Henry Kravis

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Henry R. Kravis
Henry Kravis.png
Kravis at the World Economic Forum in 2009.
Born (1944-01-06) January 6, 1944 (age 70)
Tulsa, Oklahoma, U.S.
Residence New York, New York, U.S.
Palm Beach, Florida, U.S.
Ethnicity Jewish
Alma mater Claremont McKenna College (B.A.)
Columbia Business School (M.B.A.)
Occupation Founder of Kohlberg Kravis Roberts
Net worth Increase $4.5 billion (March 2013)[1]
Spouse(s) Helene Diane Shulman
Carolyne Jane Smith
Marie-Josée Kravis
Parents Raymond Kravis
Bessie Roberts

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 May 2014, ranked by Forbes as the 94th richest man in America and the 281st richest man in the world.[1] He mainly lives in New York City and has a residence in Palm Beach, Florida.

Early life[edit]

Kravis was born into a Jewish[2] family in Tulsa, Oklahoma, the son of Bessie (Roberts) and Raymond Kravis, a successful Tulsa oil engineer who had been a business partner of Joseph P. Kennedy. Kravis began his education at the Eaglebrook School, ('60) followed by high school at the Loomis Chaffee School. He then majored in economics at Claremont McKenna College in Claremont, California and graduated in 1967 before going on to Columbia Business School, where he received an MBA degree in 1969.[3]

Career[edit]

Kravis at Bear Stearns[edit]

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.[citation needed] 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[edit]

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[edit]

Kravis has been married three times. His first marriage was to Helene Diane Shulman. He later married New York designer Carolyne Roehm (born Carolyne Jane Smith) in 1985, but the marriage ended in divorce in 1993.[16] The home decorated for the couple by Robert Denning and Vincent Fourcade was parodied in the 1990 movie The Bonfire of the Vanities.[17] 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.[18]

Kravis owns homes in New York City; Southampton, New York; Palm Beach, Florida; Paris; Meeker, Colorado; and Sharon, Connecticut.[19]

Politics[edit]

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.

Kravis has been subjected to criticism from various liberal campaigns, most notably "War on Greed," which attempts to document his lifestyle in an effort to force legislative changes in relation to the taxation of private equity, specifically the carried interest earned by private equity firms.[20]

Philanthropy and public positions[edit]

The Henry R. Kravis Prize in 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, 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[edit]

References[edit]

  1. ^ a b c Forbes: The World's Billionaires - Henry Kravis March 2013
  2. ^ Jerusalem Post: The world's 50 Richest Jews: 31-40 - #38 Henry Kravis September 7, 2010
  3. ^ Kravis Bio
  4. ^ http://www.answers.com/topic/kohlberg-kravis-roberts-co (Answers.com profile)
  5. ^ In 1976, Kravis was forced to serve as interim CEO of a failing direct mail company Advo.
  6. ^ Refers to Henry Hillman and the Hillman Company. The Hillman Company (Answers.com profile)
  7. ^ *Burrough, Bryan. Barbarians at the Gate. New York: Harper & Row, 1990, p. 136-140
  8. ^ The Biggest Deal Ever. DeMott, Deborah A. Duke Law Journal, 1989, no.1
  9. ^ Lonkevich, Dan and Klump, Edward. KKR, Texas Pacific Will Acquire TXU for $45 Billion Bloomberg, February 26, 2007.
  10. ^ Dodson, Steve. BEATRICE DEAL IS BIGGEST BUYOUT YET. The New York Times, November 17, 1985.
  11. ^ FISHER, LAWRENCE M. Safeway Buyout: A Success Story. The New York Times, October 21, 1988
  12. ^ SORKIN, ANDREW ROSS and ROZHON, TRACIE. "Three Firms Are Said to Buy Toys 'R' Us for $6 Billion." New York Times, March 17, 2005.
  13. ^ "K.K.R. Offer of $26 Billion Is Accepted by First Data." Reuters, April 3, 2007.
  14. ^ MYERSON, ALLEN R. and FABRIKANT, GERALDINE. "2 Buyout Firms Make Deal To Acquire Regal Cinemas." New York Times, January 21, 1998.
  15. ^ Minchom, Clive. "Henry Kravis & George Roberts KKR Completes First Real Estate Fund Raises $1.5 Billion". Jewish Business News. Retrieved 27 December 2013. 
  16. ^ Shaw, Dan. "The Best Revenge (Isn't It Always)." New York Times, October 15, 2006.
  17. ^ Halle, John.Playing Kravis's Tune CounterPunch, July 4, 2012
  18. ^ Thomas, Landon Jr. "Parallel Paths Diverging Sharply." New York Times, May 17, 2007.
  19. ^ DeShazer, Danae. "Portraits of New York wealth: Henry Kravis." Time Out New York, January 17–23, 2008
  20. ^ War on Greed Campaign Website
  21. ^ "The Kravis Prize". 
  22. ^ "About The Kravis Prize". 
  23. ^ Kravis Leadership Institute at Claremont McKenna College (program website)
  24. ^ Partnership for New York City Board of Directors
  25. ^ The Business Council, Official website, Executive Committee
  26. ^ Dow Chairman and CEO Andrew Liveris Elected Chairman, The Business Council, dow.com, October 19, 2012
  27. ^ Press Release: The Dow Chemical Company, Dow Chairman and CEO Andrew Liveris Elected Chairman, The Business Council, Yahoo!, October 19, 2012
  28. ^ Kravis Gives School $100 Million to Establish Manhattanville Campus

External links[edit]