KKR Swings to First-Quarter Loss
April 25 2016 - 8:30AM
Dow Jones News
KKR & Co. swung to a first-quarter loss amid what it called
a "challenging environment with pronounced volatility across global
capital markets."
The New York private-equity firm posted a loss of $329.9
million, or 73 cents a share, versus a year-earlier profit of
$270.5 million, or 57 cents a share.
KKR reported an economic net loss of $553 million, or 65 cents a
share, compared with a year-earlier economic profit of $525.9
million, or 62 cents a share. Analyst forecast an economic net
loss, which includes cash earnings as well as unrealized gains or
declines in the value of investments, of 35 cents a share,
according to a Thomson Reuters poll.
The loss largely stemmed from a 19% decline in the stock price
of heavily indebted payment processor First Data Corp., KKR's
largest private-equity holding. Over all during the quarter, the
firm's private-equity portfolio depreciated 0.9%.
Choppy stock and credit markets made for a tough start to the
year for buyout firms. Blackstone Group LP last week reported its
profit for the period fell more than analysts expected. Carlyle
Group and Apollo Global Management LLC are due to report in the
next two weeks.
Rough market conditions can play to private-equity firms' favor
when it comes to new investments. In January, KKR bought Mills
Fleet Farm and decided to syndicate debt to fund the acquisition
itself, rather than relying on a bank to arrange the financing.
Such firms continue to raise capital, suggesting pensions and
other investments remain confident about their long-term prospects.
KKR's assets under management rose to $126.4 billion as of March 31
from $107.6 billion a year earlier and $119.5 billion at the end of
2015.
KKR's stock closed Friday at $14.93, up 0.5% but down 4.2% so
far in 2016.
Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com
(END) Dow Jones Newswires
April 25, 2016 08:15 ET (12:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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