After private equity titans George Roberts and Henry Kravis announced Monday they were stepping down from the firm they founded, some estate-planning experts predicted a stock sale might not be far behind.
The timing of their exit is significant given Kravis, 77, and Roberts, 78, are likely thinking about estate planning. As part of their planning, the pair could consider selling some of their stock, the experts said.
Given KKR stock is at an all-time high, there’s no time like the present, Blake Harris, an estate-planning attorney told The Post. “If they feel the stock is at a high point — and if they’re no longer co-CEOs — it may be easier to liquidate some of their funds from an optics vantage point,” he said.
Kravis is worth an estimated $8.6 billion; Roberts is worth an estimated $9.1 billion, according to Forbes.
Much like Leon Black — the former CEO of Apollo — neither man has ever sold a share of KKR stock, although they have donated some to charities over the years. The pair remain the top two largest KKR shareholders.
Even if the almost-octogenarians sell, analysts say fellow KKR shareholders needn’t fear a sharp drop. “I don’t think a stock sale would affect the price — it would be well-planned,” Thomas Hayes of Great Hill Capital told The Post. “These are shrewd guys that have taken company after company to the public market. They’d have large institutional buyers lined up.”
To be sure, the pair — who will stay on as co-executive chairmen — will still be subject to Securities and Exchange Commission regulations on the reporting of stock sales. Because each man owns more than 10 percent of the company, they’d be required to disclose stock sales even if they weren’t on the board.
Another reason they might start to cash out now: a possible increase in capital gains taxes on the horizon as part of the Democratic budget bill. “If I were them, I’d want to lock in a lower rate on capital gains,” Frank Agostino, an estate-planning lawyer told The Post. “Those are the conversations I’m having with my clients” about their own portfolios, he said.
In a statement to The Post, a KKR spokeswoman said it was “categorically wrong” to assert that Roberts and Kravis stepping down “has anything to do with potential share sales or anyone’s estate planning.”
“Henry and George, KKR’s single-largest shareholders and executive co-chairmen of the board of KKR, are and remain the biggest believers in the future of the firm they built,” the statement said.
Still, Chris Whalen of hedge fund Whalen Global Advisors said it would be “highly unusual” for founders to leave a public company and not sell at least some stock.
“People expect that when an executive retires … they’ll sell. It’s called estate planning.”
He said he didn’t expect any possible sale to affect the price of KKR’s stock, which is up more than 64 percent so far this year, compared to the broader market’s gains of around 17.5 percent.
If the men do decide to liquidate some of their KKR stock, they’d be in good company. The changes at the top of KKR come just days after a Bloomberg report said Apollo co-founder Josh Harris was liquidating his stock.
In a statement to The Post, a Harris spokesman said the sale was part of Harris’ estate planning.