KKR said on Monday that it has promoted co-presidents Scott Nuttall and Joseph Bae to co-CEOs, succeeding the legendary private equity firm’s billionaire co-founders Henry Kravis and George Roberts. Roberts).
This transformation has been going on for many years and is unlikely to surprise the company’s investors. KKR has appointed 49-year-old Bae and 48-year-old Nuttall as co-presidents for 2017. KKR said on Monday that Kravis, 77, and Roberts, 78, will continue to participate in the company’s operations as executive co-chairs.
KKR stated that since Bae and Nuttall formally became Kravis and Roberts’ senior deputy four years ago, KKR’s stock value has tripled, and its assets under management and distributable income have doubled.
Nonetheless, Nuttall and Bae face high-stakes challenges in replicating the successful working relationship between Kravis and Roberts, and these two cousins founded KKR 45 years ago. From using their names as part of the KKR acronym to maintaining the tight culture of old-school Wall Street loyalty, they firmly control the company and helped shape the leveraged buyout industry.
Henry Kravis and George Roberts
This move makes the 74-year-old Blackstone Group CEO Stephen Schwarzman the only founder of a large listed private equity firm who has not given up his position as CEO, even though his second president and chief operating officer Jonathan Gray has been He was succeeded online for many years.
In 2018, Carlyle Group CEO Kewsong Lee succeeded co-founders David Rubenstein, William Conway and Daniel D’Aniello, and Ares Management Corp CEO Michael Arougheti succeeded co-founder Tony Ressler. Marc Rowan, co-founder of Apollo Global Management Inc, became CEO in March, succeeding Leon Black, who resigned after reviewing his relationship with the late financier and sex offender Jeffrey Epstein.
Nuttall and Bae both joined KKR in 1996. Nuttall previously worked at Blackstone for less than two years, and Bae also had a similar short-term job in the main investment department of Goldman Sachs.
Nuttall helped KKR go public, a process that included merging the company with a fund listed in Amsterdam in 2009, and then moving the listing location to New York in 2010. KKR’s capital markets, insurance, credit, hedge funds, and fundraising programs.
Bae has been the main driver of KKR’s expansion into Asia, making the company one of the largest US private equity investors on the continent. The Korean-American deal maker also serves as a member of the investment committee of KKR’s global private equity business.
By attracting capital from some of the world’s largest institutional investors such as pension plans and sovereign wealth funds, KKR has grown from a single fund of US$30 million in 1978 to more than US$429 billion in assets under management. These assets include private equity, real estate, corporate credit and hedge funds.
KKR’s leveraged acquisition of RJR Nabisco for US$25 billion in 1988 was widely recognized for the first time, and this battle was immortal in the bestseller “Barbarians at the Door”. Its current investments include ride-sharing startup Lyft, beauty product manufacturer Wella AG, and media group Axel Springer.
According to Forbes, the net assets of Kravis and Roberts are estimated to be US$8.6 billion and US$9.1 billion, respectively.
In addition to leadership changes, KKR also said on Monday that it will take steps to cancel its dual-shareholding structure. Carlyle was the first large publicly listed private equity firm to do so in 2019, followed by Apollo this year.
KKR stated that its common shareholders will be able to vote one-on-one on all major issues including board elections. It added that this will be achieved through a complex KKR entity consolidation network, which will be completed in 2026.