KKR raises record US$16.4b with Asia funds driving demand

[NEW YORK] KKR & Co attracted a record amount of cash in the second quarter as investors looked to capitalise on the turmoil unleashed by the Covid-19 pandemic.

The New York-based alternative asset manager raised US$16.4 billion, it said Tuesday, surpassing its previous peak from the fourth quarter of 2017. The boost was driven by demand for buyout and infrastructure strategies in Asia, as well as real estate and credit dislocation funds.

Some private equity firms are bringing in money at a rapid clip amid this year's market upheaval as investors search for yield. Blackstone Group also benefited from a strong fundraising quarter.

Private equity executives have been touting their ability to navigate the coronavirus crisis, and the industry is flush with US$1.56 trillion of unspent money, according to researcher Preqin.

KKR, founded by George Roberts and Henry Kravis, held US$67 billion in dry powder at the end of June and has been one of the industry's busiest dealmakers during the pandemic. The buyout giant is approaching US$11 billion in capital for what could be a US private equity firm's largest ever fund.

Here are KKR's second-quarter financial highlights:

Distributable earnings of 39 US cents beat the average estimate of 36 US cents among analysts surveyed by Bloomberg.

Fee-related earnings fell 15 per cent from a year earlier to US$244.6 million.

KKR and its rivals have seen their portfolios bounce back, aided by the stock market's recovery from its March low. Drug developer BridgeBio Pharma rose 12 per cent.

Helped by several big asset sales, realised performance income jumped 52 per cent from a year earlier to US$355 million.

Assets under management increased 7.1 per cent from the prior quarter to US$221.8 billion. Fee-paying assets rose less than 1 per cent to US$160.3 billion.

BLOOMBERG