Key Takeaways
KKR & Co. (NYSE: KKR) reported first-quarter adjusted earnings of $1.39 per share, beating Wall Street estimates, but saw its shares fall after signaling a more cautious outlook for the remainder of the year.
"The fact is, perception of the volatility of our business and industry is disconnected from the lived experience," Scott Nuttall, KKR’s co-chief executive officer, said on a call with analysts, downplaying recent market turmoil.
The private equity giant's results for the quarter ended March 31 showed total segment revenues of $1.47 billion, which topped the consensus estimate of $1.43 billion. The firm's fee-related earnings rose 23.5 percent year-over-year to $1 billion, and its assets under management (AUM) grew 14.1 percent to $757.9 billion.
Despite the quarterly beat, shares of KKR fell 1.9 percent in trading. The company moderated its full-year guidance, noting that while it entered the year with a path to achieving $7+ per share in adjusted net income, the challenging operating environment made it "more likely that we land below that level."
A significant bright spot in the quarter was KKR's ability to attract new capital. The firm raised $28 billion in new funds, highlighted by the final closing of its North America Fund XIV at $23 billion, the largest private-equity fundraise in KKR's history. This fundraising success occurred across various strategies, with the private wealth channel contributing $4 billion in new capital.
"We were candidly surprised by the strength of flows in Q1," said Chief Financial Officer Robert Lewin, noting that inflows into its credit strategies more than doubled from the previous quarter.
While KKR's monetization activity was strong, generating around $880 million in revenue during the quarter, executives acknowledged that market volatility could delay some future asset sales. Any deals pushed from 2026 would be expected to shift into 2027.
In response to what it views as a discounted stock price, KKR has been actively repurchasing its own shares, buying back $317 million worth of stock through May 1. The board also authorized a $500 million increase to its share repurchase program. The company raised its annualized dividend by 5.4 percent to $0.78 per share.
The strong quarterly performance and robust fundraising demonstrate the underlying health of KKR's diversified business. However, the moderated guidance suggests that even top-tier asset managers are not immune to the broader economic uncertainties. Investors will be closely watching the firm's ability to navigate the challenging monetization environment in the upcoming quarters.
This article is for informational purposes only and does not constitute investment advice.
