Rising markets have proved good for Kohlberg Kravis Roberts and its holdings.
The private equity firm disclosed on Thursday that its third-quarter profit rose 23 percent from the same time last year, to $601.8 million, as it collected bigger fees from its investments.
The profit, reported as economic net income after taxes, amounted to 84 cents per unit. That far outstripped the average analyst estimate of 55 cents a unit, as compiled by Standard & Poor’s Capital IQ.
K.K.R.’s profit for the quarter using generally accepted accounting principles was $204.7 million, up nearly 61 percent from the year-ago period.
Private equity firms have benefited as improving markets have helped push up the value of their investments. Several of K.K.R.’s holdings, including the hospital operator HCA and the pharmacy operator Alliance Boots, rose well above their cost of investment in the quarter. Over all, the value of the firm’s portfolio rose nearly 6 percent for the quarter.
That helped bolster the firm’s fee-related earnings, which rose 17 percent to $106 million.
Unlike other buyout firms that have focused largely on selling off portfolio companies, K.K.R. also kept busy buying new companies. It completed the acquisitions of the industrial parts maker Gardner Denver and the clinical researcher PRA International, among other transactions.
The relative slowdown in sales helped contribute to lower distributable earnings, which track payouts to investors. The firm reported a 25 percent drop, to $251.1 million, though it will pay unitholders a dividend of 23 cents.
But while it is best known for leveraged buyouts, K.K.R. has steadily expanded into new businesses in part to help bolster assets under management, which now stands at $90.2 billion. During the quarter, the firm announced that it planned to buy Avoca Capital, an investor in European debt.
