KKR Reports Exceptional Third Quarter Results

KKR & Co. Inc. has reported a robust performance for the third quarter of 2024, showcasing a return to a more normalized operating environment.

Private equity giant KKR & Co. Inc. (NYSE:KKR) has reported a stellar performance for the third quarter of 2024, with Adjusted Net Income (ANI) growing by over 50% year-over-year. The company also achieved record Fee Related Earnings (FRE) and Total Operating Earnings (TOE).

Here's a summary of KKR's key financial results for Q3 2024:

> Total revenues reached $4.79 billion, up significantly from $3.32 billion in the same quarter last year, driven by substantial increases in both the Asset Management and Strategic Holdings segments, as well as the Insurance segment.

> GAAP Net Income attributable to common stockholders was $0.7 billion for the quarter, contributing to a year-to-date total of $2.0 billion.

> Record achievements were seen in FRE and TOE, with FRE hitting $1.0 billion, up 79% year-over-year, and TOE reaching $1.3 billion, up 71% from the previous year.

> Assets under management (AUM) grew to $624 billion, an 18% year-over-year increase, while Fee Paying AUM (FPAUM) rose to $506 billion, up 19%.

> KKR reported EPS of $1.38 on an adjusted basis, surpassing the anticipated EPS of $1.21.

KKR's performance this quarter exceeded market expectations, particularly in terms of revenue. Analysts had anticipated earnings per share (EPS) of $1.21 and revenue of $4.86 billion. However, the company delivered an EPS of $1.38 on an adjusted basis, while the reported revenue was $4.79 billion.

The Asset Management segment was a key driver of this outperformance, with segment earnings rising to $1.63 billion from $1.07 billion in the prior year. This growth was fueled by increased management fees and transaction and monitoring fees. Additionally, the Insurance segment's operating earnings rose to $307.5 million, benefiting from portfolio optimization and asset rotation.

KKR's ability to exceed expectations can be attributed to its strategic investments and growth in perpetual capital, which now represents 42% of AUM. The company's focus on generating fee-related earnings and expanding its asset management capabilities is also driving its growth momentum.

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KKR's Guidance:

KKR has provided optimistic guidance for its future performance, driven by its strong third-quarter results and strategic initiatives. Here are some highlights of the company's guidance:

> The company anticipates continued growth in its Fee Related Earnings and Total Operating Earnings, supported by a robust pipeline of investment opportunities and capital deployment.

> KKR's management expressed confidence in the firm's ability to sustain its growth momentum, highlighting plans to further expand its asset management capabilities and leverage its strategic holdings.

> The company expects its Strategic Holdings Operating Earnings to be modest in 2024 but projects significant growth, reaching $300 million by 2026 and $1 billion by 2030.

> The firm has declared a regular dividend of $0.175 per share for the quarter, reflecting its commitment to returning value to shareholders. KKR's board of directors will continue to evaluate future dividend policies based on the company's financial performance and strategic priorities.

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