Henry Kravis is hoping that a little bit of Goldman Sachs’ trading sheen rubs off on him.
The private-equity titan announced yesterday that his KKR & Co. bagged a nine-person Goldman trading team led by Bob Howard.
The so-called proprietary traders are expected to help KKR expand its Wall Street footprint outside of the realm of its traditional private-equity business, which garnered the firm notoriety with its 1988 buyout of RJR Nabisco, as memorialized in Bryan Burrough’s “Barbarians at The Gate.”
Sources said KKR executives saw the hiring of the Howard team as an opportunity that “fell in their lap” as the 34-year-old firm planned on building out a number of its offerings.
In a statement, founders George Roberts and Kravis said the move “is part of a strategy.”
The hiring comes after Goldman was forced to disband its much-heralded trading operation in the wake of new regulations that ban banks from engaging in trading using the firm’s cash.
KKR is hoping to morph into something more like Goldman and Morgan Stanley than like a typical buyout shop.
Howard and his team will be situated in KKR’s asset-management arm, known internally as KAM, and are expected to launch a long-short style hedge fund starting next year.
The move follows similar buys by other PE shops like Carlyle, which is said to be eyeing hedge fund AlpInvest Partners, acquiring other hedge funds and other alternative investment platforms in order to withstand choppy waters when the PE market is facing a downturn.
“Our goal has been to add new capabilities and exceptional talent that allow us to strengthen our product offering and better service our clients,” Roberts and Kravis wrote in a joint statement.
A KKR spokesman declined to comment.
Howard and other prop traders have proven to be big revenue drivers over the years but Goldman and Morgan are having to adjust to the changing landscape of investment banking under new financial regulations.