KKR Upgraded to Outperform at Credit Suisse

Wednesday, July 9, 2014, Credit Suisse Upgraded

to Outperform from Neutral, after analysts saw an acceleration in realized incentive fees, which in turn can drive upside to cash earnings. Credit Suisse analyst Dina Shin saw upside to both near-term and long-term as estimates would be driven by higher incentive fees. Shin then proceeded to raise cash estimates for the second-quarter 2014 and 2015 to $0.74, $2.67, $2.97, as well as increasing their 12-month target price to $33 from $29. Shin stated the reason for Upgrading now was due to consolidation of KFN in the second-quarter of 2014, thus allowing KKR to enhance their ability to generate investment income. Shin also commented on how KKR's private equity funds are at a more attractive point in the cycle, from an incentive/harvest standpoint than peers. Finally, Shin concluded how businesses are reaching an infection point, as four to five funds begin paying carry over in the next 18 months, and a majority of these funds are exceeding benchmarks, Shin estimates that fundraising for the second series will also be successful. KKR closed at 24.56 yesterday and was up 1.34 percent in pre-market trading to 24.89 as of 8:48AM EDT.