Private Equity Briefcase

November 29, 2007

Putting It To Good Use

Private equity executives are often maligned in the media as a self-interested, greedy bunch, ala the Gordon Gekko character in the 1987 film "Wall Street."

Given the lavish lifestyles some high-profile buyout executives live, hiring rock stars to play at their birthday parties, who can blame the comparison? Moreover, there certainly can’t be much disagreement over the idea that buyout groups exist to make money and execute tough decisions that can result in job losses in portfolio companies. Hence, the philanthropic gifts wealthy private equity executives bestow upon society are easy to overlook.

Take, for instance, the recent contribution by Jerome Kohlberg, one of America’s buyout industry titans. A former World War II veteran who’s established two buyout firms—Kohlberg Kravis Roberts, which he co-founded alongside Henry Kravis and George Roberts, and Kohlberg & Co.—Kohlberg’s support for American soldiers returning from Afghanistan and Iraq is particularly admirable. Besides voicing his concerns for the well-being of returning post-war soldiers, the 82-year- old retired dealmaker (ranked #317 on this year’s Forbes annual 400 wealthiest individuals list) has gone one step further. He’s put his money where his mouth is.

As New York Newsday reported this week, Kohlberg has taken $4 million and established the Fund for Veterans Education, giving two veterans in every US state the right to receive scholarships. It’s a move that will help shore up the pockets of active duty GI’s returning from deployment who now receive a maximum $1,101 post-war payment under the Montgomery GI Bill.

“We can't ignore this. It's very difficult, the entrance back to civilian life,” Kohlberg told Newsday. “The best thing we can do, not only for the veterans but for our country, is to help these men and women get an education."

Kohlberg may’ve slashed his share of jobs at portfolio companies during his career of buyout investing. But, his contribution to the nation’s military vets is simply one contribution that shouldn’t be ignored, especially since, as Kohlberg notes, today’s veterans will form the future backbone of the US citizenry.