KKR & Co. reported second-quarter earnings that beat estimates, despite falling 23% from a year ago amid a private equity deal drought.
(Bloomberg) — KKR & Co. reported second-quarter earnings that beat estimates, despite falling 23% from a year ago amid a private equity deal drought.
The alternative asset manager reported $653 million in after-tax distributable earnings, or 73 cents a share, New York-based KKR said in a statement Monday. That beat the 71-cent average estimate of analysts surveyed by Bloomberg.
Shares of KKR rose 4.1% to $62.59 at 11:09 a.m. in New York.
“We have never been more confident in our model and our prospects, which is one of the reasons why you saw us buy back some of our stock in the quarter,” Chief Financial Officer Robert Lewin said on an earnings call Monday.
Fee-related earnings rose 31% to $602 million during the quarter ended June 30, driven by strong capital markets activity and management fees.
Private equity firms have been contending with higher interest rates, a difficult fundraising environment and a sluggish market for dealmaking.
In the earnings call, KKR leadership expressed optimism that dealmaking would continue picking up, noting that the tone around the new-deal pipeline has started to change in the last several weeks.
“It feels like the markets are thawing a bit,” Craig Larson, KKR’s head of investor relations, said.
Realized investment income from selling assets fell 58.6% to $114.7 million and realized performance income, or carried interest, fell 79.6% to $149.3 million.
KKR’s assets under management grew 6% year-over-year to $519 billion, driven by $8 billion in credit and liquid strategies.
Global Atlantic reported a 5.8% decline in operating earnings to $170.2 million during the quarter due to a higher net cost of insurance from adding new business, as well as higher funding costs.
Other second-quarter highlights:
- Uncalled commitments totaled $100 billion at quarter-end
- KKR’s traditional private equity portfolio gained 5%
- Its leveraged credit composite portfolio rose 3% while its alternative credit assets gained 2%
KKR shares are up about 35% year-to-date.
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