By Isla Binnie and Pritam Biswas
May 5 (Reuters) – KKR raked in higher fees from managing a growing pile of assets and made more money from deals, pushing its first-quarter earnings ahead of Wall Street expectations on Tuesday.
Shares of the company rose about 1% in trading before the bell. The New York-based group raised $28 billion of fresh capital, driven by flows into the credit business which is the biggest segment of its $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, monetization 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%, to $1.2 billion. Overall adjusted net income hit $1.2 billion, which translated to $1.39 per share.
Analysts were expecting a profit of $1.29 per share, according to estimates compiled by LSEG. Gross returns from its private equity and credit funds slowed. The traditional private equity portfolio returned 1% in the first quarter, compared with 10% 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% versus 5% and 4% respectively in the last twelve months.
KKR’s shares have recovered some ground since reaching a trough in March, but are still trading around 19% lower on the year.
(Reporting by Isla Binnie in New York and Pritam Biswas in Bengaluru; Editing by Arun Koyyur)
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