KKR has profit; sees deals as financing improves

Private equity giant Kohlberg Kravis Roberts & Co 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 US$656.6m for the quarter ended September 30, compared with a loss of US$465.6m for the same period the previous year.

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

The unit formerly known as KKR Private Equity Investor’s net asset value per unit was US$16.98, compared with US$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 US$1.1bn. 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 US$14.2bn of capital to invest from across its funds.

Assets under management increased to US$54.bn, up 8% from the end of June.

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

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 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.