Kohlberg Kravis Roberts (KKR): Responsible Investing
In the world of private equity and leveraged buyouts, it is easy to lose sight of the social, economic, and environmental impacts of large-scale investments. When entire industries are involved, the stakes are higher, not only for the companies involved, but for society and the environment as a whole. Kohlberg Kravis Roberts & Co., since its founding by Henry Kravis, George Roberts, and Jerome Kohlberg, has always considered its core philosophy to be that people can accomplish great things when they work together and their interests are aligned. This core philosophy directly influences the way KKR invests.
KKR prides itself on its ability to create value for its stakeholders. Whenever KKR enters into an investment agreement with another company, Kohlberg Kravis Roberts commits to helping that company grow and thrive even after the initial deal is done. KKR has rescued many failing companies in the past. For instance, Toys R Us, the largest US retail chain that sells children's toys, came upon hard times from 1999 to 2004. The company was plagued by shipments of defective toys that were tainted with lead paint. As a result, sales quickly declined. The company lost over 16,000 jobs. When KKR invested in Toys R Us, Toys R Us was able to open 45 new stores across the United States, increase employment by 22%, and increased capital spending by 40%. This turnaround for the company is one testament to KKR's value-conscious approach to investing.
Kohlberg Kravis Roberts is also concerned about the environment and the increasing damage wrought by industrial processes. On May 1, 2008, a joint project between KKR and the Environmental Defense Fund (EDF) was announced. Dubbed the "Green Portfolio Project," it marks a significant first in the history of both Kohlberg Kravis Roberts and the EDF. The on-going project aims to study the environmental effects of the operations of various KKR portfolio companies. The results of the study will then be used to implement more environment-friendly operations.
Aside from social and environmental consciousness, KKR values transparency in its operations. Because of the huge amounts of finances and revenues that go into each investment, it is of the utmost importance that all details of all transactions be completely and honestly disclosed.
Overall, KKR and its responsible actions are proof of the fact that one can make money and make the world a better place at the same time.