Henry Kravis

Henry R. Kravis (born January 6, 1944) is an American businessman, investor, and philanthropist.[2] He is the co-founder of KKR & Co. Inc., a global investment firm with a market cap of approximately $24.7 billion as of November 2019.[3] He has an estimated net worth of $6.4 billion as of February 2020, ranked by Forbes as the 317th richest person in the world.[1]

Henry Kravis
Personal details
Born (1944-01-06) January 6, 1944
Tulsa, Oklahoma, U.S.
Political partyRepublican
Spouse(s)Hedi Shulman (Divorced)
​
​
(m. 1985; div. 1993)​

​
(m. 1994)​
Children3
EducationClaremont McKenna College (BA)
Columbia University (MBA)
Net worthUS$6.4 billion (February 2020)[1]

Kravis is a centrist Republican who has supported a variety of socially liberal causes and made significant donations to both Democrats and Republicans.[4] [5] His lavish lifestyle has been criticized by activists looking to reform private equity regulations and restrict the practice of leveraged buyouts he pioneered.[6][7] His buyout of RJR Nabisco was portrayed in the 1989 book and 1993 film Barbarians at the Gate.

Early life

Kravis was born into a Jewish[8] 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, where he participated in student government and was elected vice president of the student council his senior year. 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.[9]

Career

Kravis at Bear Stearns
See also: Early history of private equity

After working at various jobs in New York City's financial sector, he and his first cousin, George R. Roberts,[10] 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 very young ages, 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.[11] 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
Main article: 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.[12]

Kravis and Roberts invested $120,000 of their own capital in their new firm.[13] Early investors in KKR included the Hillman Family and the Griffith family (who are also large shareholders in MGM and Time-Warner).[14] 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.[15]

Kravis in 2009

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,[16] 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.[17] Kravis was portrayed in the film by actor Jonathan Pryce.[18]

In early 1995, KKR divested its remaining holdings in RJR Nabisco, taking an overall loss on the deal. A journalist for the New York Times wrote a few years later that "the deal will go down in history as showing just how difficult it can be to get out of a huge deal that goes badly, and of the perils of putting too much money on one investment." KKR pledged not to commit so much of its fund to a single investment again in the future. However, other investments proved more profitable, and the fund still did well overall.[19]

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,[20] Playtex,[21] Beatrice Foods,[22] Safeway,[23] Toys "R" Us,[24] Borden, First Data[25] and Regal Entertainment Group.[26] A takeover of the battery maker Duracell proved particularly profitable.[19]

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.[27]

In July 2017, Kravis and Roberts announced that they would eventually be succeeded by Joseph Y. Bae and Scott C. Nuttall, who were named co-presidents and co-chief operating officers so that they might gradually take over daily operations.[13]

Personal life

Kravis has been married three times. His first marriage to Helene Diane "Hedi" Shulman ended in divorce. They had three children, Harrison S. Kravis (b. 1972, d. 1991 car accident), Robert R. Kravis (b. 1973), and Kimberly Kravis Schulhof (b. 1975).[28][29] Hedi remarried to James Thompson Ruger, son of William B. Ruger and died of cancer on April 2, 1997 at age 49.[30] Kravis later married New York designer Carolyne Roehm (born Carolyne Jane Smith) in 1985, but the marriage ended in divorce in 1993.[31] The home decorated for the couple by Robert Denning and Vincent Fourcade was parodied in the 1990 movie The Bonfire of the Vanities.[32] Kravis is currently married to a prominent Canadian economist, and former columnist and TV personality in Canada, Marie-Josée Drouin. 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.[33]

Kravis mainly lives in New York City and has a seasonal residence in Palm Beach, Florida; he also owns homes in New York City; Southampton, New York; Paris; and Sharon, Connecticut.[34]

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. In 2017, he also contributed $1 million to Donald Trump's presidential inauguration.[35]

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.[36] 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.[37] 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,[38] 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.[39] 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.[40][41][42] 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[43] and is a vice-chairman of Rockefeller University.

Awards and Honors
  • Golden Plate Award of the American Academy of Achievement, 1987[44]
  • Henry Kravis is named chairman of Sponsors for Educational Opportunity, 2014
  • Investment Management's Lifetime Achievement Award, 2015
  • Columbia Business School's Centennial Award, 2016
  • Atlantic Council's Distinguished Leadership Award, 2016
  • Carnegie Medal of Philanthropy, 2019

