(Bloomberg) -- KKR & Co. reported first-quarter profit that beat Wall Street estimates after the alternative asset manager changed how it relays financial results to emphasize recurring earnings over lumpier private equity asset sales.

Adjusted net income rose 20% to $863.7 million, or 97 cents a share, the company said Wednesday in a statement. That beat the 95-cent average estimate of analysts surveyed by Bloomberg.

KKR created a new reporting metric — total operating earnings — that includes fee-related earnings at its asset management unit, earnings from long-term private equity holdings and profit from its Global Atlantic insurance arm. This was the first quarter the firm had 100% ownership of the insurer.

“Asset management, plus insurance, plus strategic holdings, all working synergistically together to generate sustainable and significant P&L outcomes,” Chief Financial Officer Rob Lewin said on a call with analysts. “We have a lot of confidence in each of our three growth engines.”

Shares of New York-based KKR rose 3% at 11:03 a.m. in New York.

The firm reported $962.3 million in total operating earnings for the quarter, including $20.7 million from strategic holdings. 

Fee-related earnings rose 22% to $669 million in the quarter. A 33% gain in insurance operating earnings to $272.8 million was driven by higher yields and growth in the investment portfolio.

Assets under management rose 13% during the quarter, to $578 billion. KKR laid out a plan at its investor day earlier this month to reach at least $1 trillion of assets under management in five years. Taking a cue from Berkshire Hathaway Inc.’s business model, the firm recently created the strategic holdings unit to manage long-term private equity bets that generate dividends. 

Read More: KKR Aims To Reach $1 Trillion of Assets in Next Five Years

KKR, founded in 1976 by Henry Kravis, Jerome Kohlberg and George Roberts, has grown beyond its private equity roots into an alternative-asset management giant with strategies including buyouts, credit, infrastructure, real estate and insurance. The firm highlighted retirees and individuals as being key to its growth strategy to reach $1 trillion of assets.

In November, the firm agreed to acquire the remaining 37% of Global Atlantic that it didn’t already own for about $2.7 billion.

The firm raised about $4 billion of capital for private equity during the first quarter, driven primarily by its Ascendant fund, which invests in middle-market companies, and its private equity vehicle for wealthy individuals. Credit took in $21 billion during the quarter while real assets raised $6 billion.

Shares of KKR have returned about 12% this year, outperforming Blackstone Inc., slightly less than Apollo Global Management Inc. and roughly in line with Carlyle Group Inc.

Other first-quarter highlights:

  • Total investing earnings, which includes performance and investment income, fell 15% to $192.5 million
  • Realized carried interest rose 45% to $250.3 million.
  • Dry powder totaled $98 billion at quarter-end
  • Traditional private equity portfolio generated a gross return of 5%
  • Leveraged credit investments generated a gross return of 3%, while the alternative credit portfolio returned 4%

(Updates shares in fifth paragraph and with CFO comment in fourth.)

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