KKR profits rise on growing assets, deals pick up pace in first quarter

KKR earned higher fees from managing a growing pile of assets and it benefited from a pick-up in deals in the first quarter, the buyout firm said on Tuesday.

Shares of the company were up about 1 per cent in trading before the bell.

The New York-based group raised US$28 billion of fresh capital, driven by flows into the credit business which is the biggest segment of its US$758 billion under management.

KKR and its peers have had a bumpy ride on the stock market over the past year as investors fretted about their future growth, artificial intelligence disrupting their portfolio companies and lending standards in private credit.

War in the Middle East then rattled markets and cast a pall over forecasts of brisk dealmaking.

“Against a volatile backdrop, monetisation activity accelerated, and over the past 12 months we’ve invested more capital on behalf of our clients than at any point in our history,” co-CEOs Joseph Bae and Scott Nuttall said.

Fees from managing money for clients, which it earns regardless of how investments perform, jumped 30 per cent, to US$1.2 billion. Overall adjusted net income hit US$1.2 billion, which translated to US$1.39 per share.

Gross returns from its private equity and credit funds slowed. The traditional private equity portfolio returned 1 per cent in the first quarter, compared with 10 per cent across the past twelve months.

Its debt funds dipped into negative territory, with composites for both its leveraged credit and private credit strategies returning -1 per cent versus 5 per cent and 4 per cent respectively in the last twelve months.

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KKR’s shares have recovered some ground since reaching a trough in March, but are still trading around 19 per cent lower on the year. REUTERS