Returns to investors
KKR & Co. L.P. (KKR) has expanded its assets backed by strong performance of its investment funds. The company has almost doubled its assets under management since 2011.
KKR has also expanded its core business of private equity. The expansion has enabled the company to return a substantial portion of its profits to its investors in the form of dividends.
KKR has increased its dividends on a per share basis from $0.60 in 2010 to $1.90 in 2014 with a dividend yield of 8%. KKR’s dividend yield is higher than some of the major players in the industry such as The Blackstone Group (BX), The Carlyle Group (CG), and Apollo Global Management (APO).
Retirement or growth stock
Blackstone’s dividend payout is higher than traditional asset managers such as BlackRock (BLK), BNY Mellon Asset Management (BK), and Franklin Resources (BEN). Together they make up 3.73% of the Financial Select Sector SPDR Fund (XLF).
So is KKR a good pick for retirement or growth options? KKR has witnessed an increase in capital contribution by its general partners when compared to the total assets under management. The increase reflects aligning of its interests as well as confidence in the bets made by fund managers.
One of the major factors affecting payouts is the fee from net realization activity, or the portion of total fees earned when investments are sold. KKR is expected to improve its realizations in 2015 and 2016 after the expected increase in the valuation of its energy holdings.