Oaktree quarterly adjusted profit triples
(Reuters) - Private equity firm Oaktree Capital Group (OAK.N) reported a 187 percent rise in adjusted quarterly profit on higher incentive income as it earned more from its funds.
Bond yields at historically-low levels and a surging equities market have led investors to start shifting towards stock funds. This benefits money managers like Oaktree as fees on stock funds are higher than those on bonds funds.
Oaktree's results mirrored strong fourth-quarter gains reported by peers Blackstone Group LP (BX.N), Apollo Global Management LLC (APO.N) and KKR & Co LP (KKR.N).
Los Angeles-based Oaktree said incentive income — what investors pay managers when their funds reach a threshold — rose to $210.3 million from $32.1 million a year earlier. Investment income rose 20 percent to $52 million.
Adjusted net income rose to $220.4 million, or $1.36 per class A share, from $76.7 million, or 33 cents per share, a year earlier.
Analysts on average expected Oaktree to earn 92 cents per share, according to Thomson Reuters I/B/E/S.
Assets under the company's management as of December 31 grew to $77.1 billion from $74.9 billion.
Costs associated with compensation and benefits increased 3 percent to $82.1 million from a year ago.
"Compelling returns across our many asset classes drove revenues, distributable earnings and distributions to our clients and unit holders to their highest levels ever," said Chairman Howard Marks.
Oaktree raised about $380 million in its initial public offering in April after receiving a tepid response from investors wary of a sector that tended to disappoint once companies go public.
The company, which has a market capitalization of about $7.5 billion, was founded by Howard Marks and Bruce Karsh in 1995 with four partners from asset manager TCW Group Inc.
Oaktree shares, which have risen 8 percent this year, were up 0.5 percent at $50.15, after rising to a new year-high of $50.50 in early trading on the New York Stock Exchange.
(Reporting by Tanya Agrawal in Bangalore; Editing by Joyjeet Das)
(This story was corrected to fix the percentage figure in paragraph 1 to 187 from 186. Also corrects incentive income figure in paragraph 4 to $210.3 million from $178.2 million, and year-ago adjusted net income to $76.7 million from $77 million in paragraph 5)
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