Kohlberg Kravis Roberts' first-quarter earnings took a hit as its funds trailed the broader markets.
The New York-based private equity giant said that economic net income fell 10.9% in the first quarter to $647.7 million. Under generally-accepted accounting principles, KKR's profit actually rose by $3 million year-on-year to $193.4 million.
KKR's private-equity portfolio gained 5.9% on the quarter—better than most hedge funds, but a far cry from the more than 10% the Standard & Poor's 500 Index advanced by during the year's first three months. Assets under management rose almost 4% to $78.3 billion.
Fee-based earnings rose to $88 million from $73.4 million, and realized performance fees jumped to $52.9 million from $44.9 million.
The firm said it would pay a 27-cent dividend, part of its new policy of paying investors 40% of balance-sheet earnings each quarter. KKR's distributable earnings jumped 77% on the quarter to $290.6 million as the firm sold some portfolio companies.