KKR Profit Surges On Asset Sales

Jul 25 2014 | 3:36pm ET

Like many private-equity firms, Kohlberg Kravis Roberts has been on a selling spree, and it has paid off.

The New York-based firm said that its quarterly profit rose three-and-a-half fold to $501.6 million, topping analysts’ estimates. Much of that gain was attributed to exiting two investments made during the financial crisis: hospital operator HCA Holdings and Anheuser-Busch InBev.

Distributable earnings rose 74% to $701 million, while assets under management dropped by $4 billion to $98 billion. Under generally accepted accounting principles, the firm’s profit was $178.2 million, 12 times the $15.1 billion it earned in the year-earlier period.

“Our realization activity in the second quarter drove the highest cash carry and total distributable earnings we’ve reported since going public” in 2010, co-CEOs Henry Kravis and George Roberts said.

KKR said the frothy market was likely to continue for some time, allowing it to sell other portfolio companies. “There’s plenty left to go,” executive Scott Nuttall told analysts.

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