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

Current Crisis Management and Strategic Response

• George Roberts characterizes the current pandemic as a unique historical event with no direct precedent in his career, noting only the Great Depression and WWII as comparable global disruptions.
• Despite the severity of the crisis, Roberts reports feeling "calmer" than during past events because KKR is in its strongest financial and operational state ever.
• KKR's immediate crisis strategy focused on three specific, controllable priorities:
  • Ensuring the health and safety of all KKR employees.
  • Protecting the health and liquidity of portfolio companies.
  • Aggressively pursuing investment opportunities while competitors retreated.
• Since February 21st, KKR has deployed $18 billion across private equity, infrastructure, and credit sectors.
• International operations in Europe and Asia have been more active than U.S. operations during the crisis period.

Corporate Responsibility: Diversity and Inclusion

• KKR leadership initiated a listening tour where top executives directly called and consulted with Black employees to understand systemic issues and gather suggestions for firm improvement.
• Roberts emphasizes that significant societal change must be led by the private sector and that corporate leaders must make diversity a top priority.
• On the investment side, KKR mandates that every company with controlling interest must have at least two diverse directors.
  • This requirement was successfully implemented across 50 portfolio companies within two years, resulting in over 100 diverse board seats.
• KKR has adopted a policy requiring at least one diverse board member for any company taken public.
• Roberts argues that diversity enhances adaptability and results, citing Darwin's theory that the most adaptable, not necessarily the strongest, survive.

Partnership Dynamics and History

• KKR was founded in 1976 with only $120,000 in capital ($100,000 from mentor Jerry Kohlberg, $10,000 from Roberts and Henry Kravis) with the primary goal of "working for ourselves."
• The 40+ year partnership between Roberts and Kravis is attributed to two main structural agreements:
  • A 50-50 economic split from the firm's inception to eliminate financial competition.
  • A shared value system that prioritizes family loyalty and suppresses ego.
• The leadership model explicitly rejects internal competition; Roberts notes they "never compete against each other in golf" and always play as partners.

Philanthropy: Roberts Enterprise Development Fund

• The fund focuses on "venture philanthropy" by financing social enterprises that employ individuals facing barriers such as incarceration or substance abuse.
• Key statistics regarding the fund's portfolio:
  • 75% of participants have a history of incarceration.
  • Over 300 social enterprises currently operate within the U.S. network.
  • Approximately 25,000 individuals have received support in the last five years.
  • 80% of participants retain a job 18 months after entering a social enterprise.
• The strategic goal is to transition beneficiaries from non-profit social enterprises to for-profit organizations, ensuring long-term economic stability and self-sufficiency.

Investing Philosophy and ESG Strategy

• Roberts identifies "connecting the dots" and having the imagination to predict future trends (likened to Wayne Gretzky skating to where the puck is going) as the primary drivers of investment success.
• He asserts that developing a "sense of people" and the ability to relate to individuals is more critical to investment outcomes than quantitative financial analysis.
• Roberts critiques modern finance education for over-relying on technology and documentation while neglecting the development of interpersonal judgment.
• KKR launched its "Green Portfolio Program" in 2008 after a partnership with the Environmental Defense Fund audited 17 companies.
  • Early results included immediate cost savings, such as $15 million annually in recycling savings for Dollar General.
  • Roberts welcomes competitors copying ESG practices, believing widespread adoption benefits the world and the industry.

Leadership Advice

• Roberts advises emerging investors to find a mentor with "integrity, patience, and principle" who is willing to assume responsibility for the mentee's mistakes while granting them credit for successes.
• He cites his mentor, Jerry Kohlberg, as the single most significant inflection point in his career, noting that observing both Kohlberg's successes and failures provided essential lessons in leadership.