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Capital Calls: KKR puts employees in deal terms

2 minute read

Trading information for KKR is displayed on a screen on the floor of the New York Stock Exchange in New York, August 23, 2018. REUTERS/Brendan McDermid

NEW YORK, May 6 (Reuters Breakingviews) - Concise insights on global finance.


UP WITH PEOPLE. Private equity isn’t known for having the backs of the rank and file. KKR (KKR.N), though, is trying. On Thursday, the investment firm run by Henry Kravis said it and rival Leonard Green & Partners will give 1,700 employees at Charter Next Generation, which it is buying, equity in the business.

More than 7,000 U.S. companies have some form of employee ownership, according to research organization Fifty by Fifty, less than 1% of all firms tracked by the U.S. Census Bureau. Since 2011, KKR has handed over $500 million in equity value to more than 20,000 employees.

That doesn’t necessarily mean they are all better off, though. A Harvard Business School study found that employment at buyout-targeted firms declined 13% over two years in deals involving publicly listed companies. KKR, along with Bain Capital, coughed up $20 million to help jobless workers at Toys R Us after it went belly-up. Now, with equity, employees have a stake in holding their owners more accountable, earlier. (By Jennifer Saba)

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