KKR Reports Lower than Expected Q3 Loss

Private equity giant Kohlberg Kravis Roberts & Co. (NYSE: KKR) today reported lower than anticipated loss in its third quarter, primarily due to strong fee-related performance.

KKR posted a loss in its third quarter due to writedowns of investments. However, a 41% year-over-year increase in fee-related income allowed KKR to post smaller than expected loss in the third quarter.

Although KKR primarily focuses on private equity investments, the company also has a capital market division that is engaged in arranging debt and equity financing for deals and underwriting securities offerings. The firm’s capital market division benefited from more and larger transaction closings, which led to higher transaction fee income.

For the third quarter of 2011, KKR posted a loss of $592.1 million, compared with a gain of $317.3 million reported for the same period in the previous year. The company’s net loss for the third quarter of 2011 was $243.4 million, compared with a profit of $8.9 million reported for the same period in the previous year.

The company’s assets under management stood at $58.7 billion at the end of the third quarter, down from $61.9 billion at the end of second quarter.

Henry R. Kravis and George R. Roberts, Co-Chairman and Co-CEOs of Kohlberg Kravis Roberts, said that for the nine months to September 30, KKR’s private equity investments outperformed the S&P 500 by over 1,000 basis points despite the recent market volatility. Kravis and Roberts also said that KKR has capitalized on attractive opportunities in all of its segments, leading to investments or commitments of nearly $3.5 billion since June 30 and a record quarter in the company’s capital market business. They added that KKR’s ability to take advantage of volatile market environments stems from the long-dated capital entrusted to the company by a growing base of limited partners across a diverse set of strategies.

KKR shares finished the unchanged at $13.52.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.