KKR & Co. (KKR:US), the private-equity firm run by Henry Kravis and George Roberts, is poised to name former Morgan Stanley Chief Executive Officer John Mack as a senior adviser, according to a person with knowledge of the situation.
He will join a roster of former executives including former Caterpillar Inc. CEO James Owens and Bertelsmann AG’s former co- chairman Richard Sarnoff, who advise the firm on investments, said the person, who declined to be identified before an announcement that may come as soon as today.
Leveraged buyout firms such as KKR are adding to their financial-services teams as they seek to purchase businesses from banks under pressure by regulators and markets to offload assets in the wake of the financial crisis.
Mack, whose reputation for swift cost cutting earned him the nickname “Mack the Knife,” stepped down as chairman of Morgan Stanley (MS:US) at the end of last year, two years after leaving the CEO role he held at the Wall Street bank from 2005 to 2010. He boosted businesses including trading, private equity and mortgages, a strategy that backfired when the bank posted its first quarterly loss in 2007 on the eve of the financial crisis.
KKR officials declined to comment.
Morgan Stanley sold stakes to China Investment Corp. and Japanese bank Mitsubishi UFJ Financial Group to raise capital and converted to a bank in 2008. The New York-based firm also took $107 billion of Federal Reserve emergency loans, more than any other firm, during the crisis.
KKR said last month it has amassed $6 billion for its next buyout fund focused on North America. The firm is targeting $10 billion for the buyout fund.
Buyout firms such as KKR typically use loans secured on the targets they acquire to finance more than half of the purchase price and cash from their own funds for the rest. The firms seek to improve performance at the companies they acquire or expand them before selling them within about five years.
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