How George built the fortune
George Roberts helped invent the modern leveraged buyout. In the late 1960s and early 1970s, while working at the investment bank Bear Stearns, he and his cousin Henry Kravis joined Jerome Kohlberg in a series of deals in which a company was bought largely with borrowed money, secured against its own assets and cash flows. When Bear Stearns showed limited enthusiasm for the strategy, the three left in 1976 and founded Kohlberg Kravis Roberts, known as KKR.
KKR raised money from pension funds, insurers and other institutions, bought companies, worked to improve their operations and finances, and sold them or took them public years later. Profits were shared between the firm's partners and the investors in its funds. The model proved enormously successful through the 1980s, culminating in the 1989 buyout of RJR Nabisco, which at the time was the largest leveraged buyout ever and became the subject of the book and film Barbarians at the Gate.
Over the following decades KKR grew from a small partnership into a global investment firm managing hundreds of billions of dollars across private equity, infrastructure, real estate, credit and insurance. The firm listed its shares in New York in 2010 and later converted from a partnership into a corporation. Roberts's wealth comes from his stake in KKR itself, from his share of investment profits over nearly fifty years, and from his personal investments in the firm's funds.
Companies and holdings
His holdings are centered on KKR and Co. Inc.:
- A large personal stake in KKR's listed shares.
- Investments in KKR funds across private equity, infrastructure and credit.
- Interests in KKR's insurance arm, Global Atlantic, through the firm.
Roberts long ran KKR's operations on the West Coast from Menlo Park, California, while Kravis led the firm from New York. That division of geography allowed the firm to work closely with technology and western companies as well as East Coast industrial groups.
KKR's growth into insurance through Global Atlantic, and its expansion into infrastructure and private credit, have made the firm's earnings more steady than in the era when it depended mainly on buyouts. That shift has supported the value of the founders' shares after the firm became a corporation.
Early life and career
Roberts was born in 1943 in Houston, Texas. He and Henry Kravis are first cousins, and the two knew each other from childhood, long before they became business partners. Roberts studied economics at Claremont McKenna College in California, graduating in 1966.
He went on to earn a law degree from the University of California, Hastings College of the Law in San Francisco. After a summer job and early work at Bear Stearns under Jerome Kohlberg, he joined the firm full time and began working on the early buyout deals that would define his career. Kohlberg left KKR in 1987 after disagreements with his younger partners over the direction of the firm. The split was a turning point: from then on, Roberts and Kravis ran the firm as equal partners, each with a matching title and ownership share, an arrangement that lasted for more than three decades.
Philanthropy and public life
Roberts is known for a distinctive approach to philanthropy. In 1997 he founded REDF, originally the Roberts Enterprise Development Fund, a San Francisco organization that invests in social enterprises: businesses that employ and train people facing barriers to work, such as former prisoners, people who have experienced homelessness and young people leaving foster care. REDF applies some of the ideas of private equity, including measuring results and providing business support, to nonprofit employment programs.
He has also been a major donor to Claremont McKenna College, where an athletics and recreation facility carries his name, and to other educational and medical institutions. In 2021 he and Kravis stepped down as co-chief executives of KKR and became co-executive chairmen, handing day to day leadership to Joseph Bae and Scott Nuttall. Roberts has signed the Giving Pledge. In public he has tended to speak about the responsibilities of investors toward employees and communities, and REDF remains the project most closely associated with his name outside finance.