Kohlberg Kravis Roberts Investment Firm Overview

Kohlberg Kravis Roberts (KKR) is a global investment firm with a long history of success. Founded in 1976 by Jerome Kohlberg, Henry Kravis, and George Roberts, KKR has grown to become one of the largest and most respected private equity firms in the world.

KKR's early success was built on leveraged buyouts, which involve using debt to finance the acquisition of a company. This strategy allowed KKR to complete its first major deal, the acquisition of RJR Nabisco in 1988, for $25 billion.

KKR's expertise in leveraged buyouts has led to numerous successful investments over the years. The firm has a reputation for being able to identify undervalued companies and turn them around for significant profits.

On a similar theme: Robin Roberts

KKR's early 1990s investments marked a shift in their tactics, favoring industry consolidations over large leveraged buyouts.

In 1991, KKR partnered with Fleet/Norstar Financial Group in the acquisition of the Bank of New England from the US Federal Deposit Insurance Corporation.

KKR continued to make investments in the media industry, including the creation of Primedia's predecessor, K-III Communications, a platform to buy media properties.

Intriguing read: Baker Brothers Investments

The founding of the company dates back to 1850, when it was established by a group of entrepreneurs who saw an opportunity to provide quality products to the growing market.

The early years were marked by significant challenges, including a major fire that destroyed the factory in 1865, forcing the company to rebuild and adapt.

The company's first product was a type of textile that quickly gained popularity due to its durability and affordability.

KKR spent the early 1990s repaying RJR's enormous debt load through a series of asset sales and restructuring transactions.

The buyout of RJR Nabisco was completed in April 1989, and KKR didn't complete a single investment in 1990, the first such year since 1982.

KKR focused primarily on its existing portfolio companies acquired during the buyout boom of the late 1980s. Six of KKR's portfolio companies completed IPOs in 1991, including RJR Nabisco and Duracell.

Related reading: Romney Bain Capital Buyout Guitar Center

In January 1990, KKR completed the sale of RJR's Del Monte Foods to a group led by Merrill Lynch. This sale was part of KKR's plan to reduce RJR's debt.

KKR contributed $1.7 billion of new equity into RJR in July 1990 to complete a restructuring of the company's balance sheet. This equity contribution helped reduce RJR's debt and improve its financial flexibility.

RJR issued additional stock to the public in March 1991 to reduce debt further, resulting in an upgrade of the credit rating of RJR's debt from junk to investment grade.

KKR began to reduce its ownership in RJR in 1994, when its stock in RJR was used as part of the consideration for its leveraged buyout of Borden, Inc.

Readers also liked: Capital One Credit Consolidation Loan

The 1970s and 80s were a wild time for big business deals, with some truly massive mergers and acquisitions taking place.

In 1979, ITT Corporation acquired Avis Rent A Car System for $448 million, the largest corporate takeover of its time.

The 1980s saw a surge in megabuck deals, with the largest being the $25 billion merger between ITT and Starwood Hotels in 1986.

The DuPont Company acquired Conoco Inc. in 1981 for $7.4 billion, a deal that stood as one of the largest corporate takeovers of the decade.

Kohlberg Kravis Roberts (KKR) is a global investment firm with a unique company structure. Founded in 1976 by Jerome Kohlberg, Henry Kravis, and George Roberts, KKR has grown into a multinational corporation.

KKR's headquarters is located in New York City, with additional offices in key financial hubs around the world. The company's global presence allows it to tap into local markets and expertise, making it a formidable player in the investment industry.

KKR's management structure is led by a CEO, who oversees the firm's overall strategy and direction.

A unique perspective: Lisa Roberts Wilmington Trust

KKR's business structure is quite diverse, with the company operating in three main areas: private markets, public markets, and capital markets. This is according to founder Henry Kravis, who described the structure in a 2016 interview with Bloomberg.

KKR has made significant investments in private markets, with notable acquisitions including a majority stake in Avantus, a US-based solar energy and energy storage developer. In November 2023, the company acquired Potter Global Technologies from Gryphon Investors.

A fresh viewpoint: Equity Capital Markets

The company has also been active in public markets, with a reported 5% stake in Capcom and Nexon purchased by the Saudi Arabian Public Investment Fund in February 2022. KKR acquired an 8.5% stake in Nexon, the Japanese-South Korean video game company, around the same time.

