What were KKR's main drivers of revenue growth in this period?

KKR's revenue growth was primarily driven by increases in management fees, transaction fees, and incentive fees. The acquisition of Prisma Capital Partners and new capital raised in the Public Markets segment contributed to higher management fees, while an increase in the size and number of fee-generating investments in the Private Markets segment boosted transaction fees. Higher incentive fees from hedge fund solutions also played a role.

Why did KKR's Net Income Attributable to KKR & Co. L.P. decrease significantly compared to the prior year?

The decrease in net income was largely due to a substantial decline in Net Gains (Losses) from Investment Activities. This was primarily caused by a lower level of net appreciation in KKR's private equity portfolio in the current period compared to the prior year, which had benefited from higher market appreciation and significant realized gains.

How did the acquisition of Prisma Capital Partners impact KKR's financial results?

The acquisition of Prisma Capital Partners significantly contributed to an increase in KKR's total fees, particularly in management and incentive fees within the Public Markets segment. However, it also led to higher operating expenses, primarily in compensation and benefits, and other operating expenses, due to the integration of Prisma's operations and headcount.

What is KKR's current liquidity position?

KKR maintained a strong liquidity position, with cash and short-term investments totaling $1.99 billion on a segment basis as of June 30, 2013. The company also had access to significant unused amounts under its revolving credit facilities.

KKR & Co. Inc. 10-Q Quarterly Report Q2 FY2013

Summary

KKR & Co. Inc. reported its financial results for the period ending June 29, 2013. The company saw a significant increase in total revenues, primarily driven by higher management and transaction fees, bolstered by the acquisition of Prisma Capital Partners and new capital raised. While overall expenses decreased due to lower carry pool allocations and equity-based compensation, investment income experienced a notable decline, mainly from reduced net appreciation in its private equity portfolio. Despite this, the company's Fee Related Earnings (FRE) and Economic Net Income (ENI) showed positive growth, underscoring the resilience of its fee-generating businesses. Total Assets under management (AUM) grew to $54.5 billion for Private Markets and $29.0 billion for Public Markets, indicating successful capital raising efforts and market appreciation. The company maintained a strong liquidity position, with significant cash and short-term investments available. KKR also reaffirmed its commitment to shareholder returns through distributions, announcing a quarterly distribution of $0.42 per common unit. Overall, the results reflect a company navigating a dynamic market environment by focusing on its core strengths while expanding its service offerings.

Financial Highlights

26 data points

Beta

Net Income

$15.13M

Total Assets

$44.81B

Cash & Equivalents

$1.17B

Free Cash Flow

$825.17M

Financial Statements

Beta

Interest Expense	$24.61M
Net Income	$15.13M

Key Highlights

1Total revenues increased significantly to $166.4 million for the quarter and $317.6 million for the six months ended June 30, 2013, up from $112.4 million and $228.7 million respectively in the prior year periods, driven by growth in management, transaction, and incentive fees.
2Net Income Attributable to KKR & Co. L.P. decreased to $15.1 million for the quarter and $208.6 million for the six months, primarily due to a substantial drop in Net Gains (Losses) from Investment Activities, which fell from $1.6 billion to $0.1 billion for the quarter and from $4.7 billion to $2.4 billion for the six months, year-over-year.
3Assets Under Management (AUM) saw an increase, reaching $54.5 billion in Private Markets and $29.0 billion in Public Markets as of June 30, 2013.
4Fee Related Earnings (FRE) increased by $6.4 million to $42.6 million for the quarter and by $9.4 million to $83.4 million for the six months in the Private Markets segment, indicating the growing profitability of its core management fee business.
5The company announced a quarterly distribution of $0.42 per KKR & Co. L.P. common unit, payable on August 20, 2013.
6KKR's total debt obligations increased to $1.7 billion as of June 30, 2013, mainly due to the issuance of $500 million in 5.50% Senior Notes due 2043 in February 2013.
7The acquisition of Prisma Capital Partners in October 2012 contributed to increased fees and operating expenses, particularly in the Public Markets segment.

KKR & Co. Inc. Quarterly Report for Q2 Ended Jun 30, 2013

Summary

Financial Highlights

Key Highlights

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