KKR’s performance improves
KKR & Company (KKR) has seen a recovery in the past couple of quarters after posting substantial losses in 1Q16. In 3Q16, the company posted EPS (earnings per share) of $0.71, beating Wall Street analyst estimates of $0.65.
The substantial sequential growth was helped by performance fees and new assets. The company posted distributable after-tax income of $461 million in 3Q16, as compared to $331 million in 3Q15.
In 3Q16, KKR’s holdings in First Data (FDC) saw some recovery after a dismal performance in the previous quarter. The stock rose 24% in 3Q16. The recovery has helped nullify KKR’s unrealized losses.
Alternative asset managers have reported improved numbers in 3Q16 on rises in broad markets. KKR’s private equity portfolio rose 5.8% on a rebound in equities (SPY). Its major investments include Zimmer-Biomet Holdings (ZBH), Walgreens Boots Alliance (WBA), HCA Holdings (HCA), and GoDaddy (GDDY).
Income and AUM
KKR’s economic net income reflects both its realized and unrealized investment gains. The company reported an economic net income of $598.2 million in 3Q16, as compared to an economic net loss of $314.8 million in 3Q15.
On September 30, 2016, the company’s assets under management and its fee-paying assets under management stood at $131 billion and $93.1 billion, respectively. These amounts represent rises of 17% and 8%, respectively, year-over-year.
An alternative investment giant
Founded 37 years ago, KKR provides investment management services to investors and limited partners. Limited partners provide and commit capital to private equity players in an effort to generate superior returns. KKR also provides capital market services to its own company, its portfolio companies, and its external clients.
In this series, we’ll examine KKR’s private and public markets, assets under management, balance sheet, distribution, and valuations.