KKR's capital markets activities have included the sale of Cardenas to funds affiliated with Apollo Global Management in June 2022. The terms of the deal were not disclosed.

The ownership structure of KKR Group is complex, but it's interesting to see how the company is organized.

KKR Group Co. Inc. is a shareholder of KKR Group Holdings Corp., which it acquired in July 2018, giving it more than 75% ownership.

KKR Group Partnership L.P. is the sole member of KKR Holdco LLC, also with over 75% ownership. This partnership is a key part of the KKR Group's structure.

KKR Group Holdings L.P. is a limited partner of KKR Group Partnership L.P. and holds a 25-50% stake in the partnership.

Check this out: Who Owns Bain Capital Private Equity

The company's executive co-chairmen, Henry Kravis, Roberts, and George Roberts, each hold less than 5% of the company.

Here's a breakdown of the key stakeholders:

Other key executives, such as Bruce Karpati, Scott Nuttall, Joseph Bae, Robert Lewin, and Ryan Stork, also hold less than 5% of the company.

Our company operates in a competitive landscape, with key players including Amazon, Walmart, and Target, all of which offer a range of products and services that overlap with our own offerings.

Amazon is a major competitor, with its vast e-commerce platform and extensive logistics network allowing it to reach customers across the globe.

Walmart, on the other hand, is a brick-and-mortar giant with a strong presence in local markets, offering a range of products at discounted prices.

Target is another significant competitor, known for its trendy and affordable products, as well as its loyalty program and rewards offerings.

These competitors pose a significant challenge to our company, requiring us to stay agile and responsive to changing market conditions and customer needs.

If this caught your attention, see: Bluebird American Express Walmart

In 2007, KKR filed with the Securities and Exchange Commission to raise $1.25 billion by selling an ownership interest in its management company.

The filing came just a few weeks after Blackstone Group's initial public offering, putting KKR in a competitive situation.

KKR had previously listed its KPE vehicle in 2006, but this time it would offer investors an ownership interest in the management company itself.

The onset of the credit crunch and the shutdown of the IPO market made it difficult for KKR to obtain a valuation attractive to investors.

The flotation was repeatedly postponed and called off by the end of August, marking a setback for KKR's plans.

Here's a timeline of KKR's IPO attempts in 2007 and 2008:

The IPO attempts were a complex and challenging process for KKR, but they ultimately paved the way for the company's public listing in 2009.

In the 1990s, company structures began to shift as the internet started to take off. This led to the rise of e-commerce and online shopping.

As a result, companies like Amazon and eBay were formed to capitalize on this new market. These companies started as small online marketplaces but quickly grew into global giants.

The 1990s also saw the emergence of new business models, such as subscription-based services. Companies like Netflix and Blockbuster experimented with this model, but only Netflix was able to adapt and thrive.

The internet also enabled companies to operate more efficiently, with many adopting a leaner, more agile structure. This allowed them to respond quickly to changing market conditions and customer needs.

The decade also saw the rise of outsourcing and offshoring, as companies sought to reduce costs and increase efficiency. This led to the growth of global supply chains and the emergence of new business opportunities in countries like China and India.

A unique perspective: Grant Thornton New Mountain Capital

Kohlberg Kravis Roberts has a long history of making strategic investments.

In the 1980s, KKR made a name for itself by acquiring several major companies, including RJR Nabisco.

KKR's investment strategy focuses on acquiring undervalued companies and then restructuring them to increase their value.

KKR's focus shifted to restructuring RJR Nabisco in the early 1990s.

In 1990, KKR completed the sale of RJR's Del Monte Foods to a group led by Merrill Lynch.

The company pursued additional restructurings, equity injections, and public offerings of stock to reduce debt and gain financial flexibility.

KKR contributed $1.7 billion of new equity into RJR in July 1990 to complete a restructuring of the company's balance sheet.

RJR issued additional stock to the public in March 1991 to reduce debt further, resulting in an upgrade of the credit rating of RJR's debt from junk to investment grade.

By 1995, KKR had divested itself of its final stake in RJR Nabisco.

It took KKR sixteen years of efforts to realize its original investment in RJR Nabisco, finally selling the last remnants of its 1989 investment in July 2004.

In the early 1990s, KKR shifted its investment strategy to focus on industry consolidations through leveraged buildups or rollups.

KKR's largest investment during this period was the leveraged buildup of Primedia in partnership with former executives of Macmillan Publishing.

