KKR & Co. Inc., CrowdStrike Holdings, Inc. and GoDaddy Inc. will join the S&P 500 in its latest quarterly weighting change.
The companies will replace Robert Half Inc., Comerica Inc. and Illumina Inc., according to a press release from S&P Dow Jones Indices on Friday. The changes will take effect before trading opens on Monday, June 24.
The inclusion of New York-based KKR underscores the massive growth of the private equity business in recent years. KKR, founded in 1976 by Henry Kravis, Jerome Kohlberg and George Roberts, recently laid out a plan to increase assets under management by at least $1 trillion over five years, in part by attracting retirees and individuals. Known for its private equity investments, the firm has expanded its activities from buyouts and lending to infrastructure, real estate and insurance.
KKR shares rose 6.5% in after-hours trading.
Meanwhile, the additions of CrowdStrike and GoDaddy come as stock investors flock to software companies in an attempt to capture the rise of cloud computing and artificial intelligence.
Shares of cybersecurity company CrowdStrike rose 9% in after-hours trading. The stock has more than doubled over the past year to become the second-best performer in the tech-heavy Nasdaq 100 index, behind only Nvidia Corp.
Tuesday CrowdStrike delivered First-quarter earnings beat Wall Street expectations despite cost cuts that have challenged cybersecurity rivals.
Shares of web platform developer GoDaddy rose about 30% at Friday’s close. Shares were up 4% in after-hours trading Friday.
To qualify for membership in the S&P 500 Index, companies must be highly liquid U.S. firms with a market capitalization of at least $18 billion and meet standards for profitability, liquidity and shares outstanding. As of May methodologyThe threshold values of the S&P MidCap 400 and S&P SmallCap 600 indexes range from $6.7 to $18.0 billion and from $1.0 to $6.7 billion, respectively.
Inclusion in a benchmark rating is becoming increasingly important for companies in a world increasingly dominated by passive investment funds. In addition, a place in the coveted S&P 500 Index enhances a company’s investment profile and increases trading liquidity – factors that could potentially drive its stock price higher.
The exclusion from the benchmark index could put pressure on stock prices as passive investors are forced to sell shares and adjust to the new composition of the S&P 500.