Private equity firms aren't doing enough to bolster the industry's reputation, according to one of its most prominent executives.
Kohlberg Kravis Roberts co-founder Henry Kravis told the SuperReturn International conference in Berlin yesterday that "we've done a lousy job of telling our story. People think private equity is hedge funds. We have not done a good job as an industry."
Kravis did his best to argue that p.e. is neither a synonym for hedge funds nor the corporate raiders of yore.
"This is not a game of financial engineering," he said. Private equity firms need "a proper capital structure to invest in a business," and that loading debt onto portfolio companies "ain't gonna work." And he complained that banks are not helping the situation, offering leverage beyond "levels of safety" for U.S. buyouts.
The 70-year-old also assured the audience that neither he nor his cousin and co-CEO, George Roberts, were going anywhere.
"I love what I'm doing, George loves what he's doing," he said, adding that they plan to lead KKR as long as they are "healthy and having fun and our partners don't kick us out."