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KKR Earnings Plunge on Valuations

Private equity firm KKR & Co. reported a sharp decline in fourth-quarter earnings on Thursday as a drop in carried interest, driven by mark-to-market valuations of its assets, more than offset higher fee revenue that allowed for a record dividend for 2011, Reuters reported Thursday. Net carried interest — KKR’s share of the investment profits of its funds — declined to $54.1 million from $222.7 million. Fee-related earnings were $116.6 million, up from $95.1 million.

(Reuters) – Private equity firm KKR & Co LP reported a sharp decline in fourth-quarter earnings on Thursday as a drop in carried interest, driven by mark-to-market valuations of its assets, more than offset higher fee revenue that allowed for a record dividend for 2011.

KKR, whose investments include retailer Toys”R” Us Inc, Internet domain registration company Go Daddy Group Inc and hospital operator HCA Holdings Inc, reported lower economic net income, a measure of its profitability.

ENI fell to $285.5 million from $714.6 million a year earlier. After-tax ENI per adjusted unit was 33 cents, down from $1.02.

Net carried interest — KKR’s share of the investment profits of its funds — declined to $54.1 million from $222.7 million. Fee-related earnings were $116.6 million, up from $95.1 million.

A fourth-quarter distribution of 32 cents per common unit brought KKR’s 2011 dividend to 72 cents, an all-time high.

Assets under management were $59 billion at the end of 2011, $2 billion less than a year earlier. This does not include some $6 billion raised by KKR’s 11th North American private equity fund, which is currently on the fundraising trail.