See also

References
  1. "Henry Kravis". Forbes. Retrieved February 24, 2020.
  2. Forbes: The World's Billionaires - Henry Kravis September 2015
  3. "KKR stock quote". Yahoo Finance. Retrieved November 11, 2019.
  4. "Greenberg Traurig hosts Out Leadership: U.S. 2016 in New York". Retrieved January 16, 2021.
  5. "Open Secrets: Henry Kravis Political Donations". Open Secrets. Retrieved January 16, 2021.
  6. Sorkin, Andrew Ross (December 6, 2007). "A Movie and Protesters Single Out Henry Kravis". The New York Times. Retrieved September 1, 2020.
  7. Widdicombe, Lizzie (December 17, 2007). "Who's Scrooge?". The New Yorker. Retrieved September 1, 2020.
  8. Jerusalem Post: The world's 50 Richest Jews: 31-40 - #38 Henry Kravis September 7, 2010
  9. "Henry R. Kravis Biography and Interview". www.achievement.org. American Academy of Achievement.
  10. "#93 George R Roberts". Forbes. 2005. Retrieved September 15, 2017.
  11. http://www.answers.com/topic/kohlberg-kravis-roberts-co (Answers.com profile)
  12. In 1976, Kravis was forced to serve as interim CEO of a failing direct mail company Advo.
  13. Michael J. de la Merced (July 17, 2017). "K.K.R. Lays Out a Line of Succession, a Rare Move in Private Equity". New York Times. Retrieved September 15, 2017.
  14. Refers to Henry Hillman and the Hillman Company. The Hillman Company (Answers.com profile)
  16. The Biggest Deal Ever. DeMott, Deborah A. Duke Law Journal, 1989, no.1
  17. Patricia O'Toole (January 21, 1990). "The Granddaddy of All Takeovers". New York Times. Retrieved September 15, 2017.
  18. John J. O'Connor (March 18, 1994). "Review/Television; Those Good Old Takeover Days". New York Times. Retrieved September 15, 2017.
  19. Floyd Norris and the International Herald Tribune (July 9, 2004). "Fund books loss on RJR after 15 years : A long chapter ends for Kohlberg Kravis". New York Times. Retrieved September 15, 2017.
  20. Lonkevich, Dan and Klump, Edward. KKR, Texas Pacific Will Acquire TXU for $45 Billion Archived June 13, 2010, at the Wayback Machine Bloomberg, February 26, 2007.
  21. Mark Potts (June 8, 1990). "Conagra to Acquire Beatrice". Washington Post. Retrieved September 15, 2017.
  22. Dodson, Steve. BEATRICE DEAL IS BIGGEST BUYOUT YET. The New York Times, November 17, 1985.
  23. FISHER, LAWRENCE M. Safeway Buyout: A Success Story. The New York Times, October 21, 1988
  24. SORKIN, ANDREW ROSS and ROZHON, TRACIE. "Three Firms Are Said to Buy Toys 'R' Us for $6 Billion." New York Times, March 17, 2005.
  25. "K.K.R. Offer of $26 Billion Is Accepted by First Data." Reuters, April 3, 2007.
  26. MYERSON, ALLEN R. and FABRIKANT, GERALDINE. "2 Buyout Firms Make Deal To Acquire Regal Cinemas." New York Times, January 21, 1998.
  27. Minchom, Clive. "Henry Kravis & George Roberts KKR Completes First Real Estate Fund Raises $1.5 Billion". Jewish Business News. Retrieved December 27, 2013.
  28. "Henry Kravis". NNDB.
  29. "Harrison S. Kravis, Student, 19 - NYTimes.com". The New York Times. July 16, 1991. Retrieved August 25, 2016.
  30. Hedi Kravis, Chic Society's Interior Designer, 49" New York Times, April 5, 1997.
  31. Shaw, Dan. "The Best Revenge (Isn't It Always)." New York Times, October 15, 2006.
  32. Halle, John.Playing Kravis's Tune CounterPunch, July 4, 2012
  33. Thomas, Landon Jr. "Parallel Paths Diverging Sharply." New York Times, May 17, 2007.
  34. DeShazer, Danae. "Portraits of New York wealth: Henry Kravis." Time Out New York, January 17–23, 2008
  35. https://www.reuters.com/article/us-usa-trump-inaugural-idUSKBN17M00Q
  36. "Kravis Prize".
  37. "About The Kravis Prize". Archived from the original on December 14, 2010.
  38. Kravis Leadership Institute at Claremont McKenna College (program website)
  39. Partnership for New York City Board of Directors Archived December 15, 2006, at the Wayback Machine
  40. The Business Council, Official website, Executive Committee Archived July 21, 2013, at the Wayback Machine
  41. Dow Chairman and CEO Andrew Liveris Elected Chairman, The Business Council , dow.com, October 19, 2012
  42. Press Release: The Dow Chemical Company, Dow Chairman and CEO Andrew Liveris Elected Chairman, The Business Council, Yahoo!, October 19, 2012
  43. Kravis Gives School $100 Million to Establish Manhattanville Campus
  44. "Golden Plate Awardees of the American Academy of Achievement". www.achievement.org. American Academy of Achievement.

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