NEW YORK (Reuters) – Private equity firm Kohlberg Kravis Roberts & Co (KKR.AS) reported a sharp increase in first-quarter earnings on Thursday as fee income and the value of its investments rose.
KKR is one of the biggest private equity firms in the world with investments in companies such as retailer Dollar General Corp (DG.N), hospital operator HCA and media company Nielsen.
Currently traded on Euronext, it is in the process of moving to the New York Stock Exchange. It said earlier this week it will sell $500 million of new units after it becomes a publicly traded U.S. company.
Economic net income, a measure used by private equity firms to report earnings, was $674.8 million for the quarter, compared with a pro-forma figure of $2.5 million a year ago, KKR said.
Rival private equity firm Blackstone Group LP (BX.N) reported in April economic net income of $360 million for the first quarter compared with a loss of $82 million a year earlier.
Blackstone said at the time the value of its private equity portfolio rose 16 percent in the first quarter and its real estate portfolio rose 12 percent.
Private equity firms revalue their portfolios each quarter and thus can have volatile earnings. The valuations are partly based on how publicly traded portfolio company peers are faring and by how much the market has moved.
KKR gave details of the valuations of selected investments. It is holding its investment in hospital company HCA Inc at nearly double its cost and market research firm Nielsen at 130 percent of cost. Nielsen is being prepared for initial public offerings, a source previously told Reuters and HCA recently filed for an IPO.
Fee-related earnings were $90.4 million compared with $39.7 million the same quarter a year ago, KKR said.
KKR said the amount it committed, or invested, during the quarter totaled $1.1 billion and it has $14.2 billion available to invest.
It is paying a first-quarter distribution of 8 cents a share, the same as the previous quarter.
KKR is scheduled to hold a call on Friday for analysts where it will give more detail about the results. (Reporting by Megan Davies; editing by Steve Orlofsky and Andre Grenon)