KKR & Co.'s assets under management rose to $90.2 billion as of Sept. 30, an 8% increase from $83.5 billion at the end of the second quarter, the firm reported Thursday.
Committed capital yet to be invested, known as dry powder, was $22.7 billion as of Sept. 30.
Economic net income after taxes increased to $601.8 million, up 23.5% a year earlier. KKR's measure of ENI excludes some expenses tied to a combination with the firm's public fund that allowed KKR to list its shares on the New York Stock Exchange in 2010. Under GAAP, KKR reported net income of $204.7 million, up 60.7% from a year earlier.
KKR's private markets business invested $1.8 billion in the third quarter, the highest quarterly amount in two years. That helped drive a 72% increase in transaction fees to $129 million from the year-earlier period.
The firm said the value of its private equity portfolio rose 5.9% in the third quarter, compared with a gain of 6.1% in the same period last year. Unrealized carried interest rose 14% from a year earlier to $278 million. Realized carry, which represents cash earned by selling holdings, fell 51% to $81.5 million as KKR sold fewer assets.
“Realization activity seemed to slow from the second quarter's exceptional pace,” Wells Fargo analysts led by Christopher Harris said in an Oct. 10 note to clients. “However, assuming strong equity markets and friendly capital markets, we think a healthy pace of harvesting activity will continue.”
Third-quarter profit rose 23% as gains in its buyout portfolio fueled paper profits and KKR collected more fees for completing deals.
The company on Oct. 18 said it will acquire Avoca Capital, a European credit investor with $8 billion in assets under management, as a strategic purchase. Also, KKR last month agreed to buy insurance technology provider Mitchell International from Aurora Capital Group for $1.1 billion, including debt.