KKR created Primedia's predecessor, K-III Communications, a platform to buy media properties, initially completing the $310 million divisional buyout of the book club division of Macmillan along with the assets of Intertec Publishing Corporation in May 1989.

KKR continued to acquire publishing assets, including a $650 million acquisition from News Corporation in 1991.

KKR partnered with Fleet/Norstar Financial Group in the 1991 acquisition of the Bank of New England from the US Federal Deposit Insurance Corporation.

In 1992, KKR completed the buyout of American Re Corporation from Aetna, as well as a 47% interest in TW Corporation, later known as The Flagstar Companies and owner of Denny's.

Among the other notable investments KKR completed in the early 1990s were World Color Press (1993-1995), RELTEC Corporation (1995), and Bruno's (1995).

Explore further: Td Cowen Acquisition

KKR Private Equity Investors will raise $200 million from the transfer of five co-investments to a KKR-sponsored co-investment fund.

The transferred co-investments are in Biomet, Inc., Dollar General Corporation, First Data Corporation, HCA Inc., and The Nielsen Company, totaling $211 million.

The value of each co-investment being transferred is $42.2 million, with KPE retaining a portion of each investment.

KPE will retain a $117.8 million co-investment in Biomet, a $232.8 million co-investment in Dollar General, a $77.8 million co-investment in First Data, a $157.8 million co-investment in HCA, and a $137.8 million co-investment in The Nielsen Company.

This transaction further enhances the liquidity position of KPE, according to Kendra Decious, CFO of KPE's managing partner.

Additional reading: Flagstar Bank Data Breach

Kohlberg Kravis Roberts (KKR) is a private equity firm that has made a significant impact on the global business landscape. Founded in 1976 by Jerome Kohlberg, Henry Kravis, and George Roberts, KKR has a rich history of successful investments and partnerships.

The firm's leadership has been instrumental in its success, with Henry Kravis serving as the co-founder and CEO. Under his leadership, KKR has made numerous high-profile acquisitions, including RJR Nabisco in 1988, which was the largest leveraged buyout in history at the time.

KKR's partnerships have also been crucial to its success, with the firm collaborating with other leading companies and organizations to drive growth and innovation.

Additional reading: Is Bain Capital a Private Equity Firm

At the helm of our organization are two very experienced leaders who have been guiding the company since 1987. Henry Kravis and George Roberts serve as the Chairmen.

One of the key decisions made by our senior leadership team was to appoint Scott Nuttall and Joseph Bae as the Chief Executives in 2021.

Here's a quick rundown of our senior leadership team:

Effective partnerships are built on mutual respect and trust, just like the partnership between our company and a leading tech firm, where we collaborated on a project that resulted in a 25% increase in sales.

Strong partnerships can provide access to new markets, expertise, and resources, as seen in our partnership with a global consulting firm, which helped us expand into new regions.

Collaboration with the right partners can also lead to innovative solutions, as demonstrated by our partnership with a research institution, which led to the development of a cutting-edge product.

Having the right partners can make all the difference in achieving business goals, as our partnership with a major retailer helped us increase our customer base by 30%.

Partnerships can also foster a culture of learning and growth, as our partnership with a non-profit organization has enabled us to develop and implement new community programs.

Worth a look: Blackrock New Etfs

Publications about KKR have provided valuable insights into the company's history and operations. George Anders' book "Merchants of Debt: KKR and the Mortgaging of American Business" was published in 1992 and offers a detailed look at KKR's business practices.

Recommended read: Fifth Third Bancorp Payment Business

Several books have been written about KKR, including "The New Financial Capitalists: KKR and the Creation of Corporate Value" by George Baker and George Smith, and "The Money Machine: How KKR Manufactured Power & Profits" by Sarah Bartlett. These books offer a range of perspectives on KKR's business model and its impact on the corporate world.

KKR's business philosophy emphasizes the importance of solid management, operational excellence, and a sound investment program. According to KKR, these fundamentals have allowed the company to achieve excellent returns on invested capital across various economic situations.

Here are some of the key books written about KKR:

If you're interested in learning more about Kohlberg Kravis Roberts (KKR), there are several publications that provide valuable insights into the company's history and operations.

KKR has been the subject of numerous books, with George Anders' "Merchants of Debt: KKR and the Mortgaging of American Business" being one of the most notable works, published in 1992.

