Private equity firm KKR’s earnings beat forecasts

Private equity firm KKR on Tuesday reported higher-than-expected earnings, benefiting from steadying oil prices and stronger US equity and credit markets.

New York-based KKR said it had earned economic net income of 23 cents a share in the second quarter, down from 88 cents a year earlier but well above analysts’ forecasts of 5 cents, according to Thomson Reuters I/B/E/S.

Economic net income is a key metric for US private equity firms that accounts for unrealised gains or losses in investments.

Underscoring the turnaround in financial markets, KKR’s performance income, which tracks gains from investments, stood at $328.6 million in the second quarter, reversing a loss of $124.9 million in the previous three months.

Healthier financial markets also boosted the performance of KKR’s private equity fund.

KKR reiterated that shareholders would receive a cash distribution of 16 cents a share.

KKR, which has $126 billion (€114.4 billion) of assets under management, bought Irish credit investment firm Avoca Capital three years ago. Last year, the firm joined forces with the Ireland Strategic Investment Fund to launch a €500 million fund to provide finance to residential property developers.

KKR’s co-chief executive Henry Kravis recently said at an event in Hong Kong that Ireland and Luxembourg were likely to be the main beneficiaries if about 20 per cent of London’s financial sector relocated elsewhere because of the need to passport products and services across Europe.

Blackstone Group , KKR’s rival and the world’s biggest alternative asset manager, also surprised analysts last week by posting stronger-than-expected quarterly results. – (Reuters)