Updated version 1 – KKR achieves record-high profits as asset sales and management fees surge

Added share price information and chart in the first paragraph

Reuters, November 9 - KKR (KKR.N) reported record quarterly profits on Monday, with the investment giant maintaining a robust pace of asset sales and reaping higher management fees from handling client funds, driving its shares up 3% in pre-market trading.

Despite a slowdown in industry-wide asset sales due to rising interest rates, the New York-based firm has accelerated its investment exits this year and returned even more capital to investors.

“We continue to monetize investments and return capital to clients at record levels,” co-CEOs Joseph Bae and Scott Nuttall said in a statement.

KKR expects to return more than $40 billion to its clients this year, over 50% higher than its previous annual record.

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The asset manager completed a series of deals in the third quarter, including the sale of data center cooling company CoolIT Systems (link) and private aviation infrastructure platform Atlantic Aviation.

According to data compiled by LSEG, adjusted net profit jumped 29% to $1.6 billion, or $1.78 per share, topping analyst expectations of $1.59 per share.

KKR is on track for a strong finish to the year, with the $17 billion sale of USI Insurance Services (link) to Aon AON.N expected to close in the fourth quarter and contribute about $2 billion to adjusted profit.

Assets under management surpass $800 billion milestone

During the three months ended September 30, KKR raised $25 billion in new funds, bringing its assets under management past $800 billion. Inflows were primarily driven by its credit and liquid strategies as well as its real assets platform.

Known as a pioneer in buyouts, the company has expanded beyond private equity into areas such as credit and real assets. KKR aims to grow its assets under management past $1 trillion by 2030.

Driven by growth in management fees and performance-related income, fee-related earnings jumped 27% to $1.3 billion.

The total return for the infrastructure portfolio was 4%, while traditional private equity investment returns were flat. Total return for leveraged credit and alternative credit was 1% and 3%, respectively.

From June 30 to November 4, KKR repurchased $567 million worth of shares, and last week increased its share buyback authorization by $500 million.

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