Henry Kravis
Henry Kravis
Background:
Regarded as a pioneer of the private equity industry
Began his career at Bear Stearns alongside his cousin George Roberts
They both worked under Jerome Kohlberg Jr., the corporate finance manager, where they learned about a strategy now known today as a leveraged buyout
In 1976, when Bear Stearns stopped giving them the amount of funds they were asking for, Kohlberg resigned and encouraged Kravis and Roberts to join him. Together, they founded the investment banking firm Kohlberg Kravis Roberts & Co., or KKR
The objective of KKR in 1976 was to create and manage private equity funds that borrowed money to acquire underperforming businesses then hese businesses would be improved and sold at a profit
The company now has $471 billion in assets under management and 1,900 employees, consultants, and senior advisors, working across 20 industries in offices around the world
Notes from the video
How he chooses the people he works with:
Whenever he sits down with a CEO, the first question that he asks is where they see themselves in the next five years because he knows most analysts only ask CEOs about the next quarter. Based on the answer, he decides how much value to create for them.
What has made KKR constantly thrive over the past forty years?
“Every 10 years or less you have to step back and assume this is your first day on your job and you have just become the CEO.” After taking a fresh look at the company he would ask himself questions like what would he have changed if he had just taken the position of power? What would he improve if it was his first day on the job? And constantly reinvent the company.
How he was able to maintain a 71-year-old perfect relationship with the other founder (He started the company with his cousin who he has known since they were 2):
“If you got respect for the other person, if you got trust in the other person, if you both believe in a common goal you want to try to attain, and it’s much bigger than you personally, then you can go a long way”.
His advice for the audience:
“Nobody in my mind can be a great investor unless you are curious. And that means how to connect the dots by looking at a global view”.
What I learned about his personality traits:
He is always prepared for even the worst events and constantly thinks about the future. The interview was done in 2017 and when he was asked about the state of the economy, his answer was that the economy is doing great right now but there is a lot of vulnerability and you never know when there will be a black swan. North Korea could attack tomorrow. Most average people would have never considered this thought or never would have prepared themselves for such events but his prediction ended up being true as Covid came first then Russia attacked Ukraine.
He also always leads the conversation and talks about the things he wants to. He doesn’t do this in a disrespectful way but finds a way to connect his previous points to what he wants to talk about and doesn’t way for people to ask him questions. If he thinks there might be a part where the audience might have any questions he will say something like why this? Then continue explaining.
Something else that I liked about his is that he always talk in simple terms like he is talking to a kid and automatically answers any questions that he thinks might be created by the topic he is talking about. I didn’t realize the importance of this type of talking until I watched one of Ray Dalio’s interviews. As I couldn’t understand what he was talking about, I wasn’t able to connect to him as a person or understand what he was truly trying to say. This in return causes the attention of the people you are talking to decrease.
I will implement these in my speech by always making sure nobody has any questions in their mind while I’m talking but by also connecting my points together in a way that I’m able to talk about any topic I want when I’m being interviewed. I believe through leading the conversation I will be able to connect to the audience more and have more attention by talking about more interesting topics that the interviewers wouldn’t have otherwise asked. At the same time by being as simple as I can I would be able to have everyone understand me and connect to me as a person even if all they have seen about me is a 15 minute video.
The way he talks:
He talks like he is the one leading the conversation and asking the questions instead of the interviewer. For example, when he brings up a new point, he says things like we will talk about it later even though the interviewer never asked him to or he sometimes asks himself the questions like why did I do this? Then talk about a new topic that wasn’t asked about.
I believe the reason why he does this goes back to his personality trait as being a leader and always leading things. He isn’t used to the idea of waiting for people to give him instructions so he always paves the way and at this point this has become something normal to him. He is able to do this seamlessly without sounding arrogant or disrespectful.
Has a lot of facial expressions and hand movements
I believe the reason behind this is because of his self confidence in what he is explaining. It could also be because he is trying to get his point across more and emphasize on the important parts but I can’t tell for sure as for some people hand movements are a natural thing they have every time they talk. But most nervous people or people who lie have little to no hand movements and expressions so these things give me confidence in believing what he says. I will implement these movements in my talks as well as they give me credibility and make me sound much more confident and sure about my points..
Looks everywhere when he talks but doesn’t make eye contact with anyone
I believe he does this so that anybody listening to him doesn’t get uncomfortable and can continue listening. At the same time he doesn’t just stare directly into one place and keeps moving his head. Making eye contact is a good idea when you are talking to somebody you know however when you are in a room full of people who have never seen you before, most of them would prefer to not get noticed.
What I disagreed with:
He talks about how every 10 years or so he takes a fresh look at the company and innovates what he believes needs fixing. I disagree with this as 10 years is way too long of a period to be waiting for this specially in investing. The markets and the economy is changing everyday and you have to innovate your strategies along with it as often as you can. Waiting 10 years for an innovation isn’t considered innovating in my opinion as during these years, things change already even if you don’t want them. I believe a better of him saying that would have been if he took a fresh look at the company every morning he woke up.