KKR has also been featured in several other books, including "The New Financial Capitalists: KKR and the Creation of Corporate Value" by George Baker and George Smith, published in 1998, and "The Money Machine: How KKR Manufactured Power & Profits" by Sarah Bartlett, published in 1991.

Here are some notable publications about KKR:

KKR's business philosophy focuses on solid management, operational excellence, and a sound, long-term investment program. This approach has allowed them to achieve excellent returns on invested capital.

KKR has been able to successfully navigate various economic situations, including fluctuations in equity markets, lending rates, and lending capacity. They've even topped other companies like Shearson and Forstmann Little in the past.

KKR's aggressive expansion during the 1980s led to some significant mistakes. They overpaid for RJR, taking 58% of the company itself, and had to pump in $1.7 billion more for a $6.9 billion recapitalization in 1990.

In 1995, KKR traded its remaining stake in RJR for ownership of Borden Inc. This move marked a significant shift in their investment strategy.

KKR's mistakes during the 1980s were costly, with companies like Jim Walter Corporation and Seaman Furniture Co. requiring restructuring or bankruptcy proceedings.

Take a look at this: Stearns Lending

Kohlberg Kravis Roberts has continued to evolve and expand its reach in recent years. In 2018, the firm acquired a majority stake in a leading global investment banking firm.

KKR has also made significant investments in the technology sector, with a focus on growth-stage companies. This includes a $700 million investment in a leading cloud-based enterprise software company.

The firm's commitment to sustainability has also been a notable development, with the launch of a new impact investing platform in 2020.

Worth a look: What Is a Wealth Management Firm

In 2004, a consortium including KKR, Bain Capital, and Vornado Realty Trust acquired Toys "R" Us for $6.6 billion. This was one of the largest buyouts in several years, and market observers were stunned by the leverage levels and financing terms obtained by financial sponsors.

The Toys "R" Us acquisition was notable for its massive size, and it paved the way for more large-scale buyouts in the following years. KKR's ability to complete this deal despite the collapse of the Internet bubble was a testament to its financial strength and strategic vision.

KKR's involvement in the SunGard buyout in 2005 was another significant development, as it was the largest leveraged buyout completed since the takeover of RJR Nabisco in 1988. This transaction was notable for the number of firms involved, with seven private equity firms partnering to acquire SunGard in a deal valued at $11.3 billion.

A different take: Alternative Asset Management Firms

In 1996, KKR completed the bulk of fundraising for its record $6 billion private equity fund, the KKR 1996 Fund.

The debt markets were improving, allowing KKR to move on from the RJR Nabisco buyout and focus on new investments.

KKR was required by its investors to reduce its fees and calculate its carried interest based on the total profit of the fund, which would help offset losses from failed deals.

During this period, KKR made a series of notable investments, including Spalding Holdings Corporation and Evenflo in 1996, KinderCare Learning Centers in 1997, and Amphenol Corporation also in 1997.

For another approach, see: EnCap Investments

In 1998, KKR and Hicks, Muse, Tate & Furst agreed to the $1.5 billion buyouts of Regal Entertainment Group, but the deal ultimately proved to be one of KKR's least successful investments.

KKR's largest investment of the 1990s was the Regal Entertainment Group buyout, which was intended to combine Regal with Act III Cinemas and United Artists Theaters, but the deal with United Artists fell apart.

The Regal Entertainment Group buyout ultimately led to significant financial issues and the company was forced to file for bankruptcy protection in 2000.

Readers also liked: United Wholesale Mortgage Headquarters

The 2010s were a transformative decade for renewable energy. Solar power capacity grew by 20% annually from 2010 to 2019.

The International Renewable Energy Agency (IRENA) reported that solar power capacity increased from 40 GW in 2010 to over 720 GW in 2019.

The cost of solar panels decreased dramatically, making them more competitive with fossil fuels. In 2010, the cost of a solar panel was around $3 per watt, while by 2019 it had dropped to around $0.25 per watt.

The growth of renewable energy in the 2010s was driven in part by government policies and incentives. Many countries implemented feed-in tariffs and tax credits to encourage the adoption of renewable energy technologies.

The European Union's Renewable Energy Directive set a target of 20% of its energy coming from renewable sources by 2020. The directive helped drive the growth of renewable energy in Europe, with solar power capacity increasing by over 1,000% from 2010 to 2019.

Intriguing read: Thoma Bravo Growth