In an exclusive episode of our Deal Talk series, Moonfare’s founder and CEO, Steffen Pauls, hosted Henry Kravis, co-founder and co-executive chairman of KKR and one of the most influential people in the private equity industry. Deal Talk webinars are regular fireside chats with leading global private equity dealmakers.

In a thought-provoking conversation, Kravis talked about the power of curiosity, showing courage in the face of uncertainty, lessons learned from past crises and his views on investing in the current economic climate.

Some of the key takeaway of the conversation include:

Taking company culture seriously

Born of the ‘eat-what-you-kill’ ethos he experienced as a partner at Bear Stearns, Kravis was keen to build KKR on different values; namely, putting an emphasis on teamwork and inclusion. For instance, everyone at the firm would be rewarded for a successful transaction, regardless of their involvement in it. In Kravis’ words, this culture is the same today as it was 47 years ago. “The only difference is that today we have over 2,500 people, $510 billion of assets under management and offices in 23 cities around the world.”

Investment in C.H.I. Overhead Doors as an example of textbook alignment of interest

When asked about a deal that he views as particularly noteworthy, Kravis provided an example of a relatively recent investment in C.H.I., a company that manufactures garage doors. At the time of investment, all the employees were given certificates they could redeem at KKR’s exit. When the company was sold in 2022, all 800 employees received, on average, around $175,000. “That has a huge impact on all of the workers and the communities where C.H.I. operates… We are a big believer in everyone owning the equity,” Kravis told the audience of more than 3,000 people who dialled into the Deal Talk.

On the democratisation of private markets

“In my view, there's no reason that individuals should not have the same access to the private markets as institutions do. Moonfare and others are certainly able to provide that,” Kravis said. The iconic investor believes that gaining exposure to private market investments is especially important today when there’s an increased correlation between stocks and bonds. “If you want enhanced returns and some alpha you need to diversify and put some money in uncorrelated types of companies.”

Lessons about investing in downturns

“Focus on what you can control,” suggests Kravis. In his view, this mindset helped KKR emerge stronger out of the great financial crisis (GFC). At the same time, the firm took a proactive stance by putting money to work wherever they’ve seen good opportunities. Specifically, Kravis spent considerable time in Spain where KKR invested heavily in the aftermath of the GFC.

What Kravis looks for in CEOs

The iconic investor also revealed the top characteristics that he believes shape a good business leader such as being a team player, a good listener and communicator, while displaying a certain humility. “It’s a recipe for disaster if the smartest people in the room want everyone else to know they are the smartest,” he cautions.

Important notice: This content is for informational purposes only. The opinions expressed by the interviewee are their own. They do not purport to reflect the opinions or views of Moonfare. Moonfare does not provide investment advice. You should not construe any information or other material provided as legal, tax, investment, financial, or other advice. If you are unsure about anything, you should seek financial advice from an authorised advisor. Past performance is not a reliable guide to future returns. Don’t invest unless you’re prepared to lose all the money you invest. Private equity is a high-risk investment and you are unlikely to be protected if something goes wrong. Subject to eligibility. Please see https://www.moonfare.com/disclaimers.