KKR Reports Q3 Profit

NEW YORK (Reuters) – Private equity giant Kohlberg Kravis Roberts & Co (KKR.AS) reported a third-quarter profit on Thursday and said it is seeing improving debt markets and opportunities to invest.

KKR closed a long-awaited deal in October to buy its Amsterdam-quoted fund, becoming a Euronext-listed company and completing the first step toward an expected move to the New York Stock Exchange.

Its third-quarter earnings — the first as a public company — give separate figures for KKR and the unit it combined with, KKR Private Equity Investors.

The figures will be combined in subsequent quarters.

KKR’s economic net income was $656.6 million for the quarter ended Sept. 30, compared with a loss of $465.6 million for the same period the previous year.

That figure excludes adjustments as a result of the combination, which would have decreased the $656.6 million number by about $300 million, the firm said.

The unit formerly know as KKR Private Equity Investor’s net asset value per unit was $16.98, compared with $14.66 three months previously.

“We are seeing interesting situations to invest capital all over the world, across various industries, and throughout the capital structure,” co-chairmen and co-chief executives Henry Kravis and George Roberts said in a statement.

KKR said private equity dollars invested during the past quarter totaled $1.1 billion. That includes buying the South Korean subsidiary of Oriental Brewery from Anheuser-Busch InBev (ABI.BR), and investing in a Chinese financial leasing firm.

It has $14.2 billion of capital to invest from across its funds.

Assets under management increased to $54.8 billion, up 8 percent from the end of June.

The firm also gave updated figures for how KKR Private Equity Investors values its portfolio in KKR investments. A $201 million investment in hospital operator HCA was marked about $100 million higher compared with the previous quarter, at $342.5 million.

Investments in Alliance Boots and Biomet were also marked higher, although both remain below cost.

New York-based KKR had been planning for two years to follow rival Blackstone Group LP (BX.N) in becoming a publicly traded company, but was held up by market turmoil.

The deal to become a publicly traded entity involved combining with KKR Private Equity Investors, a Guernsey limited partnership traded on Euronext and known as KPE.

A move to a New York listing, which would put KKR on the same playing field as Blackstone, will likely come next spring, a source familiar with the situation previously told Reuters.

KKR originally announced plans to list on the NYSE via a traditional initial public offering in July 2007, a month after Blackstone went public and just before the markets started to tumble.

KKR later proposed the more complex method of going public and in June it formally withdrew the traditional IPO plan but kept the door open for a NYSE move in the future.

Shares of the company have fallen 6 percent since the combination on Oct. 1. They were down 20 cents at $8.80 in Amsterdam on Thursday. (Reporting by Megan Davies; Editing by Andre Grenon, Phil Berlowitz, Gary Hill)