Private equity firm reports slowdown in asset sales

KKR & Co announced a 23% year-on-year decline in quarterly profits today. The firm’s report showed a dip in revenue as asset sales slow among private equity firms. Overall, post-tax distributable earnings fell from $494.7 million in Q3 2018 to $388.8 million in Q3 2019.

Companies like KKR has sold fewer firms this year despite all-time highs on the equity markets. Concerns about valuations have driven buyers to stand back from taking over firms. This trend helped fuel a dip in Blackstone profits last week.

The firm reported earnings of $241.2 million and $1,456.6 million, respectively, for the quarter and nine months ended September 30, 2019.

On a diluted basis, this came in at $0.43 and $2.63, respectively, for the quarter and the same nine months.

Revenues for the third quarter hit $790.5 million compared to $1,129.7 million for same quarter in 2018. Book value per adjusted share was $18.22 as of September 30, 2019. That figure is up 17%, compared with $15.57 as of December 31, 2018. The increase was primarily attributable to net appreciation in the value of our investment portfolio as well as after-tax distributable earnings, net of dividends. KKR’s private equity portfolio appreciated 20% year to date.

KKR & Co. authorizes stock buybacks

KKR & Co. has authorized a repurchase program. This plan could buy stock in the open market or reduce shares issuable to participants in its equity incentive plan. In total, KKR has used approximately $987 million to either repurchase shares or retire equity awards since the inception of KKR’s share repurchase plan on October 27, 2015 through October 28, 2019.

“Our results through the third quarter reflect continued strong operating performance evidenced by the 17% increase year-to-date in our book value per share,” said Henry R. Kravis and George R. Roberts, Co-Chairmen and Co-Chief Executive Officers of KKR. “Given our investment history and the strength of our client franchise, we anticipate further growth as we begin to raise capital for a number of our benchmark strategies in the coming months.”

Related: KKR & Co Cuts IPO Price for Latitude Financial