KKR in 2004: Looking for the Second Act

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Case Details:

Case Code : BSTA050
Case Length : 17 Pages
Period : 1976 - 2004
Organization : Kohlberg, Kravis, Roberts & Co (KKR)
Pub Date : 2004
Teaching Note :Not Available
Countries : Global
Industry : Finance

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts Contd...

At The Crossroads

During their heydays, KKR's partners could pick and choose their deal. But deal flows started drying up in the late 1990s. Investors' interest shifted from old, maturing businesses to technology stocks. KKR found few opportunities coming its way. The company preferred businesses with predictable cash flows, strong brands and mature industries. It was not comfortable with the idea of investing in relatively new and unproven technology businesses.

KKR had traditionally invested in cash-rich firms that showed signs of "under-management." KKR played an active role in governance and remained an investor for five to seven years (while paying down debt), and then sold the shares for a capital gain...

Looking Ahead

Its experience, ingenuity and resources, had set KKR apart. KKR identified compelling investment opportunities and acted as a catalyst to bring together the right people and the right financial and managerial resources to create substantial value for its investors and management-partners. Since 1976, KKR had invested about $120 billion in more than 110 companies, with investors receiving returns of around 23%. But by the early 2000s, KKR's competitive position had been sharply eroded...


Exhibit I: KKR: Major Milestones
Exhibit II: KKR's Revenue Model
Exhibit III: KKR's Investments in the Mid-1980s
Exhibit IV: KKR's Investment Strategy
Exhibit V: Key KKR Officers
Exhibit VI: Largest LBO Companies by Assets (2004)
Exhibit VII: KKR's Track Record - Winners & Losers
Exhibit VIII: KKR's Investments from Inception Till 2004


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