Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

KKR profit falls 9% on lower deal fees

Stock Markets Aug 02, 2022 06:55AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Trading information for KKR & Co is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS/Brendan McDermid/File Photo

By Chibuike Oguh

NEW YORK (Reuters) - KKR & Co (NYSE:KKR) Inc said on Tuesday its second-quarter after-tax distributable earnings fell 9% year-on-year, as a slowdown in dealmaking amid the market downturn resulted in a plunge in transaction fees it earns from its companies and clients.

After-tax distributable earnings — which represents the cash used to pay dividends to shareholders — was $840 million in the second quarter, down from $925.5 million a year earlier. That resulted in after-tax distributable earnings per share of 95 cents, in line with the average of Wall Street analysts' estimates and down from $1.05 a year ago.

KKR said much of this was attributed to a decline in transaction fee income, which dropped 61% to $84.6 million during the quarter.

That was because its capital markets business booked fees on fewer deals. The unit charges KKR's portfolio companies a fee for helping them with transactions such as initial public offerings (IPOs) and debt financing. It also acts as an investment bank, helping arrange financing for companies not owned by KKR that pay for its services.

Dealmaking slowed down in the second quarter as rising interest rates and the Russia-Ukraine conflict rattled markets and shook the confidence of executives contemplating mergers and acquisitions. IPOs were few and far between as the volatility deterred most stock market hopefuls.

KKR said its private equity funds depreciated by 7% in the quarter, while its leveraged credit portfolio fell 6%. Its infrastructure fund declined by 1%, and its performance was in line with its peers.

Blackstone (NYSE:BX) Inc, the world's largest alternative asset manager, said last month its private-equity portfolio dropped by 6.7% in the second quarter, while Carlyle Group (NASDAQ:CG) Inc's corporate private equity funds were flat during the quarter.

KKR said it spent $19 billion on new investments, taking advantage of the downturn to snap up assets at bargain prices. It raised $25 billion of new capital through fundraising and generated $723.6 million of carried interest income mostly from asset sales in its private equity unit.

Under generally accepted accounting principles (GAAP), KKR posted a massive paper loss of $827.9 million, compared with a $1.3 billion profit a year ago owing to its asset management loss.

Total assets under management stood at $491 billion, up from $479 billion in the prior quarter. Unspent capital was flat at $115 billion.

KKR declared a regular dividend of 15.5 cents per share.

KKR profit falls 9% on lower deal fees
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email