Private equity firm KKR reports milder-than-expected 23% drop in Q2 earnings

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Private equity firm KKR & Co Inc said on Monday its second quarter after-tax distributable earnings fell 23% year-on-year as growth in management and transaction fees could not offset a slump in asset sales.

Fee-related earnings - which KKR generated largely from management and transaction fees - rose by nearly 31% to $602.3 million as the firm managed more assets and earned increased fees for syndicating the debt of mostly its own deals.

During the quarter, KKR said its private equity portfolio appreciated by 5%, leveraged credit funds rose 3%, while opportunistic real estate funds were flat. By contrast, the private equity funds of Blackstone, Carlyle and Apollo rose 3.5%, 1%, and 2.1%, respectively. KKR reported a net income under generally accepted accounting principles of $844.4 million, compared with a net loss of $734.6 million a year earlier, owing to a jump in investment income.

Total assets under management rose to $519 billion, up nearly 2% from the prior quarter, due to fundraising activity. Unspent capital stood at $100 billion.Chibuike OguhChibuike reports on mostly large U.S.-based private equity firms, including Blackstone, KKR, Carlyle, and Apollo. He previously worked at Bloomberg News, and holds master's degrees in journalism from New York University and Edinburgh Napier University.

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