Kohlberg Kravis Roberts ((KKR)) has held its Q4 earnings call. Read on for the main highlights of the call.
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KKR’s latest earnings call painted a picture of strong performance in 2024, marked by record earnings growth, significant capital raising, and expansion in private wealth and strategic holdings. While there are minor challenges in private equity performance and insurance earnings, the overall sentiment remains positive with a strong belief in continued growth and strategic initiatives.
Strong Year-End Financial Performance
The company reported a 24% increase in fee-related earnings per share, reaching $0.94, marking the second highest quarterly figure in its history. Adjusted net income per share saw a 32% rise to $1.32, highlighting a robust financial performance by the end of the year.
Record Annual Performance
KKR achieved record annual growth figures with a 37% increase in fee-related earnings per share and a 38% rise in adjusted net income per share. This marks a significant achievement for the company, setting new benchmarks for its financial success.
Robust Capital Raising
The firm successfully raised $27 billion in the fourth quarter, contributing to a total of $114 billion for the year 2024. This marks the second most active year in KKR’s history, showcasing a substantial increase from $70 billion in 2023.
Expansion in Private Wealth
KKR’s assets under management from individuals grew to approximately $100 billion. The K-Series vehicles saw significant growth, increasing from $7 billion to $18 billion year-over-year, indicating a strong expansion in their private wealth sector.
Strategic Holdings Growth
The company plans to increase stakes in three businesses by $2.1 billion, with $1.1 billion coming from KKR itself. This strategic move is expected to drive future earnings and management fees, further enhancing KKR’s growth prospects.
Flat Private Equity Performance
Despite a 14% appreciation for the year, the private equity portfolio remained flat in Q4. This indicates potential volatility or underperformance in the short term, which KKR will need to address moving forward.
Challenges with Insurance Operating Earnings
Insurance operating earnings are expected to remain flat as KKR shifts its strategy. This may impact short-term return on equity (ROE) and accounting profits and losses, presenting a challenge that the company must navigate carefully.
Forward-Looking Guidance
KKR’s leadership expressed confidence in its growth trajectory, with plans to increase the annual dividend from $0.70 to $0.74 per share starting in the first quarter of 2025. The strong financial performance, highlighted by record growth figures, underlines the company’s healthy position and strategic foresight.
In summary, KKR’s earnings call reflects a strong financial performance for 2024, with record-breaking growth and strategic expansion across various sectors. Despite some short-term challenges, the sentiment remains positive, with the company poised for continued success and growth in the coming years.
