KKR & Co. Inc. Quarterly Report for Q2 Ended Jun 30, 2017

Summary

KKR & Co. Inc.'s (KKR) Form 10-Q filing for the period ending June 29, 2017, reveals a strong performance driven by significant gains in its Private Markets segment. The company reported substantial growth in total segment revenues, primarily fueled by a notable increase in carried interest, which more than doubled compared to the prior year's period. This was largely attributable to strong appreciation across its private equity and credit portfolios. The company also saw an increase in management, monitoring, and transaction fees, reflecting the growing Assets Under Management (AUM) and successful capital raising efforts, particularly for its flagship funds like Americas Fund XII and Asian Fund III. The Public Markets segment also contributed positively, showing increased AUM and improved performance income, partly due to the strategic combination of PAAMCO and Prisma Capital Partners. The Capital Markets segment experienced significant growth in transaction fees, driven by a higher volume and size of deals. Overall, KKR demonstrated robust operational and financial health, with positive momentum across its key business segments, supported by strategic capital deployment and favorable market conditions.

Key Highlights

• 1KKR reported a substantial increase in total segment revenues, primarily driven by a significant rise in carried interest income, reflecting strong portfolio appreciation.
• 2Assets Under Management (AUM) grew across both Private Markets ($85.0 billion) and Public Markets ($63.5 billion) segments, indicating successful capital raising and investment deployment.
• 3The Private Markets segment saw a significant increase in performance income, with unrealized carried interest growing substantially due to portfolio appreciation.
• 4Transaction fees within the Capital Markets segment more than doubled year-over-year, driven by an increase in both the number and size of capital markets transactions.
• 5The company's balance sheet investments (in Principal Activities segment) generated strong investment income, with net gains from investment activities increasing significantly compared to the prior year's period.
• 6KKR's management declared a quarterly distribution of $0.17 per common unit, underscoring its commitment to returning capital to shareholders.
• 7The company actively managed its capital through a unit repurchase program, with $291 million remaining capacity as of July 27, 2017.

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