Henry Kravis

Henry R. Kravis (born 1944) is an American business financier and investor, notable for co-founding and heading the leading private equity firm, Kohlberg Kravis Roberts & Co. (KKR).

With an estimated current net worth of around $5.5 billion, he is ranked by Forbes as the 69th richest person in the world.

Biography

The son of Bessie (Roberts) and Raymond Kravis, a successful 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 first cousin, George R. Roberts, joined the staff of Bear Stearns. 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.

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 became known as "junk bonds." Once the targeted company was successfully taken over, Kohlberg Kravis Roberts 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 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, 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 the health care provider HCA Inc., Texaco, Playtex, Beatrice, Safeway, Duracell, Toys R Us, Borden, and First Data, Inc.

Personal

Kravis has been married three times. His first marriage was to Helene Diane Shulman ( deceased in 1997). They had three children before their marriage ended in divorce in the early eighties. Their 19-year-old son, Harrison, was killed in an automobile accident in 1991 and he has two remaining children, Robert and Kimberly Schulhof, both of whom are now in their thirties.

He later married Jane Smith (the legal name of Carolyne Roehm) in 1985, but it ended in divorce in 1993.

Kravis is currently married to a prominent Canadian economist, Marie-Josée Drouin, a Fellow of the Hudson Institute and a former columnist and TV personality in Canada. She also sits on the boards of the Memorial Sloan-Kettering Cancer Center and the Robin Hood Foundation, and is the current president of the Museum of Modern Art.

Kravis currently owns homes in New York, NY; Southampton, New York; Palm Beach, Florida; Paris, France; Meeker, CO; Dominican Republic and Sharon, CT

Politics

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

Public positions and charity

Kravis 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 has also financed the construction of extensive facilities at the Eaglebrook school, Deerfield Academy, and The Loomis Chaffee School.

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.[2] 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 leading business group, the Business Council. He co-chairs the Columbia Business School Board of Overseers and is a vice-chairman of Rockefeller University.

Quotes

• "We've got a portfolio of companies that range all the way from hotels to television 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 management 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 him or her."

See also

• List of billionaires
• David Rockefeller
• Private equity

References

1. Forbes 2006 ranking.

2. KKR website referencing RJR Nabisco purchase price.

External links

• Partnership for New York City website: Board of Directors
• 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 (TimesSelect) article on Kravis and the New York City Partnership.
• http://www.forbes.com/finance/lists/54/2004/LIR.jhtml
• Forbes.com: Forbes World's Richest People (2005)
• Forbes 400 richest americans (2005)