Henry Kravis

Henry Kravis
Kravis at the World Economic Forum in 2009.
Born	(1944-01-06) January 6, 1944 Tulsa, Oklahoma, U.S.
Residence	New York, New York, U.S. Palm Beach, Florida, U.S.
Alma mater	Claremont McKenna College (B.A.) Columbia Business School (M.B.A.)
Occupation	Founder of Kohlberg Kravis Roberts
Net worth	$4.8 billion(September 2015)[1]
Spouse(s)	Helene Diane Shulman Carolyne Jane Smith Marie-Josée Kravis
Parent(s)	Raymond and Bessie (née Roberts) Kravis

Henry R. Kravis (born January 6, 1944) is an American businessman.^[1] He is the co-founder of Kohlberg Kravis Roberts & Co., a private equity firm with $94.3 billion in assets as of December 31, 2013. He has an estimated net worth of $4.8 billion as of September 2015, ranked by Forbes as the 108th richest man in America and the 278th richest man in the world.^[1]

Early life

Kravis was born into a Jewish^[2] family in Tulsa, Oklahoma, the son of Bessie (née Roberts) and Raymond Kravis, a successful Tulsa oil engineer who had been a business partner of Joseph P. Kennedy. Kravis began his education at Eaglebrook School, ('60) followed by high school at the Loomis Chaffee School. He attended Claremont McKenna College (then known as Claremont Men's College) and majored in economics. He was a member of the CMC varsity golf teams for four years and was a member of the Knickerbockers student service organization. He served as his sophomore class Secretary/Treasurer. He graduated from CMC in 1967 before going on to Columbia Business School, where he received an MBA degree in 1969.^[3]

Career

Kravis at Bear Stearns

After working at various jobs in New York City's financial sector, he and his first cousin, George R. Roberts, joined the staff of Bear Stearns. Kravis and Roberts share the same grandfather, an immigrant from Russia. There, they worked under the corporate finance manager, Jerome Kohlberg, Jr.. They both became partners at Bear Stearns at a very young age, 30 and 31.

Working for Bear Stearns in the late 1960s and early 1970s, Kravis, alongside Kohlberg and Roberts began a series of what they described as "bootstrap" investments. In the following years Kohlberg and later Kravis and Roberts would complete a series of buyouts including Stern Metals (1965), Incom (a division of Rockwood International, 1971), Cobblers Industries (1971), and Boren Clay (1973) as well as Thompson Wire, Eagle Motors and Barrows through their investment in Stern Metals. Although they had a number of highly successful investments, the $27 million investment in Cobblers ended in bankruptcy.^[4] Kravis and his associates created a series of limited partnerships to acquire these various corporations, ones they judged were performing well below their sales and profit potential or where there were untapped financial assets that could be monetized.

Kohlberg Kravis Roberts

By 1976, tensions had built up between Bear Stearns and the trio of Kohlberg, Kravis and Roberts leading to their departure and the formation of Kohlberg Kravis Roberts in that year. Most notably, Bear Stearns executive Cy Lewis had rejected repeated proposals to form a dedicated investment fund within Bear Stearns and Lewis took exception to the amount of time spent on outside activities.^[5]

Early investors in KKR included the Hillman Family and the Griffith family (who are also large shareholders in MGM and Time-Warner)^[6] By 1978, with the revision of the ERISA regulations, the nascent KKR was successful in raising its first institutional fund with approximately $30 million of investor commitments.^[7]

In 1987, Jerome Kohlberg, Jr. resigned from KKR, and Henry Kravis and George Roberts continued to lead the firm. Under Kravis and Roberts the firm was responsible for the 1988 leveraged buyout of RJR Nabisco. At a cost of $31.4 billion,^[8] 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 in which Henry Kravis's KKR has invested over the years includes health care provider Hospital Corporation of America (HCA), TXU,^[9] Playtex, Beatrice Foods,^[10] Safeway,^[11] Duracell, Toys "R" Us,^[12] Borden, First Data^[13] and Regal Entertainment Group.^[14]

On December 24, 2013, KKR closed their first real estate specific investment fund, which raised $1.2 billion of new money to invest. With additional funds from within KKR, the new fund provided over $1.5 billion to utilize.^[15]

Personal life

Kravis has been married three times. His first marriage to Helene Diane Shulman ended in divorce. She died of cancer on April 2, 1997 at age 49.^[16] He later married New York designer Carolyne Roehm (born Carolyne Jane Smith) in 1985, but the marriage ended in divorce in 1993.^[17] The home decorated for the couple by Robert Denning and Vincent Fourcade was parodied in the 1990 movie The Bonfire of the Vanities.^[18] Kravis is currently married to a prominent Canadian economist, Marie-Josée Drouin, and former columnist and TV personality in Canada. She sits on the boards of the Memorial Sloan-Kettering Cancer Center, the Robin Hood Foundation, and is the president of the Museum of Modern Art board of directors.^[19]

Kravis mainly lives in New York City and has a residence in Palm Beach, Florida, he owns homes in New York City; Southampton, New York; Palm Beach, Florida; Paris; Meeker, Colorado; and Sharon, Connecticut.^[20]

Politics

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

Philanthropy and public positions

The Henry R. Kravis Prize in Nonprofit Leadership, established in 2006, identifies extraordinary leaders in the nonprofit sector, celebrates their accomplishments and shares their best practices with others.^[21] The prize is presented and administered by Claremont McKenna College (CMC) and Marie-Josée and Henry Kravis. Kravis is an alumnus and trustee of Claremont McKenna College. The Kravis Prize is affiliated with the Kravis Leadership Institute, a research institute at Claremont McKenna.^[22] A formal award ceremony celebrates the recipient's accomplishments, and $250,000 is directed to a nonprofit organization designated by the recipient.

Kravis also funds the Henry Kravis Leadership Institute that sponsors the Leadership Studies programs at Claremont McKenna College,^[23] and the "Henry Kravis Internships for Teachers of Color" program. He has also financed the construction of extensive facilities at Middlesex School (Kravis House), the Eaglebrook School (Kravis Dorm), Deerfield Academy (Kravis Arena), and The Loomis Chaffee School (Kravis Hall).

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 the Mount Sinai Medical Center, Henry and wife 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.^[24] He created the New York City Investment Fund, a non-profit organization to create jobs and new business in New York City.

He is a trustee of the Council on Foreign Relations in New York, Chairman of Sponsors for Educational Opportunity, and is a member of the executive committee of The Business Council for 2011, 2012, 2013 and 2014.^[25][26][27] He co-chairs the Columbia Business School Board of Overseers where he recently pledged a gift of $100 million to support the school's new campus project^[28] and is a vice-chairman of Rockefeller University.

See also

• Kohlberg Kravis Roberts
• List of Claremont McKenna College people
• History of private equity and venture capital
• Private equity
• Leveraged buyout
• RJR Nabisco

References

External links

• Kohlberg Kravis Roberts & Co. (company website)
• KKR Private Equity Pioneers (from KKR website)
• Henry Kravis profile Forbes 2006 ranking.
• For TXU, One of the Street's Fabled Barbarians Is Back in the Hunt February, 2007 New York Times article profiling Kravis.
• Management: Consultants Put Aside Rivalries for New York November, 2001 NYT article on Kravis and the New York City Partnership.
• Forbes.com: Forbes World's Richest People (2005)
• Forbes 400 richest Americans (2005)
• ATLAS, RIVA D. "What's An Aging 'Barbarian' To Do?." New York Times, August 26, 2001
• New York Magazine article documenting Kravis and Roehm party at Metropolitan Museum of Art

Private equity and venture capital investors Investment strategy Buyout Venture Growth Mezzanine Secondaries History History of private equity and venture capital Early history of private equity Private equity in the 1980s Private equity in the 1990s Private equity in the 2000s Investor types Private equity investors Venture capitalists Corporate raiders