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Henry Kravis

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Henry R. Kravis (born January 6 1944 in Tulsa, Oklahoma, United States) is an American business financier and investor, notable for co-founding and leading the prominent private equity firm, Kohlberg Kravis Roberts & Co. (KKR).

With an estimated current net worth of around $2.6 billion, he is ranked by Forbes as the 292nd richest person in the world.

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[edit] Biography

The son of Bessie (Roberts) and Raymond Kravis, a Tulsa oil engineer who had been a business partner of Joseph P. Kennedy, Henry began his education at the Eaglebrook School followed by high school at The Loomis Chaffee School. He then majored in economics at Claremont McKenna College in Claremont, California before going on to Columbia University where he received an MBA degree in 1969.

After working at various jobs in New York City's financial sector, he and his cousin, George R. Roberts, joined the staff of Bear, Stearns, and Company. There, they worked under the corporate finance manager, Jerome Kohlberg, Jr..

In 1976, the three men left Bear, Stearns to set up their own investment company, Kohlberg Kravis Roberts & Co. (KKR) where Henry Kravis helped develop the acquisition concept known as the leveraged buyout (LBO). Kravis and his associates created a series of limited partnerships to acquire various corporations, ones they judged were performing well below their sales and profit potential. In most cases, Kohlberg Kravis Roberts & Co put up ten percent of the acquisition price from its own funds and borrowed the rest from investors by issuing high-yield bonds.

In the 1980s, these high-yield bonds, which were also high risk, became known as "junk bonds." Investment bankers such as Drexel Burnham Lambert, led by Michael Milken, raised enormous amounts of money for leveraged buyouts. Once the targeted company was successfully taken over, Kohlberg Kravis Roberts & Co then organized a drastic restructuring, selling off selected assets or subsidiaries and implementing a series of cost-cutting measures. The new, "leaner and more efficient" company was then resold, at a huge profit.

In 1987, Jerome Kohlberg, Jr. resigned from the firm, and Henry Kravis succeeded him as senior partner. Under Kravis, the firm was responsible for the 1988 leveraged buyout of RJR Nabisco. At a cost of $24.88 billion, it was then the highest price ever paid for a commercial enterprise. The publicity surrounding the event led to the story being dramatized in the book and film, Barbarians at the Gate. In early 1995, Kohlberg Kravis Roberts & Co divested its remaining holdings in RJR Nabisco.

The list of companies Henry Kravis has bought and sold over the years includes many of the great American brand names such as Texaco, Gillette, Playtex, Beatrice, Safeway, Borden, and Samsonite.

[edit] Personal

Kravis has been married three times. His first wife Helene Diane from whom he divorced in the early eighties died in 1997 after a short illness with lung cancer. Their 19-year-old son was killed in an automobile accident in 1991 and he has two remaining children, Robert (1973) and Kimberly (1975).

He married Jane Smith (the legal name of New York designer Carolyne Roehm) in 1985, but it ended in divorce in 1993. The home decorated for the couple by Robert Denning and Vincent Fourcade was parodied in the 1990 movie "The Bonfire of the Vanities" with Tom Hanks.

Kravis is presently married to a prominent French-Canadian economist, Marie-Josée Drouin, a Fellow of the Hudson Institute and a columnist and TV personality in Canada.

[edit] Politics

A supporter of Republican politics, he is a supporter and fundraiser for President George W. Bush. He was a major contributor to the failed 1992 re-election campaign of President George H. W. Bush. In 1997, Henry Kravis joined with Edgar Bronfman, Sr. and Lewis Eisenberg, to establish the Republican Leadership Council.

[edit] Charity and Community

Kravis has given a great deal of money and personal time to charitable causes. He funds the Henry Kravis Leadership Institute ([1]) that sponsors the leadership studies programs at his alma mater, Claremont McKenna College, and the "Henry Kravis Internships for Teachers of Color" program.

He is a benefactor and a past chairman of New York's public television station and sits on the board of the Metropolitan Museum of Art. A Trustee of Mount Sinai Medical Center, Henry and Marie-Josée Kravis donated $15 million to establish the "Center for Cardiovascular Health" as well as funding a Professorship. They have also endowed the chair in Human Oncology at Memorial Sloan-Kettering Cancer Center in New York.

He previously co-chaired with Jerry Speyer the influential Partnership for New York City, founded by David Rockefeller in 1979, and now sits on its board of directors.[2] He created the New York City Investment Fund, a non-profit organization to create jobs and new business in New York City.

He co-chairs the Columbia Business School Board of Overseers and is a vice-chairman of Rockefeller University.

[edit] Quotes

  • "We've got a portfolio of companies that range all the way from hotels to televison stations and cable TV companies, oil and gas, consumer products, and industrial products. If there's anything that I want to know more about, I have the opportunity. It's right in our portfolio. I can spend time at the factory or with the manangement and learn as much as I want. You can't get bored doing that."
  • "A real entrepreneur is somebody who has no safety net underneath them."

[edit] See also

[edit] References

[edit] External links

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