KKR & Co. Inc. Quarterly Report for Q3 Ended Sep 30, 2010

Summary

KKR & Co. Inc. (KKR) reported its third quarter 2010 financial results, showcasing a significant increase in Assets Under Management (AUM) to $55.5 billion, up from $30.2 billion in the prior year period. Despite a notable decrease in Fee Related Earnings (FRE) for the Private Markets segment due to lower transaction and monitoring fees, the company saw strong growth in its Public Markets segment, driven by increased incentive fees from KKR Financial Holdings LLC (KFN). The "Capital Markets and Principal Activities" segment experienced a substantial increase in both fees and investment income, largely due to a higher volume of capital markets transactions and positive unrealized gains on private equity investments. Overall, while "Net Income (Loss) Attributable to KKR & Co. L.P." saw a decrease compared to the prior year, primarily due to significant non-cash equity-based charges and lower investment gains, the company's AUM growth and diversification across its business segments indicate a positive trajectory. The company also successfully completed a $500 million Senior Notes offering during the quarter, enhancing its liquidity position.

Key Highlights

• 1Assets Under Management (AUM) grew to $55.5 billion as of September 30, 2010, a substantial increase from $30.2 billion in the prior year.
• 2Total Revenues for the nine months ended September 30, 2010 were $519.9 million, an increase from $451.0 million in the prior year period, driven by strong capital markets activity and increased incentive fees from KFN.
• 3Investment Income (Loss) for the nine months ended September 30, 2010 was $1.2 billion, a decrease from $5.8 billion in the prior year period, primarily due to lower net gains from investment activities.
• 4The company successfully completed a $500 million Senior Notes offering in September 2010, strengthening its financial position.
• 5Despite a decrease in Fee Related Earnings for the Private Markets segment, the Public Markets and Capital Markets segments showed robust growth in fees and economic net income.
• 6The company reported Net Income (Loss) Attributable to KKR & Co. L.P. of $152.6 million for the nine months ended September 30, 2010, a decrease from $927.9 million in the prior year period, largely due to significant non-cash equity-based compensation charges.
• 7KKR & Co. L.P. became listed on the New York Stock Exchange (NYSE) on July 15, 2010, marking a significant milestone in its corporate development.

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