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KKR Realized Performance, Investment Income Declined in 1Q16

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Nov. 20 2020, Updated 5:27 p.m. ET

Realizations

In 1Q16, KKR & Co. (KKR) saw its distributable earnings decline on lower bookings. The company made realized performance income of $99 million compared to $308 million in 1Q15.

KKR’s realized investment income also declined sharply to $35 million in 1Q16 compared to $231 million in 1Q15.

KKR’s peers posted the following debt-to-asset ratios:

  • Carlyle Group (CG): 48%
  • Blackstone Group (BX): 28%
  • Apollo Global Management (APO): 65%

In comparison, KKR’s total debt-to-asset ratio was 16.5%. It was the lowest among its alternative investment peers that form part of the iShares US Financials ETF (IYF).

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Moderate leverage

KKR’s debt-to-equity ratio deteriorated marginally in 1Q16 compared to 4Q15. The company’s total debt obligations and preferred share obligations stood at $3.0 billion as of March 31, 2016. That was in line with the numbers for December 31, 2015. Its debt obligations included KKR Financial Holdings’ (KFN) debt obligations of $657.3 million and 7.4% Series A preferred shares worth $373.8 million. The company had $1.5 billion in cash and short-term investments.

As of March 31, 2016, KKR has an undrawn $1 billion revolving credit facility. In addition, it has an undrawn $500 million revolving credit facility for use in its capital markets business. KKR’s portion of total uncalled commitments to its investment funds was $1.9 billion. Its debt-to-equity ratio rose to 0.32x in 1Q16 compared to 0.30x as of December 31, 2015.

KKR’s balance sheet and leverage position have remained moderate. The company is using debt financing to fund some of its acquisitions in order to take advantage of lower interest rates.

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