CG Carlyle Group Inc

KKR & Co. said it swung to a third-quarter loss as many of its investments lost value in the period's tumultuous markets and it announced plans to change how it pays out profits to shareholders and buy back its own shares for the first time.

The New York firm on Tuesday reported a third-quarter loss of $190.6 million, or 42 cents a share, versus a profit of $89.9 million, or 21 cents, in the same period last year.

KKR's third-quarter economic net income was a loss of $286 million, or 37 cents a share, down from a gain of $419 million, or 50 cents a share, a year ago. The loss was steeper than Wall Street expected for the profitability measure, which includes unrealized gains as well as cash earnings. Analysts polled by Thomson Reuters anticipated a loss of 30 cents a share of economic net income.

The firm also said it had authorized its first ever stock buyback, committing to repurchase $500 million of its own shares, which have slumped 24% this year, including a 1% decline Tuesday to $17.60.

"Over time, we think the market will value what we do with our balance sheet, including repurchasing our own units, more than the variable distributions we have been paying," the firm's founding cousins Henry Kravis and George Roberts said in a joint statement.

The firm's shares have underperformed the stock of rival Blackstone Group LP, which is flat, and Apollo Global Management LLC, which is down 22%, but has performed better than Carlyle Group LP's decline of 31%.

Apollo and Carlyle are scheduled to report third-quarter results early Wednesday. Blackstone said two weeks ago it also swung to a third-quarter loss.

At KKR, economic net income at the firm's private-equity segment fell sharply to a loss of $133.7 million from a year earlier's gain of $666.2 million, dragged down by declining values of several companies it owns. In some cases, the values of those assets has rebounded since the end of September.

KKR reported assets under management of $98.7 billion, up from $96.1 billion a year ago but below the $101.6 billion it managed at the end of last June.

Meanwhile, KKR's distributable earnings, the portion of profits in which shareholders can get a slice, were $349 million in the third quarter, down 31% from the year prior's $505 million.

KKR said it would pay a dividend of 35 cents for the quarter, a decrease from 45 cents a year ago. It will be the firm's last variable dividend. KKR said it would adopt a fixed quarterly dividend of 16 cents starting in the current period. The move, the firm said, is designed to free up cash that it can use to buy back its own shares, invest alongside deals made by its funds and acquire other businesses, such as hedge funds.

Write to Ryan Dezember at ryan.dezember@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

October 27, 2015 17:25 ET (21:25 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.