Jerome Kohlberg Jr.
Jerome Kohlberg Jr. | |
|---|---|
| Born | 10 July 1925 New Rochelle, New York, U.S. |
| Died | 30 July 2015 (aged 90) |
| Occupation(s) | Entrepreneur, investor |
| Known for | Co-founder of Kohlberg Kravis Roberts & Co. and founder of Kohlberg & Company |
Jerome Kohlberg Jr. (July 10, 1925 – July 30, 2015) was a prominent American entrepreneur and investor, widely acknowledged as a trailblazer in the fields of private equity and leveraged buyout. He was a co-founder of the private equity firm Kohlberg Kravis Roberts & Co. and subsequently launched Kohlberg & Company.
Early life and education
Born into a Jewish household in New Rochelle, New York, Kohlberg served in the United States Navy during World War II. After his military service, he took advantage of the GI Bill to attend college. He obtained his bachelor's degree from Swarthmore College in 1946, then earned an M.B.A. from Harvard Business School, along with both an LL.B. and LL.M. from Columbia Law School. In 1986, he created the Philip Evans Scholarship Foundation at Swarthmore.
Kohlberg Kravis Roberts & Co.
In 1955, Kohlberg began working at Bear Stearns, where he led the corporate finance division. During the late 1960s and early 1970s, he collaborated with Bear Stearns executives to advise on several "bootstrap" acquisitions, including the landmark 1964 purchase of Orkin Exterminating Company, one of the earliest major leveraged buyout transactions. Other notable buyouts included Stern Metals (1965), Incom (1971), Cobblers Industries (1971), and Boren Clay (1973), primarily executed through Stern Metals. While many of these investments were profitable, the $27 million Cobblers deal ultimately resulted in bankruptcy. Together with Kravis and Roberts, Kohlberg established limited partnerships aimed at acquiring struggling companies or those with hidden financial value. Typically, KKR provided approximately ten percent of the purchase price, financing the remainder through high-yield bond issuance.
By 1976, disagreements arose with Bear Stearns leadership—particularly Cy Lewis, who opposed forming a dedicated investment fund and discouraged outside ventures—prompting Kohlberg, Kravis, and Roberts to depart and create Kohlberg Kravis Roberts. Early financial backers included the Hillman Family Group. Following revisions to ERISA regulations, KKR secured its first institutional fund in 1978, raising about $30 million in commitments.
Kohlberg & Company
Kohlberg left KKR in 1987 due to differing strategic views; he was against the large-scale buyouts and hostile takeover tactics preferred by Henry Kravis and George Roberts. Refocusing on smaller middle-market enterprises, he founded Kohlberg & Company that same year. By late 2007, Kohlberg & Company had accumulated six private equity funds with total investor commitments around $3.7 billion. The firm also managed debt funds through Katonah Debt Advisors and operated Kohlberg Capital (NASDAQ:KCAP), a publicly traded investment vehicle. Kohlberg retired from active management at Kohlberg & Company in 1994.
Jerome Kohlberg Jr. died of cancer on July 30, 2015, at age 90 on Martha’s Vineyard.
Philanthropy
Kohlberg contributed to charitable causes through the Kohlberg Foundation.
See also
External links
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- 1925 births
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