side effects of the drug

In an interview with Ainslie Chandler for Bloomberg Brief, Ken Mehlman explains KKR’s commitment to ESG and how it builds these considerations into its investment process by identifying new opportunities to invest, achieving double bottom-line benefits and de-risking companies. Mehlman discusses the process KKR uses to evaluate investments from an ESG perspective and the impact some of those investments have made in the lives of many people. Mehlman also shares insights about what the future holds for KKR and what could be their next big ESG investment.

Mehlman describes the process of KKR’s engagement on ESG issues as “very rigorous.” He explains that the potential company’s “protocol, their processes, their culture, their commitment—[are] examined both in terms of ‘where is the problem?’ but also ‘what can we do to make it better during the course of our ownership?’” The purpose of KKR’s ESG investment is not only to make a smart deal that will yield profit, but also to identify investments with an opportunity to improve the world.

KKR has already invested $5 billion globally for companies committed to ESG missions, Mehlman said. Those investments all have different faces: “We have done a fair bit of investing in food safety in China—starting in dairy and now in chicken and pork,” he said. “We have also invested a lot in water and renewable energy…We’ve done an investment in China in water cleanliness.”

“We expect to invest more in challenges or solutions related to water scarcity,” he added.

When asked about what issues today affect global companies, Mehlman answered that the firm is interested in how companies handle the privacy and protection of their customers. This issue has been highlighted by recent data breaches, he said.

In his opinion, Ken Mehlman does not feel that companies should ever have to choose between ESG best practices and profit. Mehlman explains that “returns are in ESG.” Speaking of an investment by KKR that allowed millions of people to receive adequate retirement pensions, Mehlman said, “The world will only be saved at a profit and the only way you are going to make a profit today is to understand the world. ESG can help you do both.”

Private equity firm Kohlberg, Kravis, and Roberts announced on August 12th that its employees now have the option to bring new children and their caregivers on business trips for up to a year after the child is born, paid for by KKR. Additionally, KKR expanded the leave time it offers to new parents.

KKR is aiming to change the demographic landscape of private equity, where nine out of ten senior managers are men. Women hold 16% of senior positions in investment management according to Catalyst, a nonprofit group.

This year, according to Bloomberg, KKR assembled a council in charge of devising ways to expand the firm’s appeal to “women, minorities, gays and lesbians, who traditionally haven’t entered asset management in large numbers.”

KKR is one of the companies at the forefront of expanding the options available to new fathers and mothers. According to the New York Times, the firm joins companies such as Yahoo, Microsoft, Netflix, IBM, and Goldman Sachs, which have begun offering various maternity benefits.

Such benefits include varying amounts of expanded paid leave, travel accommodations for new parents, and the option to ship breast milk home when away on business, paid for by the company. These companies are expanding their benefits in order to attract and retain talented employees.

Ken Mehlman is quoted in Bloomberg, saying:

“The best and the brightest of the future don’t look like the best and the brightest of the past,” said Ken Mehlman, a KKR partner and former chairman of the Republican National Committee. “This is a necessary first step. I hope the whole industry improves and we all learn together.”

Co-founder George R. Roberts echoes this sentiment, telling Bloomberg:

“Too many same people means too much same thinking,” Roberts, 71, said in an interview. “We found that people were hiring people like themselves. If you want to stifle innovation, if you want to stifle diverse thinking, if you want to stifle creativity, then just keep hiring people like yourself.”

Executives at KKR have made progress over the last three years in addressing the gender gap—statistics from Bloomberg indicate the gender gap at KKR has improved by 7.3%, the highest of all the private equity firms surveyed. While there is still more progress to be made, KKR is on the right track.

As the New York Times reports, Kohlberg Kravis Roberts has started posting on Twitter.  As of May 1st, which is also the 38th anniversary of KKR’s founding, the private equity giant began posting on the social media channel.

Not only will the move to start posting on Twitter open up another channel of communication, but it will also add more transparency.

“For the past several years, we’ve tried to be more transparent about our business and engage more with our investors and key stakeholders for K.K.R. and the companies in which we invest,” Ken Mehlman, a partner and the global head of public affairs at K.K.R., said in a statement. “We hope that Twitter provides another outlet for this conversation. We’ll use it to share news about our firm and perspectives on key issues impacting investing around the world.”

So far tweets have highlighted some of the volunteer work that KKR employees have done in their community, including 40 employees who helped to beautify Bryant Hill Community Garden in the South Bronx for Earth Day.

Other tweets included information on KKR’s partnership with the Environmental Defense Fund as part of their Green Portfolio, as well as information about the 2014 Ceres Conference and an app that the KKR Global Macro and Asset Allocation Team has put out around KKR Insights that provides access to reports and commentary from Henry McVey, KKR