KKR's assets up 3.2% in quarter, but revenue, net income decline

KKR & Co. reported $153.3 billion in assets under management as of Sept. 30, up 3.2% from June 30 and up 17% from a year earlier, said the alternative investment firm's earnings report released Thursday.

KKR said the increase was driven by new capital raised and an increase in value of its private equity and credit businesses. These increases were partially offset by private equity fund distributions to limited partners and distributions made by its public markets business, KKR added. The firm closed on two strategic investor partnerships in the quarter that brought in $7 billion in total commitments, a portion of which was included in the firm's second quarter AUM.

KKR's private markets business AUM totaled $87.6 billion as of Sept. 30, up 3.1% from the previous quarter and up 16.5% year-over-year. AUM for KKR's public markets business was $65.7 billion as of Sept. 30, up 3.5% from June 30 and up 17.5% from a year earlier.

Management fees for the third quarter were $233 million, up 1.5% from the second quarter and up 15.6% from the year-over-year quarter. Monitoring fees were $14.3 million, down 53.1% from the previous quarter but up 28.8% from the third quarter of 2016. Transaction fees were $179.2 million, up 14.5% from June 30 and up 60.9% from Sept. 30, 2016.

KKR raised about $27.5 billion in the year ended Sept. 30. Net gains from investment activities totaled $108.8 million, down 74% from the second quarter and down 85.2% from the year-over-year quarter.

GAAP net income was $153.6 million in the quarter, compared to net income of $405.6 million in the second quarter and $352.2 million in the third quarter of 2016. Total revenues made up of fees and other were $692.9 million, compared to $931.8 million in the previous quarter and $687.1 million in the year-over-year quarter.