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The Elder Barbarians: Not So Barbaric Anymore

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Henry Kravis and his cousin and business partner George Roberts are the subjects of a Wall Street Journal feature story today. Our first reaction was: leave it to the old boys to get the pro-private equity publicity machine humming after recent news of federal investigations into the industry. Second reaction: these guys seem like sweet, conservative old codgers. Third reaction: we kind of miss the barbarians at the gates days.
It’s kind of long, so here’s the shorter version, with some additional commentary:
•The midtown Kravis office is decorated with an “eclectic collection of books.” More details please! Which books? Like odd-ball, semi-porny dime-store novels? The works of the middle Roman philosophers? Or just the sort of thing that a journalist might find eclectic but someone in finance wouldn’t—like books about Jesse Livermore.
•George Roberts hangs out in Menlo Park, California. Err, that’s what the rest of us call Silicon Valley. Like where Sandhill Road is located.
•Roberts blames the stock market’s short-term, quarterly financials obsession for why going private is such an attractive option for management, but doesn’t say a word about Sarbanes-Oxley. A good idea if you are trying to placate an already uppity SEC!
•In 1981, KKR did eight deals and had just six people.
•Kravis pooh-poohs the financial aspects of the business, saying they spend just 5% of their time on financial engineering. "It's all about how to make better operating decisions [at our companies]. We have deeper teams. Our processes are better. We have formalized plans before we buy. We also make decisions more quickly on things like whether we have the right management structure," Kravis says.
•The wrap-up quote is totally worth the read through the whole thing. But because we’re here, you get it without the effort. Kravis’ parting wisdom: "Any fool can buy a company. You should be congratulated when you sell."
Inside the Minds of Kravis, Roberts [Wall Street Journal]