01—Abstract
Summary
Summary of the 10-K filed February 18, 2020. Cited figures are marked; the original filing is the authoritative source.
KKR & Co. Inc.'s 2019 10-K filing highlights a strong year for the global investment firm, marked by significant growth in Assets Under Management (AUM) and robust performance across its Private Markets and Public Markets businesses.
The company demonstrated substantial capital raising capabilities, a testament to its diversified strategies and global reach. Key financial drivers included strong carried interest and investment income, reflecting successful realizations and appreciation in its portfolio companies. The firm's commitment to its "one-firm" philosophy and operational expertise continues to be a core differentiator.
Despite a challenging economic environment influenced by global trade tensions, KKR maintained disciplined investment practices and a focus on long-term value creation for its investors. The filing also details the company's strategic initiatives, including the expansion of its credit and real asset platforms, and reiterates its commitment to aligning the interests of its stakeholders through prudent capital allocation and operational excellence.
02—Key points
Key Highlights
- KKR reported significant growth in Assets Under Management (AUM), reaching $218.4 billion by the end of 2019, up from $194.7 billion in the prior year, driven by new capital raised and appreciation in its portfolio.
- The company generated substantial capital allocation-based income, primarily through carried interest and general partner capital interest, reflecting strong performance in its private equity funds.
- Private Markets AUM increased to $119.3 billion, bolstered by new capital raised in various funds and a significant increase in the value of its private equity investment portfolio.
- Public Markets AUM also saw growth, reaching $99.1 billion, supported by increased inflows across credit strategies and hedge fund partnerships.
- The firm reported strong realized performance income, particularly carried interest from its Private Markets segment, driven by successful exits and value creation in portfolio companies.
- KKR maintained a disciplined approach to capital markets activities, although transaction fees experienced a decrease compared to the prior year.
- The company's balance sheet and principal activities continued to support its growth strategies, including funding capital commitments and seeding new initiatives.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 18, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $4.22B$2.40B | +76.2% |
| Interest Expense | $1.04B$876.03M | +19.1% |
| Net Income | $2.01B$1.13B | +77.3% |
05—Questions
Frequently Asked Questions
What was KKR's total Assets Under Management (AUM) at the end of 2019, and how did it change from the previous year?
At the end of 2019, KKR's total AUM was approximately $218.4 billion, representing an increase of $23.6 billion from $194.7 billion at the end of 2018. This growth was driven by new capital raised across various strategies and positive performance in its investment portfolio.
How did KKR's revenue streams perform in 2019 compared to 2018?
Total revenues increased significantly to $4.22 billion in 2019 from $2.40 billion in 2018. This substantial increase was primarily driven by a surge in Capital Allocation-Based Income, which includes carried interest and general partner capital interest, reflecting strong investment performance and realizations. Fees and Other revenue saw a slight decrease, mainly due to higher fee credits and lower transaction fees, partially offset by increased management fees.
What were the key drivers for the increase in KKR's Net Income Attributable to KKR & Co. Inc. Class A Common Stockholders in 2019?
Net Income Attributable to KKR & Co. Inc. Class A Common Stockholders increased to $1.97 billion in 2019 from $1.10 billion in 2018. This growth was primarily fueled by a higher level of net gains from investment activities, particularly in private equity, and a substantial increase in capital allocation-based income, partially offset by higher compensation and benefits expenses and increased interest expense.
How did KKR's compensation and benefits expenses change in 2019, and what were the main reasons?
Compensation and benefits expenses increased significantly to $2.12 billion in 2019 from $1.37 billion in 2018. This increase was mainly due to higher carried interest compensation resulting from the strong appreciation in the value of its private equity portfolio, as well as higher overall profit-sharing arrangements. This was partially offset by lower equity-based compensation charges.
06—Continue