KKR & Co.’s fourth-quarter earnings declined as the value of its assets fell behind the broader market, but cash accessible to shareholders more than quadrupled to a new high.
In the fourth quarter of 2021, the private-equity company recorded a net income of $507.6 million, or 82 cents per share, compared to $1.48 billion, or $2.46 per share, the previous year.
KKR’s large balance-sheet investments, which include shares in Fiserv Inc. and PetVet Care Centers LLC, increased by less than they did the previous year, coming in flat with the September quarter.
Rather than being stored in KKR-managed funds, such investments are held at the firm level. The size of the firm’s balance sheet, as well as its strategy of owning big shares in firms, distinguishes it from its private-equity counterparts. While it allows shareholders to profit more directly from investment gains, it also exposes them to a greater risk of underperformance.
KKR’s private-equity portfolio increased in value by 6% during the quarter, while the S&P 500 increased by 11%. Distributable earnings, a carefully monitored gauge of cash that may be distributed to shareholders, hit a new high of $1.4 billion, or $1.59 per share. In the same quarter last year, the company earned $544.1 million, or 62 cents per share.
The growth occurred as a result of the firm selling off certain investments and continuing to develop into fee-generating industries. KKR announced that its normal yearly dividend would be increased from 58 cents to 62 cents per share.