Oct. 23, 2014, 8:37 AM
- Economic net income of $508.7M vs. $613.7M one year ago. ENI after taxes per unit of $0.50 vs. $0.80.
- Distributable earnings of $504.8M vs. $251.1M a year ago thanks to fast pace of realizations. Distribution per unit of $0.45 vs. $0.23.
- Private Markets AUM of $59.2B. Segment revenues of $631.6M vs. $788.5M a year ago. ENI of $399M vs. $531.8M. Lower investment income and a lower level of appreciation (up 2.2% for the Q) in the portfolio drove the declines.
- Public Markets AUM of $37B. Segment revenues of $93.6M vs. $83.5M a year ago thanks to higher management fees reflecting new capital raised. ENI of $48.1M vs. $37.6M.
- Capital Market revenues of $93.4M vs. $58M a year ago thanks to a greater level of deals. ENI of $61.6M vs. $44.4M.
- ROE of 24.7% during quarter.
- Conference call at 10 ET
- Previously: KKR beats by $0.06, beats on revenue
- KKR +3% premarket
Oct. 23, 2014, 8:10 AM
Oct. 22, 2014, 5:30 PM
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Oct. 19, 2014, 10:08 AM
- Remember last summer's private-equity legal settlements which ensnared sector names like Carlyle Group (NASDAQ:CG), Blackstone (NYSE:BX), KKR, and the P-E arm of Goldman Sachs (NYSE:GS) for colluding to keep a lid on the prices of buyout targets? Needless to say, management didn't bear the burden of the settlement penalties, but neither did the shareholders. In the case of Carlyle at least, the $115M fine was shouldered by the investors in one of its buyout funds.
- Those investors include state and city workers and retirees from across the country, and chances are they were unaware they were responsible for these costs due to the highly secretive nature of the agreements made between P-E and the pension funds which invest in them.
- Disclosure "would cause substantial competitive harm," says a Carlyle spokesman. “This is an overreach on Carlyle’s part, and frankly it violates the spirit of the indemnification clause of our contract,” says NYC Comptroller Scott Stringer, who oversees three city pension funds invested in that particular Carlyle vehicle.
- Private-equity firms now manage $3.5T in assets, and pension funds have been among the more willing investors, with 10% of their assets - or $260B - in P-E. Yet the terms of their deals - including what they're paying to take part - are hidden from view despite open-records laws demanding just the opposite.
- “Hundreds of billions of public pension dollars have essentially been moved into secrecy accounts,” says former SEC lawyer Edward Siedle. "It’s very damning legal boilerplate that sums up the fact that they are the highest-risk, highest-fee products ever devised by Wall Street.”
- ETFs: PSP, PEX
Oct. 6, 2014, 3:24 PM
- The P-E giant acquires a minority stake in Lemonade Restaurant Group, a cafeteria-style restaurant chain describing itself as a "Southern California smorgasbord."
- The company currently operates 14 West Coast locations and two in the Middle East, and will use KKR's investment to begin a significant expansion. There are currently seven stores under development in SoCal, one on the East Coast, and 28 in the Middle East.
- Interestingly, KKR's investment is with its own money, not from one of its buyout funds.
- Previously: Private-equity firms reportedly considering deals outside client funds
Sep. 29, 2014, 4:22 PM
- "We believe KKR has a proven track record in new fundraising and realizing attractive returns on investments in its diverse private funds," says S&P Capital IQ's Ken Leon, upgrading the stock to a Strong Buy from Hold. Though forecasting just low-single digit revenue growth, Leon sees funds available for new investments and cash returns to shareholders thanks to increased asset sales.
- His $26 price target is 9.9x estimated 2015 EPS of $2.62 - inline with peers and the upper end of KKR's historic range.
Sep. 29, 2014, 3:31 AM
- Australia's Treasury Wine Estates (OTCPK:TSRYY) has ended talks with private equity bidders for the sale of its business.
- "It is now apparent to the company that the bidders are not able to support a transaction on terms and at a price acceptable to the Board," says Treasury.
- The last takeover approach was made by TPG Capital in early August for $3.1B, and matched a bid from KKR (NYSE:KKR) and Rhone Capital.
Sep. 16, 2014, 12:37 PM
- Alternative asset managers aren't "one trick ponies," says Citigroup's William Katz, arguing the industry is far more diverse now than in the past and deal dynamics are way more sophisticated. He notes the companies have put less capital to work compared to past cycles and this should help "protect" IRRs.
