© Reuters. FILE PHOTO: KKR & Co’s trading information is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, United States, August 23, 2018. REUTERS / Brendan McDermid
By Chibuike Oguh
(Reuters) – Private equity firm KKR & Co (NYSE 🙂 Inc said on Tuesday that its after-tax distributable income for the first quarter had jumped 63% year-over-year, driven by growth in its activities in the financial markets and its holdings in the public markets.
Distributable profit after tax (DE) – cash used to pay dividends to shareholders – increased to $ 660.2 million, from $ 406.3 million the year before. That translated into DE per share of 75 cents, which topped Wall Street analysts’ average estimate of 63 cents, according to financial data provider Refinitiv.
KKR and its peers are selling assets for better prices as the global economy rebounds from the fallout from the COVID-19 pandemic.
The majority of KKR’s divestments came from the sale of stakes in portfolio companies, including sporting goods retailer Academy Sports and Outdoors Inc, pharmaceutical company BridgeBio Pharma (NASDAQ 🙂 Inc and sports betting company FanDuel. .
KKR said transaction costs for its capital markets business more than doubled to $ 112.2 million, from $ 60.2 million the year before. Total realized investment income – which is made up of proceeds from the sale of assets – increased 24% to $ 632.5 million in the quarter. Generally Accepted Accounting Principles (GAAP) net income fell to $ 1.64 billion after a loss a year earlier.
Blackstone Group (NYSE 🙂 Inc, the world’s largest private equity firm, announced last month that its distributable income had more than doubled, driven by divestments of assets in the first quarter. Carlyle Group (NASDAQ 🙂 Inc also posted a 23% increase in its after-tax distributable income as it cashed in more of its holdings.
Private equity, opportunistic real estate and infrastructure portfolios climbed 19%, 6% and 11% respectively, KKR said, adding that its leveraged credit and alternative credit funds increased by respectively. 2% and 7%.
Total assets under management increased to $ 367 billion from $ 252 billion in the previous quarter, driven by strong fundraising and the closing of KKR’s acquisition of Annuities and Insurance Provider- life Global Atlantic Financial Group Ltd.
KKR had $ 69 billion in unspent capital at the end of March and declared a regular quarterly dividend of $ 0.145 per share.
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