Barbarians at the gate stand down: KKR private equity barons Henry Kravis and George Roberts quit as co-chief execs after 45 years

By HUGO DUNCAN FOR THE DAILY MAIL

PUBLISHED 12 October 2021

Two of the world's most powerful private equity tycoons have stepped down as co-chief executives of buyout firm KKR after 45 years of dealmaking.

Billionaires Henry Kravis and George Roberts – cousins who set up the business in New York with the late Jerome Kohlberg in 1976 – handed over to long-term co-presidents Scott Nuttall and Joe Bae.

The shake-up marks a changing of the guard in an industry that has long attracted fierce criticism for debt-fuelled buyouts they pioneered.

Dealmakers: Henry Kravis (left), George Roberts have stepped down as co-chief executives of their buyout firm KKR

Kravis, 77, and Roberts, 78, will stay on as executive chairmen. Kohlberg died aged 90 in 2015 having left the firm in 1987.

KKR shot to fame in 1988 when it pulled off what was then the largest leveraged buyout in history with the £18billion takeover of food and tobacco giant RJR Nabisco.

As the bidding war raged, Time magazine said the 'invisible line that separates reasonable conduct from anarchy' had been crossed, adding: 'Seldom since the robber barons of the 19th century has corporate behaviour been so open to question.'

The deal was immortalised in the best-selling book Barbarians At The Gate and a film starring James Garner as Nabisco boss F Ross Johnson and Jonathan Pryce as Kravis.

Kravis and Roberts have since grown KKR into a global titan with nearly 2,000 staff and £315bn of assets. Current investments include ride-sharing start-up Lyft and media group Axel Springer.

Earlier this year, the company set up a team of dealmakers to target British firms amid a tsunami of takeover bids in the UK.

It has offices in Hanover Square in Mayfair, central London. According to business magazine Forbes, Kravis has a fortune of £6.3billion while Roberts is worth £6.7billion.

The duo worked together at investment bank Bear Stearns before departing with their mentor, Kohlberg, to set up KKR.

Nuttall, 48, and Bae, 49, have long been seen as successors having risen through the ranks after joining KKR in their twenties in 1996.

KKR pointed out that its share price has tripled and assets under management doubled since the pair became co-presidents and co-chief operating officers in July 2017.

But they face a stiff challenge to replicate the success of Kravis and Roberts, who have maintained a tight grip on the firm for almost half a century.

In a statement announcing the shake-up, Kravis and Roberts said: 'Whether reflecting on the business, our mission or the team that undertakes it, we are proud of what we have built to support companies and serve our clients over the last four and a half decades.

Joe and Scott – over the last 25 years – have played a significant role in that endeavour and in shaping the firm, its culture, and our market leading businesses into what they are today.

'We could not be more excited about this moment in time.

'There is such a huge need for private capital to support businesses, and KKR still has so much potential even 45 years later.'

Anarchy of production - Wikipedia

https://en.wikipedia.org/wiki/Anarchy_of_Production

In Marxist theory, anarchy of production is a characteristic feature of all commodity production based on private property, which is the primary mode of production in the capitalist market economy. The term is often used as a criticism of market economies, emphasizing their chaotic and volatile nature in contrast to the stable nature of planned economies, as proposed by Marxists.