William Sonneborn, the 43-year-old head of KKR & Co. (KKR:US)’s credit investment business, is retiring after almost five years at the firm.
Sonneborn will step down tomorrow as head of KKR Asset Management, known as KAM, and chief executive officer of KKR Financial Holdings LLC (KFN:US), a publicly traded subsidiary known as KFN, according to a regulatory filing today. Craig Farr, the head of KKR’s capital markets business, will replace him.
Sonneborn plans to pursue a new challenge, Kristi Huller, a spokeswoman for the New York-based company, said in an e-mail. He will become a senior adviser to KKR in October, Huller said.
Sonneborn helped triple KKR’s public-markets businesses to $12.3 billion in fee-paying assets as of the first quarter from $4.1 billion in 2008, when KKR co-founders Henry Kravis and George Roberts hired him from TCW Group Inc. to run KAM. Based in KKR’s San Francisco offices, KAM was started in 2004 to broaden KKR’s business beyond leveraged buyouts and into public investments such as equity hedge funds; leveraged credit strategies such as high-yield bonds; and alternative credit offerings such as mezzanine lending.
“He took the reins in December 2008 during the most challenging of environments with the credit crisis in full swing,” KFN Chairman Paul Hazen said in the filing. “Under Bill’s exceptional leadership, the company’s share price has increased 15 times in under five years. While we are disappointed in Bill’s decision, we are grateful for all of his contributions.”
KFN fell (KFN:US) to as low as $10.75 after regular trading, after closing at $11 in New York. The shares have gained about 4.2 percent this year.
Sonneborn was introduced to KKR in early 2008 through Scott Nuttall, a deputy of Kravis and Roberts who runs the global capital and asset-management group, which includes KAM. Nuttall was exploring an employee buyout of Los Angeles-based TCW, where Sonneborn was president and chief operating officer. Nuttall, who decided against the buyout, introduced Sonneborn to Kravis and invited him to the firm’s annual meeting a few weeks later, where he met Roberts, according to an account in Jason Kelly’s “The New Tycoons” (Bloomberg Press/John Wiley & Sons Inc. (A:US), 256 pages, $22.96).
He previously worked at Goldman Sachs Group Inc. (GS:US) for six years in New York and Hong Kong, focused on mergers and acquisitions.
Farr, 41, joined KKR in 2006 from Citigroup Inc. (C:US), where we has co-head of North American equity capital markets. Since then, KKR’s capital-markets business -- which over the past two years accounted for 30 percent of KKR’s fee-related earnings -- has grown to 39 deal makers, who arrange financing for transactions and underwrite stock and bond offerings.
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