- The overall group, he says, "screen quite inexpensively," and Blackstone (BX +0.6%), KKR (KKR), and Och-Ziff (OZM) remain his favorite names. The recent declines in Apollo Global (APO -1.1%) and Carlyle Group (CG +0.8%) make those two players enticing as well.
- The role call YTD isn't a pretty one, with only Blackstone in the green (barely), KKR down 7%, and the others lower by double digits.
Sep. 16, 2014, 8:30 AM
- KKR agrees to the purchase of Pioneer's DJ equipment business for $551M, with Pioneer retaining a 14.95% in the company. "Our business selling DJ equipment would have required large amounts of investment to continue to grow, and we can't afford to invest in it while also seeking to grow our in-car electronics operations," says Pioneer President Susumu Kotani. The business is a popular one, with global market share of 60% and a profit margin of 20%.
- In other news, the P-E firm does more business in India, agreeing to provide $164.2M in structured long-term financing to infrastructure development company GMR Infrastructure.
Sep. 9, 2014, 6:57 AM
- PRA Health Sciences, a clinical research company mostly owned by KKR (NYSE:KKR), is planning to raise $375M in an IPO just filed with U.S. regulators.
- KKR agreed to buy PRA from Genstar Capital for an undisclosed amount in June 2013.
- Jefferies, Citigroup, KKR and UBS are among the underwriters of the offering.
Sep. 8, 2014, 3:36 AM
- Carlyle Group (NASDAQ:CG) has closed its fourth Asia fund at $3.9B, taking the firm's total amount of assets managed by its Asia funds, including Japan, to $13.6B.
- PE firms have raised record amounts in recent years for Asia-focused funds, with TPG closing a $3.3B fund in May and KKR (NYSE:KKR) raising a $6B fund last year.
Sep. 3, 2014, 4:07 AM
- German internet service provider United Internet (OTC:UDIRY), has agreed to acquire full control of Versatel, a company which owns Germany's second-largest fiber optic cable network.
- United Internet, which announced it was considering the takeover last month, will now acquire the 74.9% of Versatel it didn’t already own from KKR (NYSE:KKR) for €586M ($769M) in cash.
Sep. 1, 2014, 2:42 AM
- Carlyle Group (NASDAQ:CG) is now the last to settle allegations against the world’s largest private equity groups, which previously accused the firms of conspiring to fix the prices of LBOs.
- Although Carlyle has now agreed to pay $115M, it still denies wrongdoing and does not regard the settlement as an admission of guilt.
- The decision follows similar settlements from the Blackstone Group (NYSE:BX), Goldman Sachs (NYSE:GS), KKR (NYSE:KKR), Bain Capital, Silver Lake Partners and TPG Capital, which were all accused of conspiring not to jump each others' deals.
Aug. 26, 2014, 8:35 AM
- KKR's $400M investment in Fujian Sunner Development comes amid another food safety scandal in the country (OSI Group), and repeated bird-flu outbreaks which have triggered sharp falls in sales.
- "Vertically integrated chicken farming is a key solution to the food safety threats facing China's animal protein sector," says KKR partner Julian Wolhardt.
- Pork is the most widely consumed meat in China, but chicken has been catching up thanks its lower cost. China is the world's biggest consumer of chickens, but the average Chinese person eats just 10 kg of chicken per year vs. 43 kg in the U.S. Chicken represents 17% of total Chinese meat consumption vs. nearly 40% in Hong Kong and Taiwan
- Press Release
Aug. 18, 2014, 6:36 AM
- KKR (NYSE:KKR) and Australian property manager Abacus Property Group have agreed to buy 70% of the World Trade Center in Melbourne for A$120.4M ($112.1M).
- The stakes in Towers 2, 3 and 4 of the World Trade Center will provide an initial yield of 9.3% a year, says Abacus.
- The deal will be KKR's first real estate investment in Australia, having previously focused on markets such as China, India and South Korea.
Aug. 15, 2014, 7:11 AM
- Both KKR and Apollo Global (NYSE:APO) are cut to Market Perform from Outperform, with analyst Chris Harris saying he sees risk as we approach the latter stages of the credit cycle. Both stocks had big runs from about the 2nd half of 2012 through the end of last year, but they've spent 2014 giving back some of those gains.
- Apollo is lower by 23% YTD while KKR is down about 5%.
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