Kohlberg Kravis Roberts Posts Huge Quarterly Profit

Kohlberg Kravis Roberts (KKR) has posted a huge quarterly profit, thanks to cash distributions from several private equity investments, according to firm executives, who spoke during a conference call on Friday morning, discussing the company’s second-quarter profits.

The Wall Street Journal reports that KKR principal Scott Nuttall stated during the conference call:

“We feel pretty good about our 2006-2007 investments,” said KKR principal Scott Nuttall on the conference call. They helped to reinforce our message [to limited partners] that there is a lot of opportunity in big buyouts. Cash back is helping a lot in fundraising.”

One joint venture between KKR and El Paso Corp., Dollar General Corp., is one such investment. The value retail chain had a fourth secondary offering over the last nine months, and is currently valued at five times cost. He was sold to Kinder Morgan Inc., and doubled KKR’s capital.

Kohlberg Kravis Roberts co-founders and co-chief executives, Henry Kravis and George Roberts, said in a statement, according to Reuters, that:

“Against a challenging economic and capital markets backdrop, we are pleased with our results.”

One major driver for KKR’s gains was Walgreen Co’s investment in Alliance Boots GmbH, a pharmacy group. Walgreen Co, the largest U.S. drug store chain, stated in June that they will pay $6.7 billion for a 45 percent stake in Alliance, a KKR portfolio company.

While KKR has yet to book the money in the Walgreens deal, the announcement bolstered a huge markup in Alliance Boots for the company’s profile, with the company’s value jumping from $391.7 million in March to $650.6 million at the end of June.

Kohlberg Kravis Roberts stated that their second-quarter economic net income (ENI) rose to $546.1 million in the second quarter of 2012, up from $315 million last year, significantly exceeding analysts’ expectations.