KKR Posts Record Quarter as Exit Wave Lifts Profit 29%

KKR closed its third quarter with adjusted net income of $1.6 billion, up 29% year over year, or $1.78 per share. That beat the $1.59 analysts had penciled in, per LSEG data. The New York firm credited a stretch of investment exits and higher fees for managing client money.

Co-CEOs Joseph Bae and Scott Nuttall said in a statement that KKR keeps monetizing investments and handing capital back to clients at record levels. The firm now expects to return more than $40 billion to clients this year, more than 50% above its previous annual high, even as higher interest rates have chilled dealmaking across the industry.

The quarter's exits included data center cooling company CoolIT Systems and private aviation infrastructure platform Atlantic Aviation. Next up: the $17 billion sale of USI Insurance Services to Aon, which KKR expects to close in the fourth quarter and add roughly $2 billion to adjusted profit.

New money kept pouring in. KKR raised $25 billion during the three months ended Sept. 30, lifting assets under management above $800 billion, driven mainly by credit, liquid strategies and real assets. Fee-related earnings climbed 27% to $1.3 billion. The firm, once known purely as a buyout shop, is chasing $1 trillion in assets by 2030.

Performance was mixed across the book. The infrastructure portfolio returned a gross 4%, traditional private equity came in flat, and leveraged and alternative credit composites returned 1% and 3% respectively. KKR also bought back $567 million of its own shares between June 30 and Nov. 4, and last week added $500 million to its buyback authorization.