Asia private equity strategy boosts KKR’s Q3 earnings, AUM

Photo: REUTERS/Beawiharta

Private equity giant KKR & Co’s strong PE presence in Asia boosted its performance in the third quarter of this year, with after-tax distributable earnings up 6 per cent year-on-year and assets under management reaching $233.8 billion during the said period.

In its quarterly report, the firm disclosed that the increase in its AUM was primarily attributable to new capital raised in its Asia PE, real asset, and private credit strategies, as well as the appreciation in the value of its private markets and public markets portfolios.

Asia comprises 30 per cent of KKR’s total PE portfolio.

Its flagship private funds – Americas Fund XII ($13.9 billion), Asian Fund III ($9.3 billion), and Europe Fund IV ($4.1 billion – delivered a gross return of 16 per cent in Q3 and 27 per cent for the last 12 months.

KKR has so far raised approximately $13 billion for KKR Asia Fund IV, which is already a record figure and the largest pan-Asia private equity fund in the world. The amount is already more than the $12.5-billion reported target for the fund.

KKR’s third Asia fund, which closed at $9.3 billion in 2017, is still actively deploying capital and has delivered a net IRR of 24 per cent.

The firm said the value of its PE portfolio appreciated by 16 per cent during the quarter, while real estate and infrastructure funds rose 6 per cent and 10 per cent, respectively.

In the earnings call on Friday, KKR’s investor relations head Craig Larson said the buyout major’s large Asia exposure “should help” the business as most Asian markets have not seen a spike in COVID-19 infections that have been witnessed in the US and Europe.

In the September quarter, the firm’s after-tax distributable earnings rose to $410.4 million, up from $388.8 million a year earlier. Net income was $1.1 billion, compared to $241.2 million during the same period last year.

Revenues also reached $1.9 billion compared to $790.5 million for the quarter ended September 30, 2019. The increase, KKR said, is primarily driven by a higher level of carried interest and an increase in transaction fees and management fees.

“KKR’s integrated business model delivered strong operating and financial performance in the third quarter and year-to-date… we have confidence in our firm’s fundamentals and our opportunities for continued growth,” said Henry R. Kravis and George R. Roberts, co-chairmen and co-CEOs of KKR.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.