The first-quarter profits of investment giant KKR have risen on the back of fee growth

KKR announced a near 20% increase in its first-quarter profits on Thursday. This was boosted by the higher transaction and management fees that it received from its portfolio.

The results show the structural advantage of large alternative asset managers who can generate hundreds and millions in management fees, even when asset sales remain muted.

The uncertainty in the market caused by President Donald Trump’s tariffs is causing executives to worry about a potential slowdown of mergers and purchases.

While a slowdown of dealmaking can limit the number of exits, investment firms may be able to acquire valuable assets for a discount during this time.

"Volatility is a great investment opportunity, and our global footprint encourages us," said co-CEOs Scott Nuttall and Joseph Bae, who added that KKR had $116 billion in available funds.

Global investment giant's net income adjusted for inflation was $1.03billion, or $1.15 a share, in the three-month period ended March 31. This compares to $863.7m, or 97c per share a year earlier.

The fee-related earnings increased by 23%, to $822.6 millions. These fees are a source of stability in times of market turmoil, like the current period of anxiety caused by Trump's tariffs.

The assets under management increased by 15%, to $664 billion. This was aided by the $31 billion in new capital raised.

The company also targets retail investors. Earlier this month, KKR Capital Group and KKR launched two funds that had low fees and minimal investment thresholds to give retail investors exposure to a mix of public and private credits.

Blackstone, KKR's competitor, reported a higher-than expected profit for its first quarter. This was due to the strength of Blackstone's private equity and credit business.

KKR shares are down 23% compared to a 5% decline in the S&P 500 Index. Blackstone, Apollo Global, and Carlyle, rivals, have fallen by 23,6%, 17,4%, and 23.5% respectively. (Reporting and editing by Arun K. Koyyur in Bengalur; reporting by Niket Nishant)

(source: Reuters)