Latest news with #HenryKravis
Sky News
03-06-2025
- Business
- Sky News
KKR abandoned Thames Water rescue despite No 10 talks with Kravis
The investment giant lined up to rescue Thames Water abandoned its offer days after talks took place involving one of its co-founders and Downing Street officials. Sky News has learnt that Henry Kravis, one of the architects of KKR's ascent to becoming one of the world's most powerful investors, discussed its plan to bail out Britain's biggest water company with Varun Chandra, Sir Keir Starmer's top business adviser, over the weekend. Sources close to the now-abandoned deal said the call between the pair had been organised following a request from Thames Water and its advisers at Rothschild. An insider said the discussion had been "constructive", with Mr Chandra said to have sought to reassure Mr Kravis that the government was supportive of the deal. One source close to KKR said, however, that its senior New York-based executives were unable to get comfortable with the level of operational and financial risk attached to investing as much as £4bn of equity into Thames Water. They were also concerned about negative rhetoric directed at Thames Water and the rest of the industry in recent weeks by Steve Reed, the environment secretary, and other ministers, the source added. KKR's decision to pull out of the discussions leaves the water company, which serves more than 15m customers across London and the Thames Valley, relying on an alternative deal being assembled by its biggest bondholders. That proposal is being progressed, Thames Water said on Tuesday, although the spectre of temporary nationalisation continues to loom over it. The company was fined a record £123m by Ofwat, the industry regulator, last week, and faces further substantial penalties in the coming months.
Yahoo
07-05-2025
- Business
- Yahoo
CEOs Crave Clarity on Trump Tariffs, Says KKR's Kravis
CEOs are very concerned about tariffs and they're "right at the top of everyone's agenda," KKR co-founder Henry Kravis said. They're looking for certainty about where tariff policy is going, he said during an interview with Bloomberg's Jason Kelly at the Milken Institute Global Conference in Beverly Hills.
Bloomberg
05-05-2025
- Business
- Bloomberg
KKR Co-Founders Urge Calm on Tariffs and Tout Europe Opportunity
KKR & Co. 's co-founders said the alternative asset manager is looking outside of the US for investment opportunities, including Europe. Europe is 'a very interesting place to invest,' Henry Kravis said in an interview Monday at the Milken Institute Global Conference in Beverly Hills. KKR has invested about $30 billion since the start of the year, about half of that offshore.
Bloomberg
05-05-2025
- Business
- Bloomberg
CEOs Crave Clarity on Trump Tariffs, Says KKR's Kravis
CEOs are very concerned about tariffs and they're 'right at the top of everyone's agenda,' KKR co-founder Henry Kravis said. They're looking for certainty about where tariff policy is going, he said during an interview with Bloomberg's Jason Kelly at the Milken Institute Global Conference in Beverly Hills. (Source: Bloomberg)
Yahoo
26-03-2025
- Business
- Yahoo
KKR Founders Help Drive Its Quest to Become a ‘Mini Berkshire'
(Bloomberg) -- KKR & Co.'s plan to break from the traditional buyout model and hold some bets on its own books for decades is being directed by a tight-knit group, including co-founders Henry Kravis and George Roberts. They Built a Secret Apartment in a Mall. Now the Mall Is Dying. Why Did the Government Declare War on My Adorable Tiny Truck? Chicago Transit Faces 'Doomsday Scenario,' Regional Agency Says Trump Slashed International Aid. Geneva Is Feeling the Impact. Paris Votes to Make 500 More Streets Car-Free The alternative asset manager's Strategic Holdings unit, launched a little over a year ago, is a key part of KKR's plan to more than quadruple earnings per share over the next decade. The firm sees a chance to build a portfolio that kicks off more than $1 billion a year in dividends. What the firm is trying to create 'is in some ways a mini Berkshire Hathaway,' Co-Chief Executive Officer Joe Bae said at the Bloomberg Invest conference in New York earlier this month. While Warren Buffett's $1 trillion conglomerate has drawn many imitators, KKR's gambit is a break from its closest rivals, who've prioritized steady fees over direct bets. A small group of executives overseeing KKR's balance sheet decide which investments make the cut, according to a person with knowledge of the matter. It includes Kravis and Roberts, Bae and co-CEO Scott Nuttall, Chief Financial Officer Rob Lewin and balance sheet Chief Investment Officer Henry McVey, said the person, who asked not to be identified discussing