KKR earnings slip 23% as weaker deal activity hurts revenue

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KKR earnings slip 23% as weaker deal activity hurts revenue

NY-based multinational private equity firm KKR & Co. Inc., engaged in energy, infrastructure, credit, real estate and equity, with $148.5 billion worth of assets under its management, had reported a 23 per cent drop in its Q3, 2019, revenue on a year-on-year basis on Tuesday, the 29th of October 2019, as an en masse slowdown in asset sales by buyout firms led to a downward spiral of its fee revenue.

According to the NY-based private equity firm’s Tuesday’s (October 29th) statement, excluding taxation, KKR’s available cash to pay dividends fell to $388.8 million in Q3, 2019, 23 per cent down from $496.7 million a year earlier as beforementioned.

Nonetheless, despite a steep slowdown in asset sales, KKR’s posted a 46 cents after-tax distributable earnings per share, beating an average estimate of 42 cents per share, Refinitiv data revealed. In point of fact, many private equity firms including Blackstone Group Inc.

and KKR, had sold fewer-than-anticipated companies this year despite a US Stock market harbouring near all-time highs, as potential buyers remained at bay amid global slowdown risks alongside concerns of an over-valuation, which had eventually weighed on earnings’ private equity firms likes of Blackstone and KKR used to generate through lucrative fees associated such kind of transactions.

Besides, Blackstone, the world’s largest private equity firm, with $545 billion worth of asset under its management, had also posted a decline of 8 per cent in its distributable earnings’ during Q3, 2019. Nonetheless, despite a sharp plunge of as much as 4.29 per cent during pre-market trading following reveal of KKR & Co.’s earnings, the KKR shares had managed to shrug off earlier losses and wrapped up Tuesday’s market 0.21 per cent lower to $28.64 per share.