PE giant KKR’s Bae, Nuttall succeed founders as co-CEOs

REUTERS/Brendan McDermid

KKR & Co Inc said on Monday it has elevated its co-presidents Scott Nuttall and Joseph Bae to co-chief executive officers, succeeding the storied private equity firm’s billionaire co-founders Henry Kravis and George Roberts.

The transition has been in the works for years and is unlikely to surprise the firm’s investors. KKR had named Bae, 49, and Nuttall, 48, as co-presidents in 2017. KKR said on Monday that Kravis, 77, and Roberts, 78, would remain involved in the running of the firm as executive co-chairmen.

KKR‘s shares have tripled in value and its assets under management and distributable earnings have doubled since Bae and Nuttall officially became Kravis’ and Roberts’ top lieutenants four years ago, KKR said.

Still, Nuttall and Bae face a high-stakes challenge in replicating the successful working relationship of Kravis and Roberts, two cousins who started KKR 45 years ago. From having their names as part of KKR‘s acronym to maintaining a close-knit culture of old-school Wall Street loyalty, they maintained a tight grip on the firm and helped shape the leveraged buyout industry.

The move leaves Blackstone Group Inc CEO Stephen Schwarzman, 74, as the only founder of a major publicly listed private equity firm not to have relinquished the role of chief executive, though his No. 2, president and chief operating officer Jonathan Gray, has been in line for years to succeed him.

In 2018, Carlyle Group Inc CEO Kewsong Lee took over from co-founders David Rubenstein, William Conway and Daniel D’Aniello, and Ares Management Corp CEO Michael Arougheti succeeded co-founder Tony Ressler. Apollo Global Management Inc co-founder Marc Rowan became CEO in March, replacing Leon Black who stepped down in the wake of scrutiny of his ties to the late financier and convicted sex offender Jeffrey Epstein.

Nuttall and Bae both joined KKR in 1996. Nuttall had previously spent less than two years at Blackstone, while Bae had a similarly short stint at Goldman Sachs Group Inc’s principal investments group.

Nuttall helped take KKR public, a process that involved merging the firm with an Amsterdam-listed fund in 2009 and then moving the listing to New York in 2010. He has been a fixture on the firm’s quarterly earnings call with Wall Street analysts and also ran KKR‘s capital markets, insurance, credit, hedge funds and fundraising initiatives.

Bae has been the main driver of KKR‘s expansion into Asia, making the firm one of the largest U.S. private equity investors on the continent. The Korean-American dealmaker also sat on the investment committees of KKR‘s global private equity business.

By attracting money from some of the world’s largest institutional investors such as pension plans and sovereign wealth funds, KKR grew from a single $30 million fund in 1978 to more than $429 billion in assets under management currently. These assets span private equity, real estate, corporate credit and hedge funds.

KKR first gained widespread recognition through its $25 billion leveraged buyout of RJR Nabisco in 1988, a battle that was immortalized in the bestseller “Barbarians at the Gate”. Its current investments include ride-sharing start-up Lyft Inc , beauty products maker Wella AG and media group Axel Springer SE.

Kravis and Roberts have an estimated net worth of $8.6 billion and $9.1 billion, respectively, according to Forbes.

In addition to its leadership changes, KKR said on Monday it would take steps to eliminate its dual-class share structure. Carlyle was the first major publicly-listed private equity firm to do this 2019, followed by Apollo this year.

KKR said that its common shareholders will be able to vote on a one-to-one basis on all major important issues, including the election of board directors. It added that this will be achieved though a complex web of mergers of KKR entities to be completed by 2026.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.