KKR & Co posted a fourth-quarter profit that beat Wall Street estimates, fuelled by record fee-related earnings and strength in its Global Atlantic insurance business.

After-tax distributable earnings rose 4 per cent to US$888 million, or US$1 a share, the company said on Tuesday (Feb 6). That beat the US$0.93 average estimate of analysts surveyed by Bloomberg.

Fee-related earnings rose 21 per cent during the quarter to US$675 million on growth in management fees and KKR’s capital markets unit, which arranges financing.

While higher interest rates have sharply curtailed dealmaking and fundraising across the private equity industry – leaving firms struggling to sell assets and return cash to investors – credit and insurance have become sources of strength 

KKR reported US$359.6 million in realised carried interest for the three months ended Dec 31, an 85 per cent increase from a year earlier, as the company exited more investments.

“With three avenues for long-term sustained growth – asset management, insurance and strategic holdings – we are well positioned for the years ahead,” co-chief executive officers Joe Bae and Scott Nuttall said.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

In November, the company agreed to acquire the remaining 37 per cent of Global Atlantic that it did not already own for about US$2.7 billion. It also announced a new strategic holdings segment that would hold its core private equity investments.

Shares of New York-based KKR have gained more than 50 per cent over the past 12 months.

KKR is preparing to embark on a fundraising drive for its flagship strategies, including Americas private equity and Asia private equity, amid the industry’s sustained fundraising downturn. BLOOMBERG