10-KPeriod: FY2018

KKR & Co. Inc. Annual Report, Year Ended Dec 31, 2018

Filed February 15, 2019For Securities:KKRKKRTKKR-PDKKRS

Summary

KKR & Co. Inc.'s 2018 10-K filing reveals a robust global investment firm with a diversified portfolio across private equity, real assets, credit, and capital markets. The firm demonstrated significant growth in Assets Under Management (AUM), reaching $194.7 billion, with Fee-Paying AUM (FPAUM) of $141.0 billion, highlighting strong investor confidence and capital deployment capabilities. The company's performance in Private Markets remains a core strength, with substantial capital commitments and impressive historical gross IRRs significantly outperforming market indices. The firm's expansion into Public Markets, particularly credit and hedge fund strategies, and its strategic partnerships, like the BDC partnership with FS Investments, are key growth drivers. Despite a challenging market environment for equity and credit in 2018, KKR's diversified business model and patient investment approach contributed to a net income of $1.1 billion attributable to Class A common stockholders.

Financial Highlights

35 data points
Beta

Revenue

$2.40B

Net Income

$1.13B

47.2% Net Margin

Total Assets

$50.74B

Cash & Equivalents

$2.64B

Free Cash Flow

-$7.71B

Financial Statements
Beta
Revenue$2.40B
Interest Expense$876.03M
Net Income$1.13B

Key Highlights

  • 1Total Assets of $50.7 billion and Total Stockholders' Equity of $8.6 billion as of December 31, 2018.
  • 2Total Revenues of $2.4 billion for the year ended December 31, 2018.
  • 3Net Income Attributable to KKR & Co. Inc. Class A Common Stockholders was $1.1 billion for the year ended December 31, 2018.
  • 4Assets Under Management (AUM) grew to $194.7 billion, with Fee-Paying Assets Under Management (FPAUM) at $141.0 billion.
  • 5Private Markets AUM reached $103.4 billion, driven by new capital raised and portfolio growth.
  • 6Public Markets AUM increased to $91.3 billion, bolstered by growth in credit strategies and hedge fund partnerships.
  • 7Capital Markets business showed increased transaction fees, reflecting strong syndication and underwriting activity.

Frequently Asked Questions

KKR's primary sources of revenue in 2018 were Fees and Other, which generated $1.84 billion, and Capital Allocation-Based Income (including carried interest and general partner capital), which generated $554.5 million. Fees and Other were driven by management fees, transaction fees, and expense reimbursements, while Capital Allocation-Based Income was impacted by a decrease in carried interest compared to the prior year.

KKR's total AUM increased to $194.7 billion as of December 31, 2018, up from $168.5 billion in the prior year. This growth was driven by new capital raised across its Private Markets ($14.8 billion) and Public Markets ($19.3 billion) business lines, as well as favorable changes in the value of its investments.

For the year ended December 31, 2018, Net Income Attributable to KKR & Co. Inc. Class A Common Stockholders was $1.1 billion. This represents a notable increase from the prior year, partly due to a tax benefit recognized on the date of the Company's Conversion to a corporation.

KKR operates as a global investment firm with a 'one-firm' approach, managing capital across four business lines: Private Markets (private equity, real assets), Public Markets (credit, hedge funds), Capital Markets, and Principal Activities (managing the firm's own assets). The firm emphasizes deep industry knowledge, a global platform, and an operational focus to create value in its portfolio companies. Investments are managed through a rigorous due diligence process and active portfolio oversight.