(Reuters) — KKR & Co LP said on Thursday that its second-quarter earnings rose 67 percent year-on-year, reaching a quarterly record that far exceeded most analysts’ expectations, as its private equity funds appreciated far more than the wider market.
KKR’s strong performance is due to the rise in value of a few large portfolio companies, such as payment processor First Data Corp, which this week filed for an initial public offering, and hospital operator HCA Holdings Inc.
The results are in contrast to those of peer Blackstone Group LP, which last week reported a 62 percent slump in second-quarter earnings, as weak global stock markets weighed on the value of its portfolio.
KKR said its private equity portfolio appreciated 7.4 percent in the second quarter, compared with a 5 percent appreciation in the second quarter of 2014. Blackstone’s private equity funds appreciated 3.5 percent in the second quarter of 2015.
KKR said economic net income (ENI) was $839.9 million in the second quarter, up from $501.6 million a year ago. This translated into post-tax ENI per adjusted unit of 88 cents, higher than the 61 cents average forecast by analysts in a Thomson Reuters poll.
In the second quarter, the New York-based firm completed a $14 billion deal to sell orthopedic products maker Biomet Inc to Zimmer Holdings Inc, and sold shares in TV ratings company Nielsen NV and retailer Pets at Home Group Plc .
Overall, assets sales generated less cash than they did a year ago and so total distributable earnings, which shows cash available to pay dividends, was $491.4 million in the second quarter, down from $701 million a year ago.
As a result, KKR disclosed a second-quarter distribution of 42 cents per common unit.
KKR, which was founded in 1976 by Henry Kravis, George Roberts and Jerome Kohlberg, said assets under management totaled $101.6 billion as of the end of June.