KKR's assets rise on strong fundraising despite drop in valuations

KKR & Co. on Tuesday reported $491 billion in assets under management as of June 30, up 2.4% from the end of the prior quarter and a 14.4% increase year-over-year.

KKR attributed the growth to continued fundraising momentum. KKR raised $25 billion in the second quarter and $99 billion in the 12-month period ended June 30. The firm invested $19 billion in the quarter and $88 billion over the year. KKR reported a record $115 billion in dry powder.

However, KKR's fee-related earnings tumbled during the period to $461 million, down 24% from $605 million in the first quarter and down 2% from the year-earlier quarter. Earnings tied to fee revenue dropped despite management fees rising 44% to $2.4 billion in the 12 months ended June 30. KKR explained that the drop was the result of interest rates rising, which negatively impacted Global Atlantic, an insurance company business majority owned by KKR.

Returns also faltered during the period with its traditional private equity portfolio reporting a gross return of -7% for the quarter but a positive 4% for the year ended June 30. It's leveraged credit portfolio's gross return was -6% for the quarter and -5% for the year ended June 30. Alternative credit's return was -1% for the quarter but was up 6% for the same 12-month period. Infrastructure also took a hit with a gross return of -1%, but had a gross return of 8% for the year ended June 30.

Opportunistic real estate was the only portfolio with a positive gross return for the second quarter of 1%, and was up 23% for the year ended June 30.

KKR reported a GAAP net loss of $827.9 million for the quarter, compared with GAAP net income of $1.3 billion in the second quarter of 2021.