Investment firm KKR has long been one of the preferred exits for bankers looking to leave M&A and capital markets jobs for private equity. But as junior bankers queue to join, there are signs that KKR's requirements might be changing.
Speaking last month to Alison Mass, chairman of Goldman Sachs' investment banking division, Joe Bae, co-KKR chief executive (and a former Goldman Sachs analyst), said the firm is "hiring many, many more people every year, especially young people," but that unlike the past, many of them are coming directly from college. "Today, we get resumes from over 100 colleges in the US," said Bae. "Technology has been a game changer in our ability to go find that talent all across the United States, not just in the northeast or at the Ivy Leagues." 50% of the juniors KKR recruits are women.
Junior bankers still have a place. LinkedIn offers some insights into KKR's most recent crop of banker hires. In London, they include Astrid Palmstierna, who previously spent 19 months on the EMEA media and communications investment banking team at Morgan Stanley, Lu Li, a former Goldman analyst in Frankfurt, or Habib Salihijo Ahmad, a former associate at Goldman Sachs. In New York, there's Martina Starc, another former Morgan Stanley analyst, or Caroline McQuiston, a former associate from Bank of America.
KKR's future recruits may need particular sector-focused experience, though. As inflation rises and leveraged deals become harder to finance, some industry sectors are expected to offer better returns than others. Bae said KKR is, "looking for businesses that are very resilient that have pricing power, that are not price takers in the marketplace." He said a few sectors fit this description, including food safety and ESG.
However, it's infrastructure jobs that Bae is really excited about. "When you think about yield in this kind of low interest rate environment, when you think about assets that really have inflation protection, that's infrastructure," Bae told Mass. "You think about fiber. You think about data centers. You think about towers." Private equity will also play a huge role in decarbonizing the economy by investing in renewables like solar and wind, said Bae.
The implication is that anyone with experience in ESG or infrastructure will be popular at KKR in the future. Indeed, and unsurprisingly, many of this year's hires have sustainable investing backgrounds or come from Impact investing funds at the likes of Blackstone
Although KKR is increasing its focus on sustainability, it still pays inordinately well. Its filing for the first quarter of 2022 describes how staff are compensated in the form of salary, equity-based compensation, cash bonuses and carried interest. In the first quarter of this year alone $3.1bn was added to the carried interest pool, which is a lot - especially considering that KKR only employs 2,000 people, of whom just 650 are carry-eligible investment professionals.
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