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(Reuters) – KKR & Co (NYSE:KKR) Inc said on Tuesday its after-tax distributable earnings more than doubled in the fourth quarter, thanks to strong asset sales from its private equity portfolio and record transaction fees from its capital markets business.
KKR’s strong earnings performance, in line with that of its peers, reflects a record-breaking dealmaking year in 2021 that was driven by buoyant markets, access to cheap capital, and the economic rebound from the COVID-19 pandemic.
Blackstone (NYSE:BX) Inc and Carlyle Group (NASDAQ:CG) Inc both reported record fourth-quarter earnings, as the buyout firms took advantage of the favorable environment to sell assets for top dollar.
KKR said its after-distributable earnings, which represent the cash used to pay dividends to shareholders, rose to a record $1.4 billion compared with $544.1 million a year earlier. That translated to after-tax distributable earnings per share of $1.59, exceeding the average Wall Street analyst estimate of $1.21 per share, according to financial data provider Refinitiv.
During the quarter, KKR generated $568.3 million as it booked profits from asset divestments, including the sale of its controlling interest in Max Healthcare, an Indian hospital chain operator, and a minority stake in Japan’s Kokusai Electric. Transaction fees from its capital markets unit rose to $320 million, up 66% from $193 million a year earlier, driven mostly by infrastructure and private equity deals in North America.
KKR said it invested $23 billion to buy assets in the fourth quarter, including the acquisition of Norwegian ship-owning company Ocean Yield and a stake in South Korean energy company SK E&S Co Ltd.
KKR said its private equity portfolio rose 7% in the quarter and its opportunistic real estate funds rose 4%. Blackstone and Carlyle reported appreciation in their private equity funds of 4.8% and 6%, respectively.
KKR’s assets under management rose 2.6% during the quarter to $471 billion, driven by strong fundraising, while unspent capital was flat at $112 billion.
