Investment firm KKR KKR-N reported a rise in fourth-quarter income from fees it earns on managing new capital on Thursday, but booked lower fees earned from transactions, while a one-off charge weighed on a key profit metric.
KKR’s adjusted net income of US$1-billion for the quarter translated to US$1.12 per share.
KKR said in November it would take a charge in the fourth quarter for an underperforming fund in Asia. It had collected US$350-million of compensation linked to that fund which it said it would pay back.
Excluding the charge, KKR’s ANI per share would have been US$1.3. Total investing earnings, which includes gains from asset sales and performance income, dropped 78.8 per cent to US$84.8-million in the quarter.
Shares of the company, which lost nearly 14 per cent in 2025, fell 2.6 per cent in trading before the bell.
Worries in the market about risks to private credit, compounded by concerns AI will disrupt software investment, have weighed on the stocks of alternative asset managers such as KKR.
The New York-based group said it raised US$129-billion in new capital in 2025, more than in any other prior year, driven by inflows into its credit and insurance business, bringing its total assets under management to US$744-billion.
Private capital firms have been operating in a challenging fundraising environment since the Federal Reserve started raising interest rates in 2022. The lion’s share of new money is now flowing to larger groups like KKR rather than smaller or newer funds.
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The fee KKR earns on managing money for clients, regardless of investment performance, jumped 24 per cent in the quarter, to US$1.12-billion.
Its capital markets unit posted a 16.6-per-cent drop in transaction fees compared with the same quarter of 2024, to US$225.5-million. The unit charges fees to companies within its portfolio or owned by others for helping them with transactions like initial public offerings and debt financing.
Separately, KKR said on Thursday it will acquire Arctos, an institutional investor and asset management solutions provider, in a transaction valued initially at US$1.4-billion.
Late 2025 saw a resurgence in dealmaking, which boosted earnings for fellow alternative asset manager Blackstone.
During the quarter, KKR’s traditional private equity portfolio delivered returns at 4 per cent. Its infrastructure funds appreciated 2 per cent in valuation.