01—Abstract
Summary
Summary of the 10-K filed February 23, 2018. Cited figures are marked; the original filing is the authoritative source.
KKR & Co. Inc. (KKR) reported strong financial performance in its 2017 10-K filing, driven by significant growth in its Private Markets and Public Markets segments.
The firm demonstrated robust asset growth, reaching $116.5 billiona in Private Markets AUM and $70.9 billion in Public Markets AUM. This growth was fueled by successful fundraising efforts and positive investment performance across various asset classes.
Key financial highlights include substantial growth in Fees and Other revenue, primarily driven by a significant increase in transaction fees and carried interest, reflecting strong realized performance across its investment funds. The firm's commitment to its core investment strategies, coupled with strategic expansions into new asset classes and geographies, positions KKR for continued growth and value creation for its investors.
02—Key points
Key Highlights
- KKR reported strong growth in Assets Under Management (AUM), reaching $116.5 billion in Private Markets and $70.9 billion in Public Markets as of December 31, 2017.
- Fees and Other revenue increased significantly to $3.3 billion in 2017, up from $1.9 billion in 2016, primarily due to higher carried interest and transaction fees.
- Net Income Attributable to KKR & Co. L.P. Common Unitholders reached $984.9 million in 2017, a substantial increase from $287.1 million in 2016, reflecting strong investment performance.
- The firm's Private Markets segment saw a 23.3% increase in the value of its private equity investment portfolio and a 21.7% increase in its infrastructure investment portfolio, contributing to strong carried interest generation.
- Public Markets segment AUM grew by $15.2 billion, reaching $70.9 billion, driven by new capital raised across various strategies and positive investment performance.
- KKR maintained a disciplined capital allocation strategy, with $5.7 billion in uncalled commitments to its investment funds as of December 31, 2017, indicating future investment capacity.
- The firm continued its unit repurchase program, demonstrating a commitment to returning capital to shareholders.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 23, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $3.56B$2.04B | +74.4% |
| Interest Expense | $808.90M$789.95M | +2.4% |
| Net Income | $1.02B$309.31M | +229.2% |
05—Questions
Frequently Asked Questions
What were KKR's primary sources of revenue in 2017?
KKR's primary sources of revenue in 2017 were Fees and Other, which include management, monitoring, transaction, and performance fees (including carried interest), and Investment Income (Loss), which consists of realized and unrealized gains and losses on investments.
How did KKR's Assets Under Management (AUM) change in 2017?
KKR's AUM experienced significant growth in 2017. Private Markets AUM increased by $23.7 billion to $97.5 billion, driven by new capital raised and an increase in portfolio value. Public Markets AUM increased by $15.2 billion to $70.9 billion, also driven by new capital and strategic transactions.
What was the most significant factor driving the increase in KKR's net income in 2017?
The increase in net income in 2017 was primarily driven by higher carried interest gains, reflecting strong appreciation in the value of its private equity and credit portfolios, and higher net gains from investment activities. This was partially offset by an increase in expenses.
How did the 2017 Tax Act impact KKR's financial results?
The 2017 Tax Act, which reduced the U.S. federal corporate tax rate to 21% effective January 1, 2018, led to a provisional income tax expense of $97.9 million in 2017 for KKR, primarily due to the remeasurement of deferred tax assets and liabilities.
06—Continue