Succession Planning

1 May

Some companies seem to be led by one individual, where one or two executives so epitomize the face of the business that it is hard to imagine the business existing without them. There are quite a few businesses like this in private equity.  Companies Kohlberg Kravis Roberts, with Henry Kravis and George Roberts in the lead, or the Blackstone Group with Stephen Schwarzman in charge.  This issue is a particular problem for these companies in particular because the heads of these companies are growing older.  Already they are into their 60’s.  But they aren’t stepping aside any time soon.

 

What are their plans then?    At KKR, Kravis and Roberts presented a group of 15 different individuals at last year’s company investor day to show the investors the future of the company. Among the speakers: Scott Nuttall, 39, who oversees several of the company’s businesses and serves as a point person for the Wall Street community; Joseph Bae, 40, head of K.K.R. Asia: Marc Lipschultz, 43, who runs energy investments, and Alex Navab, 46, a senior buyout executive.

 

At Blackstone Group, Jonathan Gray has joined the company’s board, a clear signal that he is a possible successor to Mr. Schwarzman.  Gray has been with the company since he joined out of college and has just never left.

 

Signs are good that these companies will probably be around for quite a while.

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