K.K.R.’s Earnings Rise 22% on Investment Gains

Improving markets lifted the fortunes of Kohlberg Kravis Roberts in the fourth quarter, as the investment firm reported a 22 percent rise in profit.

K.K.R. said on Thursday that it earned $347.7 million for the quarter, as all of its businesses showed strong gains. For the year, the firm reported earnings of $2.1 billion.

The fourth-quarter profit, reported as economic net income and including unrealized gains from investments, was 48 cents a share. That was more than double the 20-cents-a-share average of analyst estimates compiled by Capital IQ.

Private equity firms have benefited from stronger markets, which have bolstered the value of their own holdings. Last week, the Blackstone Group reported a 43 percent increase in fourth-quarter earnings.

K.K.R. said the value of its investments rose 4 percent for the quarter and 24 percent for the year. The strongest performers were Alliance Boots, a British pharmacy chain; HCA, the giant hospital operator that went public last year; and the Nielsen Company, the media measurement company.

The improved market conditions also make selling portfolio companies a more attractive prospect, letting firms harvest tangible returns from their investments.

That was reflected in K.K.R.’s results, which included a nearly fourfold increase in distributable earnings for the quarter, to $546.3 million. That metric tracks how much a firm actually pays to its limited partners.

And K.K.R.’s assets under management rose 13.9 percent from the third quarter, to $75.5 billion.

The firm’s co-founders and co-chairmen, Henry R. Kravis and George R. Roberts, said in a statement that the growth of their private equity portfolio outpaced the Standard & Poor’s 500-stock index by about 7 percent last year.