KKR earnings soar in Q2, AUM rises to $98B

Alternative asset manager Kohlberg Kravis Roberts & Co. LP (KKR) reported strong growth in earnings for the second quarter but failed to keep up with street expectations.

The asset management giant’s key metrics of economic net income (ENI) rose to $501.6 million for the quarter ended June 30, 2014, from $144.4 million in the year-ago period. ENI per share after taxes was $0.62, up from $0.18 in the same quarter last year.

GAAP net income was $178.2 million rising from $15.1 million while total distributable earning was $701 million, up from $403.8 million in Q2 2013.

Fee and yield earnings were $154.2 million and $317 million for the quarter and six months ended June 30, 2014, respectively, up from $101 million and $188.5 million in the comparable periods of 2013.

Its assets under management (AUM) and fee paying assets under management (FPAUM) totaled $98 billion and $79.7 billion as of June 30, 2014, respectively.

 “Our realization activity in the second quarter drove the highest cash carry and total distributable earnings we've reported since going public, contributing to a quarterly distribution of $0.67. Additionally, our cash flow generation, investment performance, and balance sheet income resulted in a 29 per cent return on equity and 22 per cent cash return on equity over the last twelve months,” Henry R Kravis and George R Roberts, co-chairmen and co-chief executive officers of KKR, said in a joint statement.

As of June 30, 2014, KKR had $3.4 billion of cash and short-term investments and $2.5 billion of outstanding debt obligations on a total reportable segment basis. Its portion of total uncalled commitments to its investment funds or dry powder was $976.9 million.

Last week, Blackstone came up with strong earnings growth, marking its best ever Q2 performance.

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