By Chibuike Oguh

NEW YORK Private equity firm KKR & Co Inc said on Monday its second quarter after-tax distributable earnings fell 23% year-on-year as growth in management and transaction fees could not offset a slump in asset sales.

After-tax distributable earnings fell to $652.6 million from $851.2 million a year earlier. That translated to after-tax distributable earnings per share of 73 cents, which was higher that the average Wall Street analyst estimate of 71 cents, according to Refinitiv data.

KKR said its net profit from asset disposals nosedived by nearly 80% to $146.2 million as higher interest rates, inflation and volatility continued to restrict mergers and acquisitions activity in the quarter.

KKR's peers Blackstone Inc and Carlyle Group Inc also reported a slump in asset sales that resulted in a drop in their second quarter distributable earnings. Apollo Global Management Inc, on the other hand, saw its adjusted net income soar by 75%, driven mostly by earnings from its annuities business, although its asset divestments were flat.

Fee-related earnings - which KKR generated largely from management and transaction fees - rose by nearly 31% to $602.3 million as the firm managed more assets and earned increased fees for syndicating the debt of mostly its own deals.

During the quarter, KKR said its private equity portfolio appreciated by 5%, leveraged credit funds rose 3%, while opportunistic real estate funds were flat. By contrast, the private equity funds of Blackstone, Carlyle and Apollo rose 3.5%, 1%, and 2.1%, respectively.

KKR reported a net income under generally accepted accounting principles (GAAP) of $844.4 million, compared with a net loss of $734.6 million a year earlier, owing to a jump in investment income.

Total assets under management rose to $519 billion, up nearly 2% from the prior quarter, due to fundraising activity. Unspent capital stood at $100 billion.

(Reporting by Chibuike Oguh in New York; Editing by Christopher Cushing)