Kohlberg Kravis Roberts' second-quarter earnings plummeted as returns on its private-equity investments slowed.
The New York-based firm said that its economic net income dropped 74% to $144.4 million. KKR blamed the mere 0.9% increase in the value of its p.e. portfolio for the slowdown, while trumpeting stronger metrics.
The firm said more than 80% of its p.e. assets have now cleared their performance hurdle, allowing it to take its share of the profits. Carried interest cash more than quadrupled year-on-year, to $161.9 million. KKR also pointed to its second-quarter distribution, which more than tripled due to its decision to hand out 40% of its balance-sheet income every quarter.
"Our realization activity in the second quarter drove the highest cash carry we have reported since going public, contributing to a quarterly distribution of 42 cents per unit," the firm said.