KKR appoints new co-CEOs, plans changes to share structure
Private equity and investment giant KKR announced the appointment of Joe Bae and Scott Nuttall as co-chief executive officers on Monday, with co-founders Henry Kravis and George Roberts to remain involved with the company as executive co-chairmen of its board.
At the same time, the US-based firm announced a series of structural and governance changes, with the first being a combination with KKR Holdings LP, which is an entity through which a number of current and former employees hold interests in KKR.
In that transaction, unitholders of KKR Holdings LP would receive one share of KKR common stock for each unit they held in KKR Holdings LP, as well as their pro rata share of an additional 8.5 million shares of KKR common stock.
KKR said that it would also eliminate its Series II preferred stock and terminate its tax receivable agreement over units of KKR Holdings LP that were not previously exchanged.
Secondly, KKR said that on 31 December 2026 it would eliminate its controlling Series I preferred stock and also acquire control of KKR Associates Holdings LP.
Following the elimination of the Series I preferred stock, all common stock would vote on a one-vote-per-share basis on all matters customarily presented to common stockholders, including around the election of directors.
KKR said the reorganisation was expected to increase the rights of its common stockholders, further align the interests of the current and future leadership of KKR with its common stockholders, enhance corporate governance, and simplify its corporate structure.
The board said Bae and Nuttall would be the firm’s second pair of co-CEOs, with both having joined the company in 1996 and serving as co-presidents and co-chief operating officers since July 2017.
Since then, KKR had seen “significant growth” in operating performance, with assets under management, book value, and total distributable earnings doubling, and its stock price tripling along with “strong and differentiated” investment performance on behalf of its fund investors.
“We have spent virtually our entire careers at KKR because Henry and George are visionaries who not only shaped the business world but created a really special firm,” said Joe Bae and Scott Nuttall in a joint statement.
“We are fortunate to have learned from and been mentored and inspired by two of the world’s most innovative investors of all time.
“We could not be more proud of the firm’s mission and the people who undertake it and we look forward to working alongside Henry and George in the years ahead.”