| NEW YORK
NEW YORK Feb 6 KKR & Co LP on Thursday
reported fourth-quarter profit that soared by 127 percent,
beating most analysts' expectations, as the value of its private
equity portfolio rose and it earned more fees from its credit
KKR said that its private equity assets appreciated 8.4
percent in the quarter, buoyed by a stock market rally that also
drove the value of peer Blackstone Group LP's private
equity portfolio up by 11.5 percent.
Economic net income (ENI), KKR's headline earnings metric
that takes into account the mark-to-market valuation of its
assets, was $789.6 million in the fourth quarter of 2013, up
from $347.7 million in the fourth quarter of 2012, the New
York-based firm said.
This translated into after-tax ENI of $1.08 per adjusted
share versus the average 89 cents forecast by analysts in a
Thomson Reuters poll. KKR's principal investments, which
originate from its balance sheet, contributed almost as much to
this result as its private equity funds.
Huge by industry standards, the size of KKR's balance sheet
is the legacy of the firm's merger in 2009 with KKR Private
Equity Investors, a fund vehicle whose listing KKR transferred
to New York from Amsterdam in 2010.
That balance sheet is expected to grow further with KKR's
$2.6 billion acquisition of the assets of its specialty finance
company KKR Financial Holdings LLC, which it hopes to
complete in the first half of 2014.
KKR's fourth-quarter total distributable earnings, which
show actual cash available to pay dividends, dropped 6.6 percent
to $510.4 million, in contrast with a 46 percent rise in
distributable earnings reported by Blackstone last week.
That discrepancy is attributed more to the comparison with
the fourth quarter of 2012, which was exceptionally strong for
KKR in terms of asset sales, rather than a choice by the private
equity firm not to take advantage of red-hot capital markets to
exit investments to the same extent as its peers.
KKR's asset sales in the fourth quarter of 2013 included
secondary offerings of shares in hospital operator HCA Holdings
Inc, discount retailer Dollar General Corp and
television ratings company Nielsen Holdings NV, as well
as the initial public offering of French flooring maker Tarkett
Assets under management totaled $94.3 billion as of the end
of December, up from $90.2 billion as of the end of September.
KKR disclosed it had completed fundraising for its flagship
North American Fund XI, amassing $9 billion.
KKR announced a fourth-quarter dividend of 48 cents per
share, bringing total distributions for the year to $1.40 per
share, its highest since it went public.
KKR, which was founded in 1976 by Henry Kravis, George
Roberts and Jerome Kohlberg, declared a new payout policy in
April 2013 and promised to distribute 40 percent of its balance
sheet income as a dividend every quarter.