Private Equity News & Analysis

Kravis: Private equity in golden era

Delivering the key note speech yesterday at a conference in Canada, Henry Kravis said the buyout industry is in its golden era, and while admitting ’trees don’t grow to the sky’ he dismissed the idea of bubble.

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Buyout legend Henry Kravis believes private equity is in its golden era, and though he admitted its frenetic pace may slow down, he said no bubble is set to burst.

“Stars are aligned, there is plenty of capital on one side, and you have a very receptive community of companies,” said the founder of Kohlberg Kravis Roberts, Bloomberg reported.

“Will there be a bubble? I don’t even know what that means,” Kravis told more than 500 attendees at Tuesday’s Canadian Venture Capital and Private Equity Association’s annual conference, The National Post reported.

Kravis: PE in ’golden era’

In the future, Kravis said he expects the industry to match or better its current, astronomical success. The world’s top 50 private equity firms raised more than $551 billion in the past five years, according to the PEI 50, a league table recently published by sister publication Private Equity International.

Kravis, whose firm is notoriously enveloped in privacy, also admitted private equity has done a “lousy job” of explaining itself and needs to better its public relations, The Globe and Mail reported. He attempted to dispel the industry’s negative image of asset-stripping and job-slashing, which led him to joke about the name-calling general partners have endured.

I went from ’barbarian’ to ’locust’ – and I think ’barbarian’ is better.

Henry Kravis

“A number of us had the great title of ‘locusts’ put on us in Germany. And I have to say, I really was disappointed with that term, because I went from ‘barbarian’ to ‘locust’ – and I think ‘barbarian’ is better,” Kravis quipped.

During a question and answer segment, Kravis was asked about reports of a pending KKR initial public offering. “It’s hard for me to comment because we haven’t announced anything,” he said, according to Bloomberg.

Kravis was also quizzed as to KKR’s role in a consortium bidding for Canadian telecom giant BCE, The Globe and Mail said. BCE has an estimated market capitalisation of $30 billion (€22 billion) .

“If we’re fortunate enough to be selected when it’s all over, we’ll be a minority investor behind two or three very important Canadian pension funds,” Kravis said. “They will control the company; this is a Canadian asset. You have rules up here [regarding foreign investment]; we understand those rules and are certainly happy to abide by that.”