How Henry built the fortune
Henry Kravis is one of the founders of the modern private equity industry. In 1976 he left the investment bank Bear Stearns together with his cousin George Roberts and their mentor Jerome Kohlberg to start Kohlberg Kravis Roberts, known as KKR. The three had already arranged a number of deals at Bear Stearns in which a company was bought largely with borrowed money, repaid from its own cash flows, and later sold or listed again. They called these bootstrap acquisitions; the industry later called them leveraged buyouts.
KKR raised funds from pension plans, insurers and other institutions and used them, with large amounts of debt, to buy whole companies. The firm earned management fees and a share of investment profits, known as carried interest, and its partners invested their own capital alongside clients. Over the 1980s the deals grew in size, culminating in the 1989 takeover of RJR Nabisco, a contest that became a symbol of the decade's corporate finance.
In later decades KKR diversified into infrastructure, real estate, credit, growth equity and insurance, and in 2010 it listed its shares on the New York Stock Exchange. Kravis's wealth comes from his long held ownership stake in the firm, from carried interest earned over nearly five decades and from personal investments in KKR funds.
Companies and holdings
KKR is now a global alternative asset manager with offices across North America, Europe, Asia and the Middle East. Its main business lines include:
- Private equity buyouts and growth investing
- Infrastructure and real estate funds
- Credit and lending strategies
- Insurance, through its ownership of Global Atlantic
Kravis served as co chief executive alongside George Roberts until 2021, when the two handed the chief executive roles to Joseph Bae and Scott Nuttall. Kravis and Roberts became co executive chairmen and remain closely involved in the firm's direction and investment committees. Their stakes are held through shares in the listed company and associated partnership interests.
Over the years KKR's portfolio has included household names in retail, health care, media and industrial services, and its influence on corporate governance has been significant: the firm helped popularise the idea that managers should own substantial equity in the companies they run, so that their rewards depend on the same outcomes as those of investors.
Early life and career
Kravis was born in 1944 in Tulsa, Oklahoma, where his father, Raymond Kravis, was a petroleum engineer and consultant in the oil industry. He attended Loomis Chaffee, a boarding school in Connecticut, and then studied economics at Claremont Men's College in California, now Claremont McKenna College, graduating in 1967. He went on to earn an MBA at Columbia Business School in 1969.
After short stints in finance, he joined Bear Stearns, where his cousin George Roberts was already working with Jerome Kohlberg in corporate finance. The trio's early buyouts were small family companies whose owners wanted to cash out without selling to a competitor. Those deals taught them how to structure debt, align management incentives through equity ownership and improve operations after a purchase. When Bear Stearns did not want to commit more resources to the approach, they left to form their own partnership.
Kohlberg left KKR in 1987 after disagreements over strategy, leaving Kravis and Roberts as the firm's leaders. Kravis worked mainly from New York and Roberts from California, a division that lasted for decades.
Philanthropy and public life
Kravis has been a major donor to education and culture. His largest gifts include support for Columbia Business School, where a building on the university's Manhattanville campus is named Henry R. Kravis Hall, and for Claremont McKenna College, home of the Kravis Leadership Institute and other programmes. He has also given to the Metropolitan Museum of Art and other New York institutions.
Together with his wife, the economist Marie Josee Kravis, he has funded medical research and civic projects in New York, including support for Memorial Sloan Kettering Cancer Center. He created the Henry R. Kravis Prize in Nonprofit Leadership, administered by Claremont McKenna, to recognise leaders of charitable organisations. He has been an active political donor and fundraiser over the years and has served on the boards of several nonprofit and cultural bodies.