highest distributable earnings on record.

During the quarter, KKR sold off stakes in vitamin-maker Bountiful Co., Ingersoll-Rand Inc. and Academy Sports & Outdoors Inc., among others.

KKR stock has shot up this year, along with those of its publicly traded peers. Including dividends, the firm’s shares had climbed 97% year to date as of Monday’s close, compared with a 26% total return for the S&P 500, according to Fact Set.

The firm reported record fee-related earnings of $529.6 million, or 60 cents a share, versus $324 million, or 38 cents a share a year earlier. Driving that was a $28 billion fundraising haul during the third quarter, over 90% of which came from non-private equity businesses such as credit and real estate.

“It was really broad-based," KKR Chief Financial Officer Robert Lewin told The Wall Street Journal. “We believe our investment performance has been differentiated and our fundraising success has largely followed that."

KKR has raised $100 billion since the beginning of the year, about half of which came from businesses the firm wasn’t in five years ago, he said.

Assets under management were $459.08 billion, up 7% from the second quarter and 96% year over year. In February KKR closed a deal to buy a majority stake of insurance company Global Atlantic Financial Group Ltd., adding about $90 billion to its assets under management.

In October, KKR co-CEOs Henry Kravis and George Robertsformally handed the reins to Scott Nuttall and Joe Bae. Messrs. Kravis and Roberts, two pioneers of the private-equity industry, will continue to serve as co-executive chairmen.

This story has been published from a wire agency feed without modifications to the text

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