confidential information. The unit currently holds stakes in 18 long-term investments that are expected to compound over time instead of being flipped for a quick profit. Bae said this month that the firm intends to add infrastructure and real assets to the mix. KKR says the upside for patient investors could be massive. The firm has pointed out that Berkshire is worth almost as much as all the publicly traded asset managers in the world combined. But it's a long-term bet that will require capital now. KKR cut its share buybacks to zero last year and paid out a lower portion of its earnings as dividends than any of its major competitors. It also makes the firm a different investment case than many of its rivals, which have pitched themselves to shareholders as asset-light. KKR has more than $100 billion of investments on its balance sheet, not including its insurance unit. Apollo had $6 billion outside its insurance division, and Carlyle had less than $11 billion across its whole firm. Brookfield Corp. spun out its fund unit in 2022 to separate the businesses of holding assets and earning management fees. Strategic Holdings is 'a unique, one-off approach to long-term ownership of high-quality assets to drive balance sheet compounding,' Mike Brown, a Wells Fargo & Co. analyst who follows KKR, said in an interview. The unit 'introduces a new earnings engine.' A representative for KKR declined to comment. Buyout DNA KKR stands out for leaning into buyouts at a time when others are pulling back. Private equity has been pressured in recent years by higher interest rates, which have led to fewer deals getting done and less capital being returned to investors. But at KKR, private equity tied with infrastructure to generate the best returns — 14% — of the firm's various asset classes last year. The strategy has been enabled, in part, by its massive balance sheet. Paying out fewer dividends and buying back fewer shares allowed it to hoard cash, reinvest gains and seed various businesses. Strategic Holdings traces its roots to 2017, when a small team working under Lewin used KKR's balance sheet to make strategic acquisitions and invest in core private equity deals with partners that could produce double-digit returns over the long term. The first bet was on USI Insurance Services, a consulting and brokerage firm, led by partner Chris Harrington. KKR subsequently launched its first Core Private Equity fund to gather outside capital from those who wanted to invest alongside it. The business is now overseen by an investment committee including private equity co-heads Pete Stavros and Nate Taylor and seeks out lower-risk, cash-flowing companies that don't necessarily make sense in a traditional closed-end private equity fund. Webster Chua, an Americas private equity partner, works closely with key Core Private equity clients while originating some deals. For now, Core Private Equity and Strategic Holdings are essentially synonymous. Its current lineup of 18 investments includes lens retailer 1-800 Contacts, cybersecurity company Barracuda Networks and Australian snack food manufacturer Arnott's Group. 'This is a segment for us that's really an unconstrained addressable market,' Lewin said at a financial services conference last month. The firm owns an average 20% stake in the 18 firms, representing $3.7 billion of revenue and $900 million of adjusted earnings, he said. KKR has told investors the creation of Strategic Holdings represents no meaningful additional costs because it's run entirely by existing staff. But there is at least one glaring difference between alternative asset managers and Buffett's 60-year-old conglomerate: fees and carried interest. Strategic Holdings pays management fees and a share of gains to professionals who work on the deals, according to the firm's filings. For now, Strategic Holdings represents a small share of KKR's operating earnings, although it predicts it will generate $1.1 billion by 2030. How the firm will fund that growth remains a major question for investors. When KKR issued nearly $2.6 billion in mandatory preferred convertible equity this month to fund additional investment in three long-term holdings, the market was caught off guard, according to Well's Fargo's Brown. The move will dilute existing shareholders and cut into a projected increase in earnings from the new investments. 'The market was definitely not ready or prepared for that,' Brown said. Google Is Searching for an Answer to ChatGPT The Richest Americans Kept the Economy Booming. What Happens When They Stop Spending? Business Schools Are Back A New 'China Shock' Is Destroying Jobs Around the World How TD Became America's Most Convenient Bank for Money Launderers ©2025 Bloomberg L.P.
