KKR income falls by less than anticipated in the second quarter

August 7, 2023 7:57 AM EDT -- KKR (NYSE: KKR) has posted a decline in earnings in the second quarter, but still beat forecasts, as the alternative asset manager was boosted by a surge in fee-related income that partially offset a fall in asset sales.

New York-based KKR reported $653 million in after-tax distributable earnings, widely seen as a proxy for cash flows, during the three months until the end of June, a drop of 23% compared to the corresponding period last year.

The figure translated to $0.73 per adjusted share, topping Bloomberg consensus estimates of $0.71.

Shares in KKR moved higher in premarket U.S. trading Monday.

Undergirding the returns was a 31% year-on-year jump in fee-related income to $602.3M, which was also above projections of $558.9M.

KKR took in $13 billion in new capital during the quarter, thanks to a "diverse set" of leveraged credit and private credit strategies. Assets under management grew by 6% on an annual basis to $519B.

However, net profit from asset divestments slumped by almost 80% to $146.2M, reflecting the impact of an era of higher interest rates and inflation that have weighed on dealmaking activity. Rivals Blackstone (NYSE: BX) and Carlyle (NASDAQ: CG) both saw asset sales slip as well during the latest quarter.

“We delivered solid financial results in the second quarter against a market environment that remained challenging," said co-chief executive officers Joseph Bae and Scott Nuttall in a statement.

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