Conversation with KKR Co-Founders Henry Kravis and George Roberts | Global Conference 2025

KKR Firm Scale and History:

• Founded nearly 50 years ago by cousins Henry Kravis and George Roberts.
• Currently manages $664 billion in assets with 4,400 employees globally.
• Firm is listed on the S&P 500 and has over 90% of portfolio companies with no or limited tariff exposure.

Current Market Sentiment and CEO Priorities:

• CEOs identify tariffs, regulatory uncertainty, and the speed of policy changes as the top three agenda items.
• Many corporations, particularly in Europe, are pausing investment decisions ("sitting on their hands") awaiting clearer political outcomes.
• Investors are primarily concerned with tariff impacts and the liquidity of alternative asset monetizations.

Investment Activity and Capital Deployment:

• KKR deployed over $30 billion since the beginning of the year, with approximately half directed offshore (notably in Asia).
• Year-to-date private equity investments totaled $11 billion across the US, Europe, and Asia.
• Over the last decade, KKR returned $2 for every $1 invested, focusing on linear capital deployment rather than market timing.
• Infrastructure is identified as a high-opportunity sector due to high interest rates creating value and reduced competition compared to private equity.
• Real estate is currently considered unattractive for new investment due to insufficient expected returns.

Strategic Shifts and Historical Context:

• Henry Kravis and George Roberts compare current trade disruptions to the Great Depression, the early 1970s wage-price controls, the 1980s recession, and the 2008 financial crisis, asserting current conditions are less severe.
• European leadership (e.g., Germany's Chancellor Merz) is driving a shift toward self-reliance with significant infrastructure spending, creating new investment opportunities previously dormant.
• KKR successfully executed a reverse merger to create KKR & Co. (KKO), securing permanent capital and a public balance sheet that survived the 2008 crisis.
• Strategic acquisitions include the full purchase of Global Atlantic (insurance) and a distribution partnership with Capital Group to access Retail Investment Advisors (RIAs).

Retailization of Private Equity:

• Addressable market for retail alternatives is projected to reach $34 trillion from 401(k) assets over the next 25 years at a 5% growth rate.
• KKR's retail assets under management have grown from $8 billion to $21 billion in one year via four product categories: private equity, infrastructure, real estate, and credit.
• Retail products offer investors access to private markets with liquidity options over a five-year period.
• Competition in this space is expected to increase as other firms follow KKR and Blackstone's lead in democratizing private capital.

Corporate Culture and Succession:

• Day-to-day operations are led by co-CEOs Scott Nuttall and Joe Bay following a succession plan developed by Kravis and Roberts.
• Compensation is based on a global "balance sheet" approach rather than siloed performance, reinforcing a team-oriented culture.
• Decision-making is pushed to younger employees to foster courage and ownership, with senior leadership assuming liability for failures.
• The "Barbarians at the Gate" narrative is acknowledged as a historical artifact from the late 1980s that no longer reflects the firm's current community-focused operational model.

Partnership Dynamics and Advice:

• Kravis and Roberts credit their long-term success to avoiding conflicts over money, ego, and sex, maintaining equal ownership and compensation since childhood.
• Their relationship advice emphasizes mutual support, rooting for each other's success, and prioritizing the partnership over individual credit.
• The firm prioritizes emotional intelligence and face-to-face relationship building over digital communication for new deal generation.

Forward-Looking Investment Strategy:

• Investors are advised to maintain curiosity and look for cross-sector connections rather than relying on tunnel vision.
• Specific growth markets highlighted include infrastructure, Japan, India, and continued investment in Europe.
• Recommended asset allocation for individuals: 70% in fundamentals (stocks/bonds), 20% in cash equivalents, and 10% in riskier assets for upside potential.
• Confidence is expressed that markets and economies will correct themselves, with US innovation and capital flows remaining resilient despite short-term geopolitical turbulence.