KKR Q3 earnings jump on gains from asset sales

By Reuters

  • 25 Oct 2018
Credit: Thinkstock

Private equity firm KKR & Co LP reported its second-highest distributable earnings in its history on Thursday, as its third-quarter earnings were buoyed by the sale of the divestment of its stake in payments processor First Data Corp and the sale of Finish healthcare company Mehilainen.

After-tax distributable earnings (DE) - the actual cash available for paying dividends - totaled $496.7 million for the three months to end-September, up 21.3 percent year over year, KKR said.

KKR rival Blackstone Group LP reported a similar 22.8 percent year-over-year rise in third-quarter DE last week.

KKR said DE per share came in at 60 cents, slightly ahead of analyst consensus for 59 cents.

"Through our differentiated model - the combination of our investment funds, balance sheet and capital markets capabilities - we generated one of the highest distributable earnings quarters in our history," co-Chairmen and co-Chief Executives Henry Kravis and George Roberts said in a statement.

KKR said earlier this year it considers DE as its primary earnings metric, as opposed to economic net income, which reflects the mark-to-market valuation of gains or losses of private equity firms' holdings and is a closely watched measure of performance at peers such as Apollo Global Management and Blackstone.

This focus on DE is part of the firm's efforts to make its stock more accessible to investors, a push which included converting to a corporation from a publicly traded partnership on July 1.

KKR's assets under management grew to $194.6 billion, up 27 percent over the last 12 months, aided by fundraising and assets from debt investment company FS Investment Corp, which moved funds after its partnership with Blackstone ended.

Over the same period, Blackstone's assets under management rose 18 percent to $456.7 billion.