Petraeus ‘All In’ for Private Equity?


Photograph by Ken Cedeno/Bloomberg

Retired Army General David Petraeus, pictured as the top U.S. commander in Iraq, in 2007. Photo by Ken Cedeno / Bloomberg

KKR & Co.  the private-equity firm run by Henry Kravis and George Roberts, is in discussions with former Central Intelligence Agency Director David Petraeus about a role at the company, according to a person with knowledge of the talks.

It hasn’t been decided yet what role he would have at KKR, said the person, who requested anonymity because the discussions are private. Petraeus and Kravis are friends and talk often, according to the person.

Petraeus, 60, resigned from the CIA on Nov. 9 after a probe by the Federal Bureau of Investigation uncovered evidence of an extramarital affair with Paula Broadwell, the author of a biography about the former commander of U.S. military forces in Afghanistan and Iraq entitled “All In.” Last week, City University of New York named Petraeus a visiting professor starting Aug. 1.

Kristi Huller, a spokeswoman for New York-based KKR, declined to comment on the possible hiring. Robert Barnett, a lawyer for Petraeus, didn’t respond to an e-mail requesting comment.

KKR has more than 25 senior advisers, who help the firm find and evaluate investment opportunities, according to its website. Some of them advise KKR-owned companies or serve on their boards.

The firm last year named former Morgan Stanley Chief Executive Officer John Mack as a senior adviser to help make KKR “smarter investors,” Kravis said at the time. Other KKR advisers include Honeywell International Inc. (HON) CEO David Cote, former Caterpillar Inc. CEO James Owens and Qantas Airways Ltd. Chairman Leigh Clifford.

Private-equity firms pool money from investors including pension plans and endowments with a mandate to buy companies within about five to six years, then sell them and return the funds with a profit after about 10 years. The firms, which use debt to finance the deals and amplify returns, typically charge an annual management fee equal to 1.5 percent to 2 percent of committed funds and keep 20 percent of profit from investments.

Kravis, Roberts and their partner Jerome Kohlberg Jr. started KKR in 1976, joining a small group of firms doing leveraged buyouts. Kohlberg left the firm in 1987. Today the industry manages about $3 trillion of assets, according to research firm Preqin Ltd. KKR oversees $78 billion, investing in buyouts, energy, real estate and hedge funds.

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