01—Abstract
Summary
Summary of the 10-K filed February 15, 2019. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 billionb attributable to Class A common stockholders.
02—Key points
Key Highlights
- Total Assets of $50.7 billion and Total Stockholders' Equity of $8.6 billion as of December 31, 2018.
- Total Revenues of $2.4 billion for the year ended December 31, 2018.
- Net Income Attributable to KKR & Co. Inc. Class A Common Stockholders was $1.1 billion for the year ended December 31, 2018.
- Assets Under Management (AUM) grew to $194.7 billion, with Fee-Paying Assets Under Management (FPAUM) at $141.0 billion.
- Private Markets AUM reached $103.4 billion, driven by new capital raised and portfolio growth.
- Public Markets AUM increased to $91.3 billion, bolstered by growth in credit strategies and hedge fund partnerships.
- Capital Markets business showed increased transaction fees, reflecting strong syndication and underwriting activity.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed February 15, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $2.40B$3.56B | −32.6% |
| Interest Expense | $876.03M$808.90M | +8.3% |
| Net Income | $1.13B$1.02B | +11.1% |
05—Questions
Frequently Asked Questions
What were KKR's primary sources of revenue in 2018?
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.
How did KKR's Assets Under Management (AUM) perform in 2018?
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.
What was KKR's net income attributable to Class A common stockholders in 2018?
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.
How does KKR manage its investments and what are the key business segments?
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.
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