Kravis and Roberts cede KKR leadership amid firm reorganisation

Scott Nuttall and Joe Bae succeed Henry Kravis and George Roberts as co-chief executives.

Industry titans and KKR co-founders Henry Kravis and George Roberts have stepped down as co-chief executives of the firm and handed over leadership to Scott Nuttall and Joe Bae.

Nuttall and Bae, co-presidents and co-chief operating officers of the firm, have been appointed co-chief executives effective immediately, according to a statement. Kravis and Roberts will become executive co-chairmen of KKR’s board of directors.

“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,” Kravis and Roberts said in a statement.

“We are looking forward to all that lies ahead and to working with Joe and Scott to fulfill our mission of fortifying companies and helping secure the retirements and livelihoods of the hundreds of millions of people around the world who depend on our support and investment expertise.”

Along with Bae and Nuttall’s promotions, KKR said it will move to a one-share, one-vote structure within five years. These reorganisation transactions are expected to increase the rights of the firm’s common stockholders, further align the interests of the current and future leadership of KKR with common stockholders, enhance corporate governance and simplify the firm’s corporate structure, according to the statement.

Bae and Nuttall joined KKR in 2006 and have both held several leadership roles at the firm.

Before his most recent role as co-president and co-COO, Bae was head of KKR Asia and the global head of infrastructure and energy real assets. He set up the firm’s first outpost in Asia-Pacific in Hong Kong in 2005.

“He was the leader who started to identify what markets KKR needs to have a presence in – Japan, Greater China, Southeast Asia, Korea, India and Australia,” a KKR insider told PEI in 2017 at the time of Bae’s appointment. “This is a lot of Bae’s own vision, figuring out and understanding where the opportunities are in Asia.”

Nuttall was previously the head of KKR’s global capital and asset management group, where he led the firm’s public markets and distribution businesses. Nuttall is known as the architect of the firm’s major strategic development initiatives, including leading KKR’s public listing in 2010 and developing the firm’s balance-sheet strategy.

Co-founders Kravis, Roberts and Jerome Kohlberg established the buyout firm almost five decades ago. Kohlberg left KKR in 1987 and established Kohlberg & Company. He passed away in 2015.

“We started with $120,000 of capital,” said Roberts in a video with Goldman Sachs in September last year. “$100,000 was Jerry’s and $10,000 was Henry and mine, so we were just trying to survive. That’s really how we got started.

“The basis for starting KKR is we wanted to work for ourselves, and we wanted to build something that was different…that’s why we jumped off the pier and decided, ‘let’s see what that’s like.’”

The New York-headquartered firm’s assets under management reached $429 billion as of end-June 2021. It amassed $59 billion of inflows in the second quarter, surpassing the $44 billion it raised throughout 2020, and it is on track to exceed its two-year target of at least $100 billion.

The firm ranked second globally in the latest PEI 300, having raised $79.9 billion between January 2016 and April 2021.

KKR has around 23 fundraises and strategies that are in market or coming to market over the next two years, including Asia NextGen Tech Growth, global impact and core private equity. It is also in the “analysis” phase of its secondaries strategy build-out, PEI reported in May. Nuttall said in prior earnings calls and during the firm’s Investor Day in March that KKR is looking at the right way to enter and grow in secondaries.