Henry Kravis, co-founder of listed alternative investment firm Kohlberg Kravis Roberts, has an “unbelievable instinct for what’s going to happen in the future”, according to real estate mogul Donald Trump.
“He can look and just see it better than almost anybody and that’s an awfully great trait when it comes to business,” Trump said in a Bloomberg television biography of Kravis.
Jim Robinson, former chief executive officer of American Express, called Kravis an “absolute pioneer, innovator, like Morgan, like the Rockefellers”.
Bloomberg produced a short video about Kravis’ life and his career, including his early activities in “boot-strap” investing at Bear Stearns, the formation of KKR and the eventual seizure of RJR Nabisco, once the largest leverage buyout ever completed.
“He was not just big guns coming in, it was Godzilla wading in from the ocean and stomping down Wall Street,” Burrough said about KKR’s initial bid of $90 per share for the company, or $20 billion.
At the time, Kravis had been “outraged” that RJR’s management team had decided to court Shearson Lehman for the buyout, according to the video. Kravis committed one of the biggest sins in the acquisition business during the RJR bidding war, said Burrough. “Part of what driving Henry was the desire to win,” Burrough said.
By 1995, the investment that had been so hyped in the media was proving to be a dud for KKR, producing just about 1x return. The firm finally managed to exit the investment that year. The aftermath of RJR humbled Kravis; the death of his son in 1991 in a car accident left him struggling in his personal life.
“His personal life has a strong sense of tragedy. Losing his son, you can try and imagine but you can’t really go there,” said Lewis Eisenberg, founder of Granite Capital International Group, a friend of Kravis’.
The 1990s were a tough era for the firm, capped off by the bankruptcy of Regal Cinemas in 2001, which lost the firm about $500 million.
KKR climbed its way back to the top the following decade, and has been working to diversify its reach and build its bench of professionals.
“I don’t think there’s ever the expectation that every ball is going to be hit out of the park, but if there’s a place that can hit every ball out of the park, he’s developing a team with a deep bench at KKR and they’re going to hit a lot of balls out of the park,” Eisenberg said.