- Biggest shake-up in unit’s leadership since 2008
- Goal to simplify firm’s management structure
- “Putting one of our best players back on the field”
The move is the biggest shake-up in the leadership of KKR’s private equity business in the United States since it promoted Michelson and Navab to co-heads of its North American private equity business in 2008, sister news service Reuters reported.
Michelson had previously headed KKR’s North American healthcare team, while Navab led the firm’s North American media and communications team, a role he has kept.
“This is about putting one of our best players back on the field,” a KKR spokeswoman said about Michelson when contacted by Reuters, declining to comment further on the change.
Michelson, 61, joined KKR in 1981 from law firm Latham & Watkins LLP, five years after cousins Henry Kravis and George Roberts founded the New York-based firm alongside Jerome Kohlberg Jr.
Michelson played a key role in some of KKR’s biggest deals, including the $32.1 billion acquisition of hospital operator HCA Holdings Inc in 2006 and the $11.4 billion takeover of orthopedic products maker Biomet Inc in 2007.
In a memo sent to KKR private equity fund investors in May and obtained by Reuters, Kravis and Roberts wrote that they believed the change would simplify KKR’s management structure and enhance its focus on performance and innovative investing.
Michelson will now focus on sourcing deals and oversee the performance of KKR’s companies. He will continue to sit on KKR’s North American private equity investment committee, portfolio management committee and management committee. He serves on the boards of directors of HCA and Biomet.
Navab, 48, joined KKR in 1993 and is seen as a possible successor to co-chief executives Kravis and Roberts, both aged 70. Other senior leaders in the firm that are viewed as potential successors include Scott Nuttall, who is head of KKR’s global capital and asset management group, and Joseph Bae, who is managing partner of KKR Asia.
KKR’s new approach to the leadership of its Americas private equity team contrasts with that of its peer The Carlyle Group LP, which has co-heads for most of its businesses. Carlyle’s U.S. private equity team is co-led by Allan Holt and Peter Clare.
KKR had $60.5 billion in buyout funds and other private funds as of the end of March, accounting for 59 percent of the firm’s assets under management.
Its investment portfolio of more than 90 companies includes sporting goods retailer Academy Sports + Outdoors, Internet domain name registration company Go Daddy, and toy store chain Toys “R” Us Inc.
KKR has returned about $12 billion to its private equity fund investors from its North American portfolios since 2012, and its latest $9 billion North America fund has committed or invested more than 45 percent of its capital since it started investing in November 2012, according to the memo.
Greg Roumeliotis is a correspondent for Reuters in New York.