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Henry Kravis is at the door, knocking politely

By Laurie Bennett

March 18, 2009 at 9:17am

In 1988, Henry Kravis was at his zenith.

He and his then-wife, glamorous designer Carolyne Roehm, threw one of the best muckety-muck parties ever, at the Metropolitan Museum, where they had contributed $10 million.

Kohlberg Kravis Roberts, the company he founded with his cousin, George Roberts, and Jerome Kohlberg, had amassed $45 billion in buying power and was about to complete what was then the biggest leveraged buyout ever - of RJR Nabisco.

Two decades later, Kravis is still a titan. Forbes recently ranked him 205th on its annual billionaire list, with an estimated worth of $3 billion.

But like many titans, his fortunes have tumbled, and he’s taken investors down with him. His personal wealth dropped by $2.5 billion last year, Forbes reports.

Shares at his KKR Financial Holdings LLC, a publicly traded finance company, have fallen by 96 percent. On March 2, the firm reported a loss of $1.2 billion, including loans to the now-bankrupt Tribune Company. Shares of Amsterdam-listed KKR Private Equity Investors have also nosedived.

And then there was the presidential election, in which the buyout king was a bundler for John McCain.

Kravis, a steely central figure in in the book and movie Barbarians at the Gate, has been humbled, if only slightly.

In the current liquidity crisis, KKR is one of the private equity firms trying hard to woo big money. Reuters reports that Kravis and his cousin sent out a letter last month telling investors they would be communicating with them more this year.

The two pledged to expand relationships with their limited partners to “help you think through the current environment and provide whatever assistance we can.”

How quickly things have changed. Less than three years ago, Bloomberg quoted Kravits as saying, “I have never seen a market with this much liquidity and capital available.”

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2 Comments

  • #1.   Blair 03.18.2009

    I believe the RJR takeover was completed in ‘88, not ‘98…TWO decades ago…

  • #2.   Laurie Bennett 03.19.2009

    Our apologies. The error was introduced in an update of this story. We’ve fixed it, and appreciate your pointing out the problem.

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