When Henry Kravis and George Roberts stepped down as co-CEOs of private equity giant KKR this morning, the barbarians are rushing back out of the gate.
why it matters: Kravis and Roberts, along with the late Jerome Kohlberg, are the godfathers of leveraged buyouts (which were later rebranded as private equity due to the brutal capitalism practiced by LBO firms like KKR).
- This leaves the Blackstone Group as the oldest large buyout firm still led by one of its founders. There’s no word yet on when Steve Schwarzman will formally hand over command to John Grey.
description: Kravis and Roberts, cousins who live on opposite banks, will continue to join KKR as co-executive presidents. But their voting rights will be curtailed, as KKR plans to eliminate its controlling preferred stock, moving towards a “one share, one vote” model.
- The new co-CEOs are Joe Bay and Scott Nuttall, who were named co-president and co-COO in 2017. In other words, it is following a predetermined succession script.
Anecdote: I first met Kravis during an interview at a conference in Quebec City. The keynote conversation was mildly controversial at times, perhaps because I had inadvertently woken Kravis’s hotel room the night before to ask him a question.
- A few years later I was at a media “meet and greet” hosted by KKR, and made eye contact with Kravis, who stood by Roberts. He calls to introduce me: “George, this is a reporter who interviewed me in Canada. I was warned he was going to give me all these tough questions, but it was one of the easiest interviews I’ve ever had.” was one of them.”
Bottom-line: For private equity, this is the end of an era.