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MONEY MANAGEMENT

KKR’s assets drop 1% in quarter, but up 8% over the year

KKR & Co's reported assets under management of $129.6 billion as of Dec. 31, a 1% dip from the end of the third quarter but an 8% increase from $119.5 billion on Dec. 31, 2015, according to the alternative investment firm's latest earnings report released Thursday.

Some $4.4 billion in distributions were made in the fourth quarter to limited partners of KKR's private equity funds and $2.7 billion to KKR's public markets investors. That was offset in part by new capital raised by the firm's private equity and credit businesses of a combined $1.8 billion, as well as $2.7 billion raised by its public markets business. There were also decreases in the fees earned by funds entering their post their investment periods, with the most significant being the $8.7 billion KKR North America Fund XI that closed in 2013.

KKR's private markets business AUM was $73.8 billion as of Dec. 31, down 2% from three months earlier but up 12% year-over-year. KKR's public markets AUM was $55.7 billion, flat from Sept. 30 but up 4% from Dec. 31, 2015.

GAAP net income was $179.3 million for the quarter and $287.1 million for the year ended Dec. 31, compared to $32.3 million for the quarter ended Dec. 31, 2015 and $488.5 million for all of 2015.

Total revenues including fees were $481.5 million for the quarter and $1.9 billion for the year ended Dec. 31, compared to $307.9 million for the quarter and $1 billion for the year ended Dec. 31, 2015.

Management fees were $198.1 million in the fourth quarter, down 2% from the third quarter but up 2% from the fourth quarter of 2015. Monitoring fees were $12.2 million in the fourth quarter, an increase from $11.1 million in the third quarter but a decrease from $94.1 million in the fourth quarter of 2015. Transaction fees were $68.3 million in the quarter, compared to $111.4 million in the third quarter and $107.3 million in the fourth quarter of 2015.

KKR earned realized carried interest of $503.2 million and incentive fees of $23.4 million in the fourth quarter, compared to carried interest of $350.5 million and incentive fees of $3.7 million in the third quarter. KKR had realized carried interest of $207.2 million and incentive fees of $7.2 million in the fourth quarter of 2015. Carried interest is performance fees earned on KKR's closed-end funds. Incentive fees are mainly from KKR's open-end funds, hedge fund stakes, managed accounts and collateralized loan obligations.