* Assets under management $98 billion at June-end
* Post-tax Q2 ENI per unit of 62 cents vs Street view of 65
* Second-quarter dividend of 67 per unit
(Adds analyst comment, share reaction)
By Greg Roumeliotis
NEW YORK, July 24 Private equity firm KKR & Co
LP said on Thursday that its second-quarter earnings
more than tripled year-on-year, close to most analysts'
expectations, as a string of lucrative asset sales led to its
highest dividend on record.
Like its alternative asset manager peers, KKR has taken
advantage of the rally in equity and debt markets to sell some
of its companies at high valuations. In April, it also acquired
a specialty finance company it previously managed after agreeing
to pay out that company's income as dividends.
KKR said post-tax economic net income (ENI) per adjusted
unit was 62 cents in the second quarter, up from 18 cents a year
ago but lower than the 65 cents average forecast by analysts in
a Thomson Reuters poll.
"The miss (in expectations) was primarily driven by lower
investment income," Sandler O'Neill & Partners LP analyst
Michael Kim wrote in a research note, referring to income that
KKR generates by investing its own money rather than that of its
KKR shares were trading down 1.9 percent at $24.84 in early
afternoon trading at $24.82 against a flat stock market.
KKR's dividend was 67 cents per unit, up from 42 cents a
year ago. About a third of that came from its $5.8 billion sale
of South Korea's Oriental Brewery Co Ltd to Anheuser-Busch InBev
NV, the world's biggest brewer.
In the second quarter, KKR also completed its 2 billion euro
($2.7 billion) sale of helicopter transport services firm
Avincis to Babcock International Group Plc, a British
defense support and engineering services company.
The New York-based investment firm also sold shares in
hospital operator HCA Holdings Inc and chipmaker NXP
Semiconductors NV through secondary stock market
Overall, KKR's private equity portfolio appreciated 5
percent in the quarter. That is less than the 8.4 percent rise
in the value of Blackstone Group LP's private equity
portfolio but in line with a 5 percent appreciation in Carlyle
Group LP's private equity portfolio.
KKR was also buoyed by its acquisition of KKR Financial
Holdings LLC (KFN), an investor in bonds and loans that it
previously received fees to manage. The deal, which closed on
April 30, means that KKR now receives all the investment profits
on more than $2 billion of assets it used to manage for KFN.
The acquisition of KFN also boosted the book value of KKR's
balance sheet to $10.4 billion at the end of June from $7.8
billion from the end of December.
KKR also said assets under management totaled $98 billion as
of the end of June, down from $102.3 billion at the end of
March, due to the assets sales and the end of managing KFN's
(Reporting by Greg Roumeliotis in New York; Editing by Cynthia