The mercury is rising in private equity's elite bower. KKR more than doubled second-quarter distributable earnings – its main measure of profit – compared with a year earlier, improving on a pattern set by rivals Blackstone BX and Carlyle CG. By every measure, buyout barons are raking it in. Even once-existential threats to capitalism are, for now, making them richer. The $54 billion KKR and its peers are buoyed by three main trends. Valuations of companies they own are rising, juicing up private equity investments held by Henry Kravis's firm by 56% over the past year. A red-hot merger market has helped turn investments into cash, and investors still want higher returns than they can get through more lowbrow asset classes. The result is a lot of records being broken. KKR's fee-related earnings hit a new high in the second quarter. At Steve Schwarzman's Blackstone, assets under management hit $684 billion.