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Profits at US private capital giant KKR soared in the second quarter, bolstered by the 50-year-old group’s single biggest quarter of asset sales on record.
KKR’s results underscore the rapid growth many private capital groups continue to enjoy in defiance of the wider dislocations in the $22tn industry caused by fears of rising credit defaults and falling private equity returns.
The New York-based investment group has demonstrated an ability to buck some of the negative trends in private markets, where firms have been struggling to sell assets and return cash to increasingly impatient investors.
KKR was able to cash in billions of dollars in investments at large gains in the second quarter, generating a record $848mn in realised performance profits, more than double this time last year.
Its windfalls included the sale of its remaining holdings in Japanese conglomerate Kokusai Electric at a twentyfold gain and Hyundai Marine Solutions, which locked in a gain of 7.5 times its cost.
Other successful private equity bets spanned US software group OneStream Software and German space company OHB, which relisted its shares earlier this year.
The asset sales helped to fuel a sharp rise in KKR’s fee-based earnings and operational cash flows, mirroring strong results posted by Blackstone earlier this month.
Fee-based earnings increased 37 per cent year on year in the second quarter, while KKR’s adjusted net income — a metric favoured by analysts as a proxy for cash flows — rose 40 per cent from this time last year. Both figures were significantly better than expected.
KKR’s ability to record large gains on its recent private equity funds in the US and Asia helped it raise $34bn in new assets during the quarter, taking its total to nearly $800bn.
The group held fund closes for an Asian private equity fund and the first fund managed by Arctos, a sports private equity investment pioneer that also is a specialist in financing other private capital groups.
Investors also poured money into KKR’s private equity and infrastructure funds targeting individual investors.
Still, KKR and its rivals continue to face challenges in some of their credit-oriented funds, especially those targeting retail investors.
KKR raised just $9bn in new credit assets as its returns dipped and fundraising among wealthy individuals slowed — a decrease of about 40 per cent from the second quarter of 2025.
KKR earlier this year partially limited redemptions at its asset-based retail credit fund. More recently, redemption rates at its K-FIT retail credit fund have dropped to a manageable 1.6 per cent of net assets, allowing KKR to meet withdrawal requests in full.
