Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Innovation Investing Conference
    • 2022 Defined Contribution East Conference
    • 2022 ESG Investing Conference
    • 2022 DC Investment Lineup Conference
    • 2022 Alternatives Investing Conference
Breadcrumb
  1. Home
  2. ALTERNATIVES
May 03, 2018 01:00 AM

KKR switching to a corporation from a partnership, following Ares lead

Firm also reports AUM increase of 4% for quarter, 28% for year

Arleen jacboius
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    KKR & Co. announced Thursday that effective July 1 it is switching to a corporation from a partnership, a move that could give the alternative investment firm a lower tax rate under the new federal tax bill and expand its investor base to include more retail investors, including from mutual funds, according to the firm's earnings report.

    KKR is the second public alternative investment firm after Ares Management to announce such a conversion.

    "The change has no impact on our funds or how we conduct our business," KKR spokeswoman Kristi Huller said in an email.

    David Fann, president and CEO of consulting firm TorreyCove Capital Partners, said in a separate email that the switch should have no impact on limited partners.

    One benefit, according to the KKR announcement, is an expansion of its shareholder base.

    "There has been a view that the stock price of publicly traded partnerships trade at a discount relative to corporations because certain shareholders (mostly, retail investors) don't want to deal with K1s (partnership tax reporting) which complicate income tax filings for individuals," Mr. Fann said.

    Mr. Fann thinks other public alternative investment firms could follow Ares and KKR's lead. During Apollo Global Management's earnings call Thursday, Joshua Harris, Apollo co-founder, said firm executives "continue to analyze" whether to switch to a corporation from a partnership, noting that there is no specific timetable.

    However, James Gelfer, senior analyst at research firm PitchBook, said the other firms are taking a "wait and see" approach.

    "The common hypothesis is by switching to a C-corp PE firms could become eligible for indices and therefore gain exposure to new investors by being included in retail products, potentially leading to higher valuations; however, this has yet to be proven," Mr. Gelfer said in a written statement.

    Also in its earnings report, KKR reported $176.3 billion in assets under management as of March 31, up 4% from Dec. 31, and up 28% from March 31, 2017. The increase was primarily driven by new capital raised, including $6 billion raised for its flagship infrastructure fund in the first quarter, and an increase in value in its private equity and credit strategies. These increases were partially offset by distributions to limited partners of its private equity funds and distributions to investors in its public markets business.

    KKR's private markets business AUM was $102.2 billion as of March 31, up 5% from three months earlier, and up 27% from a year earlier. KKR's AUM for its public markets business totaled $74.1 billion, up 5% from Dec. 31, and up 29% from March 31, 2017.

    Management fees for the first quarter were $251.6 million, up 7% from the fourth quarter and up 21% from $208.3 million for the first quarter of 2017. Monitoring fees were $17.5 million, down 24% from the previous quarter , and up 33% from the year-earlier quarter.

    GAAP net income was $170.1 million for the quarter, compared to $166.4 million in net income for the fourth quarter 2017 and $259.3 million net income for the first quarter of 2017.

    Total revenues, made up of fees and other revenues, were $394.4 million, compared to $941.6 million in the fourth quarter and $380.2 million in the year-earlier period.


    Compare fund flows and AUM of publicly traded money managers with P&I’s Earnings Tracker
    Related Articles
    KKR Capstone EMEA head departs
    Tax law to benefit money managers in several ways – Moody's
    Ares Management posts 5.7% AUM increase for quarter, 12.7% for year
    Apollo's AUM dips slightly in quarter, up 25% for the year
    KKR assets increase 8.5% in quarter, 29% for year
    Recommended for You
    Eimear Palmer
    Pantheon adds global head of ESG
    Franklin Templeton names head of sustainable agri-food
    ONLINE_180819917_AR_0_ZXNMFGHRAFDD.jpg
    Mitsui, Nomura to acquire Aussie real assets manager New Forests
    OCIO, Anchor in Rough Seas
    Sponsored Content: OCIO, Anchor in Rough Seas

    Reader Poll

    May 23, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Crossroads: Politics, Inflation, & Bonds
    Credit Indices: Closing the Fixed Income Evolutionary Gap
    Forever in Style: Benchmarking with the Morningstar® Broad Style Indexes℠
    Q2 2022 Credit Outlook: Carry On
    Leverage does not equal risk
    Is there a mid-cap gap in your DC plan?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    May 23, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Innovation Investing Conference
      • 2022 Defined Contribution East Conference
      • 2022 ESG Investing Conference
      • 2022 DC Investment Lineup Conference
      • 2022 Alternatives Investing Conference