- Jerome Kohlberg, Jr.
Jerome Kohlberg, Jr. (born 1926) is a American businessman and billionaire and is an early pioneer in the
private equity andleveraged buyout industries founding private equity firmKohlberg Kravis Roberts & Co. and later Kohlberg & Company.Kohlberg dabbles in philanthropy through the
Kohlberg Foundation . He and his wife raise endangered free-ranged livestock and fish on their farm, and some of the produce goes to his wife's restaurant, The Flying Pig, located inMount Kisco , NY. With an estimated current net worth of around $1.2 billion, he is ranked by "Forbes " as the 645-richest person in the world.Biography
Kohlberg Kravis Roberts & Co.
Kohlberg joined Bear Stearns in 1955 where he would ultimately would manage the corporate finance department. [SCHWARTZ, NELSON D. " [http://www.nytimes.com/2008/03/30/business/30maker.html What ‘the Bear’ Meant for the Street] ."
New York Times , March 30, 2008] Working forBear Stearns in the late 1960s and early 1970s, Kohlberg, alongsideHenry Kravis andGeorge R. Roberts began a series of what they described as "bootstrap" investments. Their acquisition of Orkin Exterminating Company in 1964 is among the first significantleveraged buyout transactions. [ [http://www.investmentu.com/research/private-equity-history.html The History of Private Equity] (Investment U, The Oxford Club] . In the following years the threeBear Stearns bankers would complete a series of buyouts including Stern Metals (1965), Incom (a division of Rockwood International, 1971), Cobblers Industries (1971), and Boren Clay (1973) as well as Thompson Wire, Eagle Motors and Barrows through their investment in Stern Metals. Although they had a number of highly successful investments, the $27 million investment in Cobblers ended in bankruptcy. [*Burrough, Bryan. "Barbarians at the Gate ." New York : Harper & Row, 1990, p. 133-136] Kravis and his associates created a series of limited partnerships to acquire these various corporations, ones they judged were performing well below their sales and profit potential or where there were untapped financial assets that could be monetized. In most cases, Kohlberg Kravis Roberts & Co put up ten percent of the acquisition price from its own funds and borrowed the rest from investors by issuinghigh-yield bond s. [ [http://www.cfr.org/bios/12579/henry_r_kravis.html CFR Kravis Bio] ]By 1976, tensions had built up between
Bear Stearns and the trio of Kohlberg, Kravis and Roberts leading to their departure and the formation ofKohlberg Kravis Roberts in that year. Most notably, Bear Stearns executiveCy Lewis had rejected repeated proposals to form a dedicated investment fund within Bear Stearns and Lewis took exception to the amount of time spent on outside activities. [In 1976, Kravis was forced to serve as interim CEO of a failing direct mail company Advo.] Early investors in KKR included the Hillman Family [Refers to Henry Hillman and the Hillman Company. [http://www.answers.com/topic/the-hillman-company?cat=biz-fin The Hillman Company] (Answers.com profile)] By 1978, with the revision of the ERISA regulations, the nascent KKR was successful in raising its first institutional fund with approximately $30 million of investor commitments. [*Burrough, Bryan. "Barbarians at the Gate ." New York : Harper & Row, 1990, p. 136-140]Kohlberg & Company
In 1987, Jerome Kohlberg, Jr. resigned from KKR over differences in strategy, and
Henry Kravis and George Roberts assumed full leadership of the firm. Kohlberg did not favor the large buyouts (which would likely have included the 1989 takeover ofRJR Nabisco ) orhostile takeovers . Instead, Kohlberg chose to return to his roots, acquiring smaller, middle-market companies and in 1987, he would found a new private equity firmKohlberg & Company . As of the end of 2007, Kohlberg & Company had raised sixprivate equity fund s since its inception, with approximately $3.7 billion of investor commitments. Additionally, Kohlberg also operates a series of debt investment funds under the banner of Katonah Debt Advisors, as well as a publicly traded investment vehicle Kohlberg Capital (NASDAQ:KCAP)Jerome Kohlberg retired from
Kohlberg & Company in 1994.He graduated from
New Rochelle High School inNew Rochelle, New York , before going on to earn an undergraduate degree fromSwarthmore College . He later received degrees fromHarvard Business School andColumbia Law School . In 1986, he founded thePhilip Evans Scholarship Foundation at Swarthmore.ee also
*
List of billionaires
*History of private equity and venture capital
*Kohlberg Kravis Roberts
*Henry Kravis
*George R. Roberts References
External links
* [http://www.forbes.com/finance/lists/10/2004/LIR.jhtml?passListId=10&passYear=2004&passListType=Person&uniqueId=1CAW&datatype=Person Forbes.com: Forbes World's Richest People] (2004)
* [http://www.forbes.com/lists/2006/10/1CAW.htmll Kohlberg's entry on Forbes 2006 list]
* [http://www.kohlberg.com Kohlberg & Company] (company website)
* [http://www.katonahdebtadvisors.com Katonah Debt Advisors] (company website)
* [http://www.kohlbergcapital.com/ Kohlberg Capital Corporation] (company website)
* [http://www.kkr.com Kohlberg Kravis Roberts] (company website)
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