Fees from managing money, which KKR earns regardless of how investments perform, jumped 25.5% to $1.25 billion. This helped pull overall adjusted net income up to $1.63 per share, comfortably beating a $1.41 estimate from an LSEG analyst poll.
Co-CEOs Joseph Bae and Scott Nuttall said the second quarter had been its strongest ever for turning investments into cash. "We remain confident in our long-term positioning," they said.
Shares were marginally higher in premarket trading. They have shed 22% of their value so far this year in line with other alternative asset managers.
Capital raising remains strong across businesses
Fresh capital of $34 billion was driven by the real assets business that houses KKR's infrastructure strategies.
Private equity brought in $9.56 billion, a whisker ahead of flows into credit, which remains the biggest chunk of its $796 billion under management.
KKR raised $9.1 billion for credit strategies in the quarter, a slump from $14.25 billion a year ago.
Net realized performance income, which reflects profits from asset divestments and is also known as carried interest, almost doubled from the previous year to $211.9 million.
Gross returns from private equity and credit funds improved. The traditional private equity portfolio returned 4%, while composites for leveraged credit and private credit showed returns of 2% and 1%, respectively, having been negative in the previous three months.
KKR beats estimates as fees and asset sales rise
KKR's second-quarter profit beat market expectations on Thursday, as it raked in higher fees from managing a growing stack of assets and cashed in on a bumper run of asset sales.
Many private equity firms have struggled in recent years, as interest rates rose, to maintain their traditional model of buying companies, extracting savings and selling them profitably.
But KKR, which made its name as a buyout pioneer and expanded into other areas including credit, closed a roster of transactions in the second quarter, including the final sale of Japanese chip company Kokusai Electric and its stake in software company OneStream.
Evercore analyst Glenn Schorr said the sales were "further evidence of the bifurcation in the sponsor market between large- and mid-cap, with bigger deals getting done more readily".
Recent deal activity includes EDF renewable business purchase
In June, KKR agreed to buy French power firm EDF's North American renewable business for $4.2 billion, aiming to capitalize on rising power demand driven by the expansion of data center for artificial intelligence and electrification of the economy.
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