KKR profits slump by nearly half after oil rout shrinks valuations

 
Michael Bow
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CHAOS in energy markets has sparked a steep decline in private equity giant KKR’s quarterly profits, figures showed yesterday.

The buyout firm, based in New York, said fourth quarter income fell 89 per cent, causing a 6.5 per cent tumble in its share price.

A slump in the oil price has hit firms like KKR, which own energy-related companies, forcing it to shrink the estimated valuation of its assets. KKR said the value of its portfolio companies, which includes oil and gas firms like Samson Resources, Cinco Resources and Raptor Petroleum, still rose 2.7 per cent during the quarter but was much lower than the 8.4 per cent rise in the prior year.

The 89 per cent fall in economic net income – which includes the value of unsold investments – saw income fall to $86.6m for the three months ending December from $789.6m.

KKR retained its dividend of 35 cents a share.