George Roberts, Co-Chairman and Co-CEO of KKR

Pandemic Strategy and Capital Deployment

• Once portfolio safety and liquidity issues were ring-fenced, KKR shifted to an "offensive" stance across private equity, infrastructure, and credit.
• The firm utilized its balance sheet and capital markets to support debt raised for these opportunistic investments.
• Key focus sectors for post-crisis recovery include healthcare, technology, telecommunications, and industrial.
• Roberts notes that while 2020–2021 analysis is difficult, the outlook beyond that period is positive.

ESG, Opportunity, and Social Equity

• Roberts distinguishes between the "wealth gap" and a more pressing "opportunity gap" facing minorities and capable individuals who cannot "get their foot in the door."
• He emphasizes that racial justice and creating opportunities within and outside KKR businesses are central priorities.
• Roberts shares a personal anecdote about his Bear Stearns internship as a critical opportunity that should be accessible to more people.

KKR Founding and Early Capital Structure

• KKR was founded in 1976 with $120,000 in starting capital: $100,000 from mentor Jerry Kohlberg and $20,000 combined from Roberts and Henry Kravis.
• The founders' primary motivation was to work for themselves and build a firm distinct from traditional investment banks like Bear Stearns.

Lessons from the RJR Nabisco Deal

• Market Misconception: The firm relied on expert analysis claiming Philip Morris would never lower Marlboro prices; they did, causing initial "angst."
• Liquidity Crisis: A $2 billion reset in high-yield notes was jeopardized when Drexel Burnham collapsed and the high-yield market froze.
• Survival Mechanism: KKR successfully negotiated a reset of the notes to par, secured additional financing, and exited the deal with a more profitable, investment-grade company, though the firm itself made no profit on the transaction.
• Core Lesson: The deal reinforced Mark Twain's warning that "what you know that ain't so" is more dangerous than what you don't know.

Investment Philosophy and Talent Assessment

• Strategic Vision: Roberts attributes success to the ability to "skate to where the puck is going," requiring imagination regarding future market trajectories.
• People First: He prioritizes character assessment and the ability to relate to individuals over pure financial analysis.
• Talent Criteria: The primary differentiator for junior professionals is the willingness to speak up and express ideas, regardless of the fear of being wrong.

Geopolitical and Market Outlook

• Market Prediction: Roberts predicts the S&P 500 will be higher two years from now.
• US-China Relations: He foresees a continued divergence in US-China relations, noting the need for both nations to "learn to live with each other" despite sovereignty differences, while acknowledging areas of potential cooperation.

Career Advice

• Roberts advises newcomers to find mentors characterized by principle, integrity, and patience who provide latitude and genuine personal interest.
• He cites Jerry Kohlberg as the exemplar of such a mentor who helped launch his career.