KKR to Experience a Rise in Management Fees in 2Q17



Performance in 2Q17

Wall Street analysts expect KKR & Company (KKR) to report its 2Q17 earnings on July 27, 2017. Analysts expect KKR to post earnings per share (or EPS) of $0.66 in 2Q17, reflecting a marginal rise compared to its 1Q17 EPS and a significant rise on a year-over-year (or YoY) basis.

This rise is expected to result from a rise in management fees from the company’s Asian Fund III. KKR’s management expects the Asian Fund III to add more than $50 million to its management fees by 2Q17. KKR is expected witness higher transactions in its capital market division in 2Q17, which could help it to generate higher transaction fees in 2Q17.

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1Q17 performance

KKR saw its transaction fees rise from $96 million in 1Q16 to $243 million in 1Q17. This rise was mainly due to a higher amount of transactions being carried out by the company’s capital market division. In 1Q17, the capital market division generated $121 million in transaction fees.

KKR reported performance income of $348.5 million in 1Q17, mainly due to its realized and unrealized carried interest.

KKR’s 1Q17 assets under management (or AUM) stood at $137.6 billion, reflecting a sequential rise of 6.2%. Alternative asset managers (XLF) had the following AUMs on March 31, 2017:

  • Carlyle Group (CG): $162 billion
  • Apollo Global Management (APO): $197.5 billion
  • Blackstone (BX): $368.2 billion

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