Key Takeaways
- • Henry Kravis co-founded Kohlberg Kravis Roberts & Co. (KKR) in 1976 after leaving the firm's origins at Bear Stearns, establishing the leveraged buyout model that became central to the private equity industry.
- • KKR acquired RJR Nabisco for $25 billion, which the article cites as a landmark transaction in the firm's history.
- • KKR listed on the New York Stock Exchange in 2010, raising $1.25 billion in its initial public offering, and reported $471 billion in assets under management as of December 2021.
- • Kravis served as KKR's Co-Chief Executive Officer until 2021 and is described as having a net worth exceeding $10.4 billion as of 2024.
- • Kravis has donated $125 million to his alma mater, Columbia University, per the article.
Summary
Investopedia profiles Henry Kravis as a pioneer of the leveraged buyout (LBO) and co-founder of KKR. Kravis was born on January 6, 1944, in Tulsa, Oklahoma, and earned a bachelor's degree from Claremont McKenna College in 1967 and an MBA from Columbia University in 1969. He became a partner at Wall Street firm Bear Stearns at age 30.
Kravis began his career at Bear Stearns alongside his cousin George Roberts, working under corporate finance manager Jerome Kohlberg Jr. The team employed a "bootstrap" acquisition strategy, now known as a leveraged buyout, targeting undervalued small companies and helping them borrow capital for expansion and further acquisitions. One early deal, the 1971 acquisition of Incom International, generated $950,000 in fees for Bear Stearns, the largest realized from a single transaction at the time, according to the article.
In 1976, Bear Stearns declined to fund Kohlberg's projects and instead developed its own leveraged buyout division. Kohlberg resigned and encouraged Kravis and Roberts to join him, and the three founded Kohlberg Kravis Roberts & Co. (KKR). The firm's original objective was to raise private equity funds that borrowed against acquired underperforming businesses, improve them, and sell them at a profit. The article notes that in the early years, KKR invested roughly 10% of a buyout price from its own funds and financed the remainder through junk bonds, which in the 1980s were largely underwritten by Drexel Burnham Lambert and Michael Milken.
KKR's portfolio includes the $25 billion acquisition of RJR Nabisco and investments in income-producing U.S. real estate, including office, retail and health care properties. The firm listed on the NYSE in 2010 and raised $1.25 billion in its IPO. As of December 2021, the article reports $471 billion in assets under management and more than 2,000 employees, consultants and senior advisors across 20 industries. Kravis served as Co-Chief Executive Officer until 2021 and is described as co-executive chairman in the article's conclusion. The profile also references his board and trustee roles, including The Business Council, Claremont McKenna College, Columbia Business School, Mount Sinai Hospital and the Partnership for New York City, and notes his $125 million donation to Columbia University.
Kravis began his career at Bear Stearns alongside his cousin George Roberts, working under corporate finance manager Jerome Kohlberg Jr. The team employed a "bootstrap" acquisition strategy, now known as a leveraged buyout, targeting undervalued small companies and helping them borrow capital for expansion and further acquisitions. One early deal, the 1971 acquisition of Incom International, generated $950,000 in fees for Bear Stearns, the largest realized from a single transaction at the time, according to the article.
In 1976, Bear Stearns declined to fund Kohlberg's projects and instead developed its own leveraged buyout division. Kohlberg resigned and encouraged Kravis and Roberts to join him, and the three founded Kohlberg Kravis Roberts & Co. (KKR). The firm's original objective was to raise private equity funds that borrowed against acquired underperforming businesses, improve them, and sell them at a profit. The article notes that in the early years, KKR invested roughly 10% of a buyout price from its own funds and financed the remainder through junk bonds, which in the 1980s were largely underwritten by Drexel Burnham Lambert and Michael Milken.
KKR's portfolio includes the $25 billion acquisition of RJR Nabisco and investments in income-producing U.S. real estate, including office, retail and health care properties. The firm listed on the NYSE in 2010 and raised $1.25 billion in its IPO. As of December 2021, the article reports $471 billion in assets under management and more than 2,000 employees, consultants and senior advisors across 20 industries. Kravis served as Co-Chief Executive Officer until 2021 and is described as co-executive chairman in the article's conclusion. The profile also references his board and trustee roles, including The Business Council, Claremont McKenna College, Columbia Business School, Mount Sinai Hospital and the Partnership for New York City, and notes his $125 million donation to Columbia University.
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