KKR Profit Falls 74%

Jul 26 2013 | 11:27am ET

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.

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