Joe Bae, Co-CEO of KKR and Founder of The Asian American Foundation

Career Trajectory and Background

• Joe Bae is the Co-CEO of KKR and has been with the firm for 26 years after leaving his role as a private equity analyst at Goldman Sachs in the 1990s.
• He declined a spot at Harvard Business School to accept an analyst position at KKR, a decision his immigrant father initially opposed but later validated after 26 years.
• Bae was the architect of KKR's expansion into Asia, building the region's business from scratch in 2005 with no prior local presence.
• KKR now operates eight offices in Asia with over 350 employees, utilizing a highly localized strategy with only two or three expatriates.

KKR's Global and Asian Investment Strategy

• KKR's Asia-Pacific platform, now considered the most successful global investment firm in the region, represents 25–30% of the firm's business there.
• The firm has diversified beyond private equity to become the largest infrastructure investor in Asia and recently announced a $2 billion REIT purchase in Japan.
• KKR has entered the private credit business in Asia with its first fund and is active in technology growth, healthcare, and impact investing.
• Bae identifies 820 million millennials in Asia-Pacific compared to 68 million in the U.S. as a primary demographic tailwind driving investment in services, healthcare, and leisure sectors.
• The firm is prioritizing companies with strong pricing power to navigate inflation, avoiding sectors unable to pass commodity or wage costs to customers.
• KKR has invested $27 billion in sustainable themes, including solar and wind, within its infrastructure business.

Macroeconomic Outlook and Risk Factors

• Bae views the Russia-Ukraine conflict as a catalyst for a three-to-five-year focus on European energy security and a shift away from Russian natural gas dependency.
• He argues that complete decoupling from China is unrealistic; instead, the focus is on supply chain resiliency and sourcing from U.S. allies rather than full onshoring.
• KKR's investment committees are actively debating risks related to inflation (currently at 8.5%), interest rate hikes, and wage pressure.
• The firm perceives a higher risk of recession, noting that Europe is more exposed to energy shocks than the U.S., where fundamentals remain relatively strong.
• Bae sees no contradiction between energy security and net-zero commitments, advocating for natural gas as a necessary bridge for an orderly transition.

ESG, Demographics, and Workforce Shifts

• KKR has maintained a partnership with the Environmental Defense Fund for over a decade to implement environmental performance improvements across more than 60 portfolio companies.
• Over 70% of KKR's workforce is now Millennial or Gen Z, with over 80% of hires in the last two years coming from these generations.
• The firm has launched specific growth funds in technology and healthcare to align with the consumption and investment preferences of younger generations.
• KKR anticipates that the tens of trillions of dollars in upcoming wealth transfers to Millennials and Gen Z will increase individual participation in alternative investments and private equity.

Asian American Foundation (TAF) and Community Advocacy

• Bae co-founded TAF in response to a 360% year-over-year increase in anti-Asian hate attacks in New York City in 2021.
• TAF aims to build a national infrastructure for the AAPI community similar to the NAACP or Anti-Defamation League, as the community currently lacks a unified organization.
• Bae challenges the "model minority" myth, citing a 2021 NYC report showing the elderly Asian American population has the highest poverty rate of any racial group in the city's five boroughs.
• He emphasizes the need for corporate entities to develop strategic plans for AAPI support rather than relying on general goodwill, noting many firms previously had no such initiatives on their agendas.
• Bae advocates for expanding Asian American studies in K-12 and higher education, citing Harvard's initiative to hire six tenured faculty members for this purpose.
• He highlights the legal precedent for birthright citizenship in the U.S. stemming from a Chinese citizen denied re-entry in the early 1900s to underscore the historical integration of Asian Americans.

Leadership Philosophy and Culture

• During the COVID-19 pandemic, KKR held daily global partner calls for four months to maintain connectivity, pivot strategies, and launch a new dislocation fund.
• Bae defines success as fostering a culture where employees are encouraged to take risks, make mistakes, and learn from them to become their "best selves."
• The firm's culture avoids silos and standalone P&Ls, which allowed KKR to be the most active investor during the last two years of market dislocation.