On July 31, 2024, KKR & Co Inc (KKR, Financial) released its 8-K filing for the second quarter of 2024, showcasing a robust performance across its key financial metrics.
Company Overview
KKR is one of the world's largest alternative asset managers, with $577.6 billion in total managed assets, including $470.6 billion in fee-earning AUM, at the end of March 2023. The company operates through two core segments: asset management and insurance. The asset management segment includes private markets (private equity, credit, infrastructure, energy, and real estate) and public markets (primarily credit and hedge/investment fund platforms). The insurance segment includes Global Atlantic Financial Group, which is engaged in retirement/annuity and life insurance lines as well as reinsurance.
Performance Highlights
KKR reported a strong quarter with record Fee Related Earnings (FRE) and significant capital deployment. The company raised $32 billion of new capital in the quarter, bringing its Assets Under Management (AUM) to over $600 billion. Additionally, KKR deployed $23 billion in the quarter, up from $10 billion one year ago, and maintains a healthy deal pipeline for the second half of 2024 across its businesses and geographies.
"This was a strong quarter for KKR. We reported record Fee Related Earnings and are experiencing acceleration across our key operating metrics and financial results. Momentum across the firm remains high, and we remain confident in our team, our model, and our growth prospects." - Joseph Y. Bae and Scott C. Nuttall, Co-Chief Executive Officers
Financial Achievements
KKR's financial achievements for the second quarter of 2024 include:
| Metric | 2Q'23 | 2Q'24 | 2Q'23 YTD | 2Q'24 YTD |
|---|---|---|---|---|
| Total Revenues | $3,626,518 | $4,171,910 | $6,754,000 | $13,828,648 |
| Total Expenses | $3,122,482 | $3,946,329 | $5,982,565 | $13,259,273 |
| Net Income (Loss) - KKR Common Stockholders | $844,463 | $667,926 | $1,167,207 | $1,350,140 |
| Net Income (Loss) Attributable to KKR & Co. Inc. Per Share of Common Stock (Basic) | $0.98 | $0.75 | $1.36 | $1.52 |
Key Metrics and Analysis
KKR's key metrics for the second quarter of 2024 include:
- Fee Related Earnings (FRE) of $755 million ($0.84/adj. share), up 25% year-over-year.
- Total Operating Earnings (TOE) of $1.0 billion ($1.17/adj. share), up 36% year-over-year.
- Adjusted Net Income (ANI) of $972 million ($1.09/adj. share), up 49% year-over-year.
- Assets Under Management (AUM) of $601 billion, up 16% year-over-year.
- Fee Paying Assets Under Management (FPAUM) of $487 billion, up 16% year-over-year.
- New Capital Raised of $32 billion in the quarter and $108 billion in the LTM.
- Capital Invested of $23 billion in the quarter and $61 billion in the LTM.
Income Statement and Balance Sheet
KKR's income statement and balance sheet reflect its strong financial position. The company reported total revenues of $4.17 billion for the quarter, up from $3.63 billion in the same period last year. Total expenses increased to $3.95 billion from $3.12 billion. Net income attributable to KKR common stockholders was $667.93 million, down from $844.46 million in the same period last year.
Cash Flow and Investment Activity
KKR's cash flow and investment activity were robust, with significant capital deployment and new capital raised. The company raised $32 billion of new capital in the quarter, reflecting the second highest quarter in KKR's history. Capital invested in the quarter was $23 billion, up from $10 billion one year ago.
Conclusion
KKR's second quarter 2024 financial results demonstrate the company's strong performance and growth prospects. With record Fee Related Earnings, significant capital deployment, and a healthy deal pipeline, KKR is well-positioned for continued success in the asset management and insurance industries.
Explore the complete 8-K earnings release (here) from KKR & Co Inc for further details.
