KKR 1Q net up, but firm's holdings grow slower

KKR 1st-qtr profit increases, but value of private equity firm's investments grows more slowly

Associated Press

NEW YORK (AP) -- KKR & Co. LP, one of the country's largest private equity firms, said Thursday that its first-quarter profit increased nearly 2 percent, although the value of its investments grew more slowly than they had a year ago.

The company's net income rose to $193.4 million, or 69 cents per share, for the three months ended March 31, up from $190.4 million, or 80 cents per share.

The value of the company's private equity investments rose 5.9 percent, slower than the 9 percent growth in the first three months of 2012.

That led to a drop in an adjusted profit measure that the industry uses, called economic net income. KKR's ENI fell 8 percent, to $627.6 million, or 88 cents per share. Analysts polled by FactSet expected 79 cents per share.

ENI excludes certain charges stemming from the company's 2010 IPO and other items.

KKR's private equity business raises money from large investors such as pension funds and uses that money, as well as debt, to buy companies. It aims to profit by selling them later in an initial public offering of stock, or to other companies.

A rising stock market tends to make the company's assets more valuable and helps them lock in profits by selling off its holdings in IPOs.

KKR's assets under management rose 26 percent to $78.3 billion as the value of its holdings increased and it raised more money from investors. The New York firm collected more fees for managing those investments.

Shares rose $1.21, or 6 percent, to $21.40 in morning trading. The stock has risen 46 percent over the past 12 months, as the company's business benefits from a long-running rebound in broader stock markets.

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