(Bloomberg) — KKR & Co. Inc., CrowdStrike Holdings, Inc. and GoDaddy Inc. will join the S&P 500 as part of the latest quarterly weighting change.
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The companies will be Robert Half Inc., Comerica Inc. and Illumina Inc. replaced, according to a press release from S&P Dow Jones Indices on Friday. The changes will come into effect before the open of trading on Monday 24 June.
The inclusion of New York-based KKR underlines the tremendous growth of the private investment sector in recent years. Founded in 1976 by Henry Kravis, Jerome Kohlberg and George Roberts, KKR recently laid out a plan to reach at least $1 trillion in assets under management in five years, in part by courting retirees and individuals. The firm is known for its private equity activities and has expanded into strategies from buyouts and credits to infrastructure, real estate and insurance.
Shares of KKR rose 6.5% in after-hours trading.
Meanwhile, the additions of CrowdStrike and GoDaddy come as stock investors flock to software companies in an effort to capitalize on the growth of cloud computing and artificial intelligence.
Shares of cybersecurity company CrowdStrike rose 9% in after-hours trading. The stock has more than doubled in the past year and is now the second-best performing index in the tech-rich Nasdaq 100 Index, surpassed only by Nvidia Corp.
On Tuesday, CrowdStrike delivered first-quarter profits that beat Wall Street expectations despite a spending slump that tested cybersecurity rivals.
Shares of web platform company GoDaddy are up about 30% at Friday’s close. Shares rose 4% in after-hours trading on Friday.
To qualify for the S&P 500, companies must be highly liquid U.S. companies with a market capitalization of at least $18 billion and meet profitability, liquidity and stock float standards. Under May’s methodology, the thresholds for the S&P MidCap 400 Index and the S&P SmallCap 600 Index are $6.7 billion to $18.0 billion and $1.0 billion to $6.7 billion, respectively.
Inclusion in the benchmark is becoming increasingly important for companies in a world increasingly dominated by passive investment funds. Additionally, a spot in the coveted S&P 500 strengthens a company’s investor profile and increases trading liquidity – factors that can potentially increase its stock price.
Exclusion from the benchmark could weigh on stock prices as passive investors are forced to sell stocks and adjust to the new composition of the S&P 500.
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