What was the primary driver of revenue growth in the first nine months of 2017?

Revenue growth was primarily driven by a significant increase in 'Fees and Other,' which includes management, monitoring, and transaction fees. Transaction fees, in particular, saw substantial growth across all segments, especially in Capital Markets, indicating a higher volume of deal activity. Additionally, carried interest increased substantially due to improved portfolio appreciation in private equity and credit.

How did the PAAMCO Prisma transaction impact the Public Markets segment?

The combination of PAAMCO and Prisma Capital Partners created PAAMCO Prisma Holdings LLC. While KKR owns a 39.9% stake, the segment reporting reflects the allocation of PAAMCO Prisma's net income. This transaction led to a decrease in reported gross management fees and compensation expenses as these were previously reported on a gross basis and are now reflected on a net basis after the transaction. However, the overall AUM for the Public Markets segment increased.

What is the outlook for uncalled commitments?

As of September 30, 2017, KKR had significant uncalled capital commitments across its Private Markets ($39.4 billion) and Public Markets ($7.8 billion) segments. These commitments represent capital available to be deployed into future investments, with the Private Markets segment showing an increase driven by new capital raised in funds like Asian Fund III and Americas Fund XII.

How did compensation and benefits expenses change, and what was the impact of carried interest on this?

Compensation and benefits expenses increased year-over-year for the nine months ended September 30, 2017. This increase was primarily due to higher carry pool allocations, reflecting the improved performance of KKR's private equity and credit portfolios, and an increase in cash compensation and benefits. The overall increase in compensation was partially offset by a greater allocation of expenses to the Principal Activities segment.

KKR & Co. Inc. 10-Q Quarterly Report Q3 FY2017

Summary

KKR & Co. Inc. reported robust performance for the nine months ended September 30, 2017, with significant increases in revenues and net gains from investment activities compared to the same period in the prior year. The 'Fees and Other' category saw a substantial rise, driven by higher transaction and monitoring fees, although this was partially offset by increased fee credits. Carried interest also saw a notable increase, reflecting improved appreciation in the firm's private equity and credit portfolios. Despite higher compensation expenses, driven by increased carry pool allocations and cash compensation, the company's Economic Net Income (ENI) saw a significant uplift. The company's Assets Under Management (AUM) grew substantially across its Private Markets and Public Markets segments, signaling strong capital raising efforts. The Private Markets segment, in particular, experienced growth driven by new capital raised in key funds and a general increase in the value of its portfolio. The Public Markets segment also saw an increase in AUM, bolstered by new capital raised in strategic partnerships, CLOs, and other credit strategies, alongside positive value changes in certain assets. The Capital Markets segment showed strong growth in transaction fees, indicating increased activity in underwriting and syndication services.

Financial Highlights

26 data points

Beta

Revenue

$749.65M

Net Income

$161.90M

0.2% Net Margin

Total Assets

$44.31B

Cash & Equivalents

$3.81B

Free Cash Flow

-$544.69M

Financial Statements

Beta

Revenue	$749.65M
Interest Expense	$211.96M
Net Income	$161.90M

Key Highlights

1Total segment revenues for the nine months ended September 30, 2017, increased significantly to $3.06 billion, up from $1.20 billion in the prior year's comparable period.
2Driven by strong performance in Private Markets and Public Markets, carried interest increased by $621.5 million for the first nine months of 2017 compared to the prior year, reaching $1.22 billion.
3Transaction fees across all segments saw substantial growth, particularly in the Capital Markets segment, indicating increased deal activity.
4Assets Under Management (AUM) for the Private Markets segment grew to $87.6 billion as of September 30, 2017, up from $73.8 billion at the end of 2016, driven by new capital raises and portfolio appreciation.
5Public Markets AUM also increased to $65.7 billion from $55.7 billion at the end of 2016, primarily due to new capital raised and the PAAMCO Prisma transaction.
6The company's Net Income Attributable to KKR & Co. L.P. Common Unitholders for the nine months ended September 30, 2017, rose to $818.6 million, a significant increase from $116.1 million in the same period last year.
7KKR's distributable segment revenues increased to $2.22 billion for the nine months ended September 30, 2017, up from $2.06 billion in the prior year.

KKR & Co. Inc. Quarterly Report for Q3 Ended Sep 30, 2017

Summary

Financial Highlights

Key Highlights

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