Lifting The Veil On KKR’s Succession Plan

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It’s been 30 years since Jerome Kohlberg resigned from KKR. But the Kravis and Roberts who join Kohlberg in making up the famous firm’s name, cousins Henry Kravis and George Roberts, still lead the buyout shop they helped form.

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As the generation that founded many of the original private equity firms ages, several industry titans have announced heirs apparent. KKR had held out—until now.

The firm has announced the appointment of Joe Bae and Scott Nuttall as co-presidents and co-COOs of KKR, roles that will see the two men assume responsibility for the firm’s day-to-day operations. Bae, 45, and Nuttall, 44, have both worked at KKR for more than two decades. Bae will focus on KKR’s private equity business and its real asset platforms, while Nuttall will concentrate on credit, capital markets and capital raising.

Kravis and Roberts teamed with Kohlberg to found KKR in 1976, when the two men were in their early 30s. In the four decades since, they’ve transformed the firm into an investing giant with nearly $138 billion in AUM, a multifaceted entity with branches extending into nearly every aspect of the economy. And they aren't going anywhere yet—Kravis and Roberts will retain their current positions as co-chairmen and co-CEOs of the firm.

The announcement adds KKR to a growing list of PE firms to tackle the question of who will take over when founders move on.

Blackstone is among the other buyout firms with a clear plan of succession, with Jonathan Gray seemingly established as next-in-line behind Stephen Schwarzman. Either Joshua Harris or Marc Rowan looks likely to follow Leon Black at the helm of Apollo Global Management. Warburg Pincus instituted a formal hand-off of power 15 years ago, when Joseph Landy and Charles Kaye took over as co-CEOs from the firm’s co-founders. The Carlyle Group, meanwhile, has encountered difficulties in its search for an heir, with Adena Friedman and Michael Cavanagh both coming and going from high-profile positions in recent years.

As you might expect, KKR didn’t slow down its deal activity just because of a little matter like two new COOs. The firm announced on Monday it has agreed to pay about $200 million for a 49% stake in Radiant Life Care, an operator of healthcare facilities in India. The deal is the latest conducted by KKR using capital from its third flagship Asian fund, which closed on $9.3 billion earlier this year.

Check out more of our KKR coverage.

Article by Kevin Dowd, PitchBook

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