Profile: KKR

Back in 1976, Henry Kravis and George Roberts started Kohlberg, Kravis & Roberts (KKR). They were pioneering a new way to buy a company: the leveraged buyout. The concept was to use a portion of equity and a significant amount of debt. So long as the company was able to pay the interest charges, the deal would likely post strong returns for investors.

The firm has the advantage of going through various market cycles -- recessions, inflation, credit crunches, and terrorist events. Despite the volatility, the firm has been able to achieve highly competitive returns for its investors. As a result, KKR has long-standing relationships with its investors. The top ten have invested with KKR for an average of 16 years.

Now, KKR has 400 employees, of which 140 are investment professions. And Kravis and Roberts are still involved in the day-to-day management of the firm.

Some of their achievements include:

• The first LBV in excess of $1 billion
• The first buyout of a company by tender offer
• Some of the largest buyouts of the past year
• The largest buyouts in the Netherlands, Denmark, India, Australia, Singapore and France

In all, KKR manages $58 billion and has raised 16 funds in its history. Since inception, KKR members have contributed $1.5 billion in personal assets to the overall assets under management.

There are offices in New York, Menlo Park, San Francisco, London, Paris, Hong Kong, and Tokyo.

As much as possible, KKR has tried to institutionalize the process for its investment process. To this end, the firm operates Capstone Consulting, which is a team of operational consultants that know how to improve the performance of companies.

KKR also has a board of senior advisers. The group helps with such things as serving on boards, evaluating investment opportunities and providing assistance on operational mattes. Some of the members include Edwin L. Artzt (the former chairman and CEO of Proctor & Gamble), Sir John Bond (the former group chairman of HSBC Holdings plc), Richard L. Clemmer (the former CEO of Agere Systems), George M.C. Fisher (the former chairman, CEO, and president of Eastman Kodak Co.), Hirashi Hosokawa (the former Japanese Vice Minister for International and Economic Affairs), and Dr. Edward Tian Suning (the chairman of China Broadband Capital LP and the vice chairman and former CEO of China Netcom Group).

Over the years, KKR has expanded beyond equity financing for buyouts. For example, the firm has KKR Financial, which focuses on investments in debt securities.

Although, the main portion of KKR’s assets come from equity positions. Currently, there are investments in 40 companies with more than $100 billion in annual revenues and 560,000 employees.

Interestingly enough, back in the late 1980s, KKR won the biggest deal of the time -- the buyout of RJR Nabisco.  It amounted to $31.4 billion (it became the topic of a best seller, Barbarians at the Gate).

However, KKR essentially paid too much and almost cratered. No doubt, the principals learned some important lessons.

On July 3, 2007, the firm filed its prospectus with the SEC to go public.

CONTACT INFORMATION
9 W. 57th Street, Suite 4200
New York, NY 10019
Phone: 212-750-8300
Fax: 212-750-0003
www.kkr.com

BloggingBuyouts news:
July 2, 2009: Will an IPO bring more transparency to KKR?
June 29, 2009: Carlyle, KKR, JC Flowers and others eye Nan Shan Life
June 22, 2009: KKR becomes lender for Oriental Brewery buyout
June 20, 2009: KKR to ditch its IPO?
June 8, 2009: KKR and Fidelity team to offer access to IPOs
June 1, 2009: KKR posts its first loss in five years
April 27, 2009: Apollo, Blackstone, KKR funds take big hits
April 21, 2009: KKR gets some juice from the Oracle-Sun deal
March 4, 2009: KKR goes back to the future
November 11, 2008: KKR Financial cuts dividend to zero
August 5, 2008: KKR sees big bucks in infrastructure
June 9, 2008: KKR buys Unisteel for $578 million
May 1, 2008: KKR joins others in "going green" investing
March 24, 2008: KKR still bullish on semiconductors
March 12, 2008: Is the KKR IPO dead or alive?
January 15, 2008: KKR: Nice guys after all?
December 26, 2007: KKR offers $1.2 billion for HR software maker Northgate Information
November 13, 2007: KKR IPO still seems to be chugging along
October 30, 2007: China Social Secuity Fund eyes stake in US private equity firms
October 22, 2007: Compromise allows KKR and Goldman to walk away from Harman peacefully
October 16, 2007: TXU debt offering smoother than expected
September 24, 2007: KKR dodges credit crunch as First Data debt offering sails through
September 14, 2007: KKR and Blackstone try, try again for Cadbury liquids
September 10, 2007: KKR negotiates First Data deal with banks
August 23, 2007: KKR says IPO is still a go
August 15, 2007: TXU may break up if KKR buyout fails
July 18, 2007: KKR offers $24 billion for Macy's
July 3, 2007: KKR files for IPO
June 21, 2007: KKR reportedly mulling IPO
April 26, 2007: KKR, Goldman bid $8 billion for Harman International

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