Private equity firm KKR & Co (KKR) reported its second loss in quarterly earnings in less than a year on Monday as volatile financial markets dragged on the value of its investments.
The New York-based asset manager posted an economic net loss of $0.65 between January and March, after earning an economic net income of $0.62 a year ago. Analysts had expected an economic net loss of $0.35 in the quarter, according to Thomson Reuters I/B/E/S.
ENI is a key earnings metric for U.S. private equity firms that accounts for unrealized gains or losses in investments, also known as the mark-to-market value.
“The first quarter of 2016 was a challenging environment with pronounced volatility across global capital markets,” KKR said in a statement.
Known some eight years ago for multi-billion-dollar corporate takeovers, the U.S. private equity industry has been off to a slow and quiet start this year.
Dealmaking has moderated as the market for high-yield bonds and loans, the lifeblood of buyouts, struggles to recover after stumbling late last year when investors shunned risk.
In a sign of the times, KKR said its first-quarter loss was driven by unrealized losses in the falling share price of First Data Corp., a U.S. payment processor controlled by KKR.
KKR had taken First Data private for about $29 billion in 2007, before listing the company in a $2.6 billion initial public offering that was the largest in the United States in 2015.
In line with its policy of distributing a fixed dividend every quarter, KKR reiterated that shareholders would receive a cash distribution of 16 cents per share.
The last time KKR posted a loss was in the third quarter of 2015, when a stock market rout weighed on the value of its assets.