Henry Kravis
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Henry R. Kravis, born January 6, 1944 in Tulsa, Oklahoma, United States, is a business financier and investor.
The son of Raymond Kravis, a Tulsa oil engineer who had been a business partner of Joseph P. Kennedy, Sr., Henry Kravis majored in economics at Claremont McKenna College in Claremont, California before going on to Columbia University where he received an MBA degree in 1969. He co-founded the private equity firm Kohlberg Kravis Roberts which has had a transformative effect on the way US business is financed involving more ownership by managers and consequently more accountability.
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Personal
Henry Kravis has been married three times. His first wife from whom he was divorced died in 1997 and their 18-year-old son was killed in an automobile accident in 1991. He remarried, to Jane Smith (the real name of New York designer Carolyne Roehm) in 1985, but it ended in divorce in 1993. He is now married to the prominent French-Canadian economist, Marie-Josée Drouin, a Fellow of the [[Hudson Institute] and a columnist and TV personality in Canada. A supporter of moderate Republican politics, and a major contributor to the failed 1992 re-election campaign of President George H. W. Bush, in 1997 Henry Kravis joined with Edgar Bronfman, Sr. and Lewis Eisenberg, to establish the [[Republican Leadership Council] to promote fiscal responsibility and moderate social programs]. Beyond politics, Kravis has given a great deal of money and his personal time to charitable causes. He funds the Henry Kravis Leadership Institute ([1] (http://kli.claremontmckenna.edu)) that sponsors the leadership studies programs at his alma mater, Claremont McKenna College, and the "Henry Kravis Internships for Teachers of Color," He is a benefactor and a past Chairman of New York's public television station and sits on the board of the Metropolitan Museum of Art. A Trustee of Mount Sinai Medical Center, Henry and Marie-Josée Kravis donated $15 million to establish the "Center for Cardiovascular Health" as well as funding a Professorship. He co-chaired with Jerry Speyer The Partnership for New York City and created the New York City Investment Fund, a non-profit organization to create jobs and new business in New York City.He chairs the Columbia Business School Advisory Board and is vice-chairman of Rockefeller University.
Business
After working at various jobs in New York City's financial sector, he and his cousin, George R. Roberts, joined the staff of Bear, Stearns, and Company. There, they worked under the corporate finance manager, Jerome Kohlberg, Jr.. In 1976, the three men left Bear, Stearns to set up their own investment company, Kohlberg Kravis Roberts & Co. (KKR) where Henry Kravis helped develop the acquisition concept known as the leveraged buyout (LBO). Kravis and his associates created a series of limited partnerships to acquire various corporations, ones they judged were performing well below their sales and profit potential. In most cases, Kohlberg Kravis Roberts & Co put up ten percent of the acquisition price from its own funds and borrowed the rest from investors by issuing high-yield bonds. In the 1980s, these high-yield bonds, which were also high risk, became known as "junk bonds." Investment bankers such as Drexel Burnham Lambert, led by Michael Milken, raised enormous amounts of money for leveraged buyouts. Once the targeted company was successfully taken over, Kohlberg Kravis Roberts & Co then organized a drastic restructuring, selling off selected assets or subsidiaries and implementing a series of cost-cutting measures. The new, "leaner and more efficient" company was then resold, at a huge profit.
In 1987, Jerome Kohlberg, Jr. resigned from the firm, and Henry Kravis succeeded him as senior partner. Under Kravis, the firm was responsible for the 1988 leveraged buyout of RJR Nabisco. At a cost of $24.88 billion, it was then the highest price ever paid for a commercial enterprise. The publicity surrounding the event led to the story being dramatized in the book and film, Barbarians at the Gate. In early 1995, Kohlberg Kravis Roberts & Co divested its remaining holdings in RJR Nabisco.
The list of companies Henry Kravis has bought and sold over the years includes many of the great American brand names such as Texaco, Gillette, Playtex, Beatrice, Safeway, Borden, and Samsonite.
See also
External links
- Forbes.com: Forbes World's Richest People (http://www.forbes.com/finance/lists/10/2004/LIR.jhtml?passListId=10&passYear=2004&passListType=Person&uniqueId=ED7G&datatype=Person)
Interview
- Academy of Achievement: Henry R. Kravis Interview - February 12, 1991 (http://www.achievement.org/autodoc/page/kra0int-1)