Joe Bay and Scott Nuttall take over as co-CEOs of private-equity firm
M/s Kravis and Roberts, first cousins who founded KKR in 1976 with Jerome Kohlberg, will continue to serve as co-executive chairman. Mr. Kohlberg died in 2015.
KKR also announced a corporate restructuring aimed at helping the firm transition from the current dual-class setup to a “one-share, one-vote” structure that gives the two founders additional influence. In doing so, it became Carlyle Group Inc. follows in the footsteps of.
and Apollo Global Management Inc.,
Rivals have also announced leadership changes. The move is just one of several industry-wide changes designed to make stocks of firms more attractive, and the boom in private-equity stocks in recent months suggests they are having the desired effect.
KKR plans to phase out its supervoting shares by the end of 2026.
M/s Kravis and Roberts, aged 78 and 79 respectively, are the leaders of the buyout industry. Although he was not the first to have what would later become known as a leveraged buyout, he is widely credited with popularizing the format in which a financial buyer buys a small amount of equity and a substantial amount of borrowing backed by a target. A company buys using cash flow.
Mr Roberts, who knows him more as an introvert who has lived in Northern California for most of his adult life, has let New York’s more heartless Mr Kravis serve as the firm’s public face.
After Mr. Kohlberg left the firm in 1987, the cousins struck a number of deals, including a historic $25 billion purchase of snack-food and tobacco giant RJR Nabisco Company in 1989. The acquisition became the subject of a bestselling book. “The barbarian at the door.” Despite its fame, the deal was not very successful: KKR exited the investment in 1995, receiving a negligible return.
RJR Nabisco held the record for largest LBO until 2007, when KKR placed itself at the top, teaming up with rival TPG to buy Texas utility TxU Corp for $31.8 billion. The deal was even less successful: TXU, later renamed Energy Future Holdings Corp., filed for bankruptcy protection in 2014—one of several megadeals from the pre-financial-crisis era that had lost its debt burden. was bent down.
M/s Kravis and Roberts went public in 2009 associating KKR with a listed European ally when the financial crisis thwarted their plans to follow long-time rival Blackstone. Inc.
With a standard IPO.
The two co-founders have led KKR as it grew into a global investment firm with $429 billion in assets across multiple business lines at the end of the second quarter. In February, the firm closed a deal to buy insurance company Global Atlantic Financial Group Ltd, giving it $90 billion more to manage.
Still, KKR’s wealth growth has lagged that of Blackstone, which manages more than $680 billion.
M/s BAE and Nutall both joined KKR in 1996. Mr. Bey, 49, was the driving force behind KKR’s successful expansion in Asia and has been in charge of its private-market investments. Mr. Nuttall, 48, oversaw the firm’s public listing and led the creation of its capital-markets and insurance businesses.
“The DNA of this firm is really the values that Henry and George have established over the past 45 years, and we plan to stay true to them,” Mr. Bey said in an interview.
—Emily Glazer contributed to this article.
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