KKR’s alternative credit portfolio returned 4pc in Q1
KKR’s alternative credit portfolio returned four per cent in the first quarter of this year, although this was beaten by its private equity and infrastructure arms which both yielded five per cent over the period.
The firm reported that its credit and liquid strategies business saw its assets under management (AUM) increase by six per cent quarter-on-quarter to $260bn (£208.2bn), with $21bn raised over the quarter.
The division’s AUM comprises of $130bn of leveraged credit, $54bn of asset-based finance, $39bn of direct lending, $9bn of strategic investments and $27bn of liquid strategies.
Read more: Moody’s downgrades three direct lending funds
It said that new capital raised over the quarter was driven by inflows at Global Atlantic, a life insurer it acquired, as well as asset-based finance vehicles, evergreen US direct lending, Asia private credit and CLO formation.
The credit and liquid strategies business invested $7bn in the quarter, with deployment most active in direct lending and asset-based finance.
KKR has expanded from its private equity roots into an alternative asset management giant in recent years, with strategies including real estate, infrastructure and credit.
Read more: Private credit is here to stay, says KKR
Overall, the company reported a 20 per cent increase in adjusted net income to $863.7m in the first quarter, beating analysts’ estimates.
“We had a solid quarter with 20 per cent+ year-over-year growth in fee related earnings, total operating earnings and adjusted net income and raised $31bn of new capital,” said Joseph Y. Bae and Scott C. Nuttall, co-chief executives of KKR.
“We closed on the acquisition of the remaining stake in Global Atlantic and are now reporting our financial results through three segments: asset management, insurance and strategic holdings. With three avenues for long-term, sustained growth – as detailed at our April investor day – we are well positioned for the years ahead.”
Read more: KKR touts CLO debt as hedge against high interest rates
Read more: KKR eyes “rare opportunity” in Asia’s private credit market