KKR’s Kravis Says Buyout Firms Face More Regulation

[Joanne98]

Jan. 30 (Bloomberg) -- Henry Kravis, co-founder of New York-based buyout firm KKR & Co., said governments will increase regulation of his industry as they bail out the banking system.

“Regulation is coming, and it’s going to come in a very major way in our view,” he told a panel at the World Economic Forum in Davos, Switzerland, today. “We’ll get some regulation, there’s no question about it,” he said. “Will it go too far? It remains to be seen.”

Governments from the U.S. to the U.K. and Germany have increased scrutiny of buyout firms that led $1.5 trillion of debt-fueled takeovers between 2006 and 2007. In the U.K., executives including KKR’s Dominic Murphy appeared before lawmakers in 2007 to speak on whether buyout firms borrow too much, cut too many jobs and pay too little tax.

Regulators may target firms’ transparency and limit the amount of debt the firms can use to finance their acquisitions, Clayton, Dubilier & Rice Inc. Chief Executive Officer Donald Gogel said in a Bloomberg Television interview.

Firms like KKR, which opened in 1976 as a closely held firm answering to private investors and which rarely make public statements, must now speak out to influence the political debate, according to Josh Lerner, investment banking professor at Harvard Business School.

‘Shadow Realm’

“They existed in this shadow realm,” Lerner said in an interview in Davos. “It’s not surprising to see regulation. The major challenge for the industry is trying to shape the discussion.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHvsAIbcmEWs&refer=home

Kravis is a crook. He should be in prison!