01—Abstract
Summary
Summary of the 10-K filed February 26, 2016. Cited figures are marked; the original filing is the authoritative source.
KKR & Co. Inc. (KKR) reported its annual results for the period ending December 30, 2015.
The firm demonstrated resilience in its diverse asset management business, which spans private equity, energy, infrastructure, real estate, credit, and hedge funds. KKR's strategy of investing its own capital alongside its fund investors, coupled with its global platform and operational expertise, positions it to generate attractive returns across various economic conditions. The company's Private Markets segment, encompassing private equity and real assets, continued to be a significant driver of Assets Under Management (AUM), reaching $79.8 billiona in total commitments.
The Public Markets segment also showed growth, with AUM of $53.5 billionb, primarily driven by credit and hedge fund strategies. KKR's financial performance was impacted by market volatility, particularly in the energy sector and broader equity markets, leading to unrealized losses that offset gains in other areas. Despite these challenges, the firm maintained strong client relationships and continued to focus on long-term value creation for its investors.
02—Key points
Key Highlights
- KKR managed a diverse portfolio across multiple asset classes, including private equity, real assets, credit, and hedge funds, with total commitments in Private Markets reaching $79.8 billion and Public Markets AUM at $53.5 billion as of December 31, 2015.
- The firm reported Net Income Attributable to KKR & Co. L.P. of $488.5 million for the year ended December 31, 2015, compared to $477.6 million in 2014, indicating stable performance.
- KKR's Private Markets segment saw an increase in AUM to $66.0 billion, driven by new capital raised in funds like European Fund IV and Global Infrastructure Investors II, despite significant distributions to fund investors.
- The Public Markets segment experienced growth in AUM to $53.5 billion, fueled by new capital and strategic acquisitions, particularly in credit and hedge fund strategies.
- The company's balance sheet reflects a significant commitment to its own funds, with approximately $12.3 billion invested or committed as of December 31, 2015, demonstrating alignment with fund investors.
- While reporting net gains from investment activities, KKR also noted the impact of market volatility, particularly a $2 billion realized loss related to Energy Future Holdings on a consolidated basis, which was previously marked at zero on an unrealized basis.
- KKR maintained a strong distribution policy, announcing a change to equal quarterly distributions of $0.16 per common unit, reflecting a commitment to returning capital to unitholders.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 26, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Interest Expense | $573.23M$317.19M | +80.7% |
| Net Income | $488.48M$477.61M | +2.3% |
05—Questions
Frequently Asked Questions
What was KKR's overall financial performance in 2015?
For the year ended December 31, 2015, KKR & Co. L.P. reported a Net Income Attributable to KKR & Co. L.P. of $488.5 million. This represents a slight increase from the $477.6 million reported in 2014, indicating stable financial performance despite market volatility.
How did KKR's Assets Under Management (AUM) perform in 2015?
KKR's Private Markets segment saw its AUM grow to $66.0 billion, driven by new capital raised in funds like European Fund IV and Global Infrastructure Investors II. The Public Markets segment also experienced growth, with AUM reaching $53.5 billion, primarily due to new capital and strategic acquisitions in credit and hedge fund strategies.
What were the key drivers of KKR's investment income in 2015?
KKR's investment income was driven by private equity investments, which generated net unrealized gains. However, this was partially offset by unrealized losses and realized losses in other segments, notably a $2 billion realized loss on Energy Future Holdings and declines in the energy sector impacting real assets. The firm also noted a decline in the value of publicly traded securities due to market volatility.
How did KKR manage its capital and liquidity in 2015?
KKR demonstrated a strong commitment to its own funds, with approximately $12.3 billion invested or committed across its business as of December 31, 2015, aligning its interests with fund investors. The company also maintained a robust distribution policy, announcing a change to quarterly distributions of $0.16 per common unit, reflecting its commitment to returning capital to unitholders.
06—Continue