While some of its peers in the private equity industry struggled with the global market turmoil, Kohlberg Kravis Roberts sailed through its second quarter much more smoothly.
The investment firm said on Friday that its profit more than doubled in the quarter, to $520.3 million, as the value of its holdings - and one in particular, Alliance Boots - rose significantly. But the firm's fee-related earnings fell by $6.3 million, to $69.8 million.
K.K.R.'s profit amounts to 74 cents a share, handily outstripping the average analyst estimate of 16 cents, according to Standard & Poor's Capital IQ.
The firm's profit was reported as economic net income after taxes, which includes unrealized gains from investments and is a widely used measurement in the private equity industry. Using generally accepted accounting principles, it earned $146.3 million, more than triple the year-ago period.
Also on Friday, K.K.R. said that it had formed a joint venture with ano ther investment firm, Stone Point Capital, that will focus on offering capital markets services to midmarket and private-equity owned companies. The firm said that the new business would be separate from its existing capital markets business. K.K.R. and Stone Point are each committing $150 million of equity to the venture.
K.K.R.'s second-quarter results contrast sharply with those of a major rival, the Blackstone Group, which reported a 74 percent drop in profit for the quarter. And in general, private equity firms have been wounded by the sharp swings in the global markets, which have both hampered deal-making, hurt the value of their existing investments and made it difficult to sell companies they already own.
