In 1987, Henry Kravis attracted the attention of the world with his audacious US$31.4 billion bid for RJR Nabisco, at that time the world's biggest buyout.
The deal came to epitomise 'the greed is good' culture that many associated with Wall Street in the 1980s and was immortalised first in a book, Barbarians at the Gate, and then a film. Kravis was a poster boy for the period. But the film's depiction of Kravis as an ice-cool greed-driven Gordon Gekko-type is far from the truth, although he is fabulously wealthy, measuring his wealth in the billions, with at least four luxury homes. Together with his wife, economist Marie-Josee Drouin, he's a prominent figure on New York's social scene. His wife is an influential figure in her own right, sitting on corporate boards and think tanks and the president of the Museum of Modern Art in New York. They are the ultimate power couple.
In Hong Kong recently to meet investors, Kravis comes across as genuinely charming. He is short but immaculate in a grey suit and looks fit for his 66 years. He has a southern edge to his speech as he talks about the origins of Kohlberg Kravis Roberts and how it grew into one of the leading private-equity companies.
When KKR opened for business in 1977 with Kravis, his cousin George Roberts and Jerome Kohlberg, it specialised in what was then referred to as bootstrap financing. It came to be called leveraged buyouts, before the current term private equity was adopted. The three partners had worked at Bear Stearns together and saw a business opportunity for this kind of financing, which was new at the time but has since grown into a multibillion-dollar industry and has been responsible for some of the world's biggest corporate takeovers.
However, Kravis seeks to put a little distance between his firm and Wall Street. 'We are not a finance firm per se - we pay fees to Wall Street firms.'
Buyout companies typically made their money by attracting funds from investors like insurance companies and pension funds that wanted to make higher returns than they could get from stocks or bonds.