By Isla Binnie and Niket Nishant NEW YORK (Reuters) -Investment giant KKR reported a 9% rise in adjusted net income for the second quarter on Thursday, bolstered by an increase in fee-related earnings. The New York-based firm said its adjusted net income hit $1.1 billion, or $1.18 per adjusted share. This came in ahead of […]
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KKR’s second-quarter profit rises on growth in fee income
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By Isla Binnie and Niket Nishant
NEW YORK (Reuters) -Investment giant KKR reported a 9% rise in adjusted net income for the second quarter on Thursday, bolstered by an increase in fee-related earnings.
The New York-based firm said its adjusted net income hit $1.1 billion, or $1.18 per adjusted share. This came in ahead of an LSEG SmartEstimate of $1.13 per share.
Fee-related earnings rose 17% to $887 million, spurred by growth in management fees and its capital markets business.
Market volatility was high in the quarter, stemming from U.S. President Donald Trump’s pledges to impose tariffs on trading partners around the world. Fee-related income, however, can provide money managers with stable earnings when markets are turbulent. Large firms like KKR also benefit from having diversified portfolios.
KKR’s assets under management now total $686 billion, a 14% annual increase. It raised $28 billion in new capital, less than the $30.5 billion it had hauled in during the first quarter.
The traditional private equity model of buying and selling companies has faced headwinds as higher interest rates and the trade war made some sales less profitable.
Still, many investors have expressed optimism in recent weeks, and the world’s biggest alternative asset manager Blackstone said it expects a revival in deals and initial public offerings.
“We remain highly constructive as we enter the second half of the year,” KKR co-CEOs Joseph Bae and Scott Nuttall said.
Shares of the company were marginally up before the open.
“This was a good quarter from KKR in our opinion,” Piper Sandler analysts wrote in a note.
Recent announcements from KKR include the acquisition of HealthCare Royalty Partners, which buys rights to the royalties flowing from pharmaceutical companies’ drug sales.
KKR also teamed up with Capital Group to seek SEC approval for a fund that blends public and private equity, looking to capitalize on rising demand from wealthy retail investors.
Separately, KKR said it had raised $6.5 billion to invest in asset-backed finance. It said this fund will focus on opportunities to buy debt similar to the deal it and PIMCO struck with motorcycle maker Harley Davidson.
(Reporting by Isla Binnie; Editing by Edwina Gibbs)