KKR expands its balance sheet
KKR is improving its performance. Over the past five years, it has expanded its balance sheet with an average growth rate of 18%. The general partner’s capital and other investments in KKR funds and transactions were valued at $9.8 billion as of December 31, 2014.
The contribution by the general partners was higher than a few of its competitors such as The Blackstone Group (BX), The Carlyle Group (CG), Apollo Global Management (APO), and other traditional and diversified asset managers that form part of the Financial Select Sector SPDR Fund (XLF).
KKR’s book value has expanded to $10 billion compared to the market value of $19.5 billion reflecting moderate valuations.
Well capitalized with minimum leverage
KKR has a leverage of less than one. It is well placed to take advantage of low interest rate economies. The company also has ample liquidity with $1.1 billion in cash and equivalents as of December 31, 2014.
KKR has an issuer credit rating of A from the S&P. This reflects the company’s stable financial profile as viewed by the rating agency. The company’s performance was relatively poor in 2014 due to its energy holdings. However, it managed to generate a 16% return and 21% cash return on average book equity.
KKR’s leverage is in line with other players in the industry such as The Blackstone Group (BX), The Carlyle Group (CG), Apollo Global Management (APO), and asset managers that form part of the Financial Select Sector SPDR Fund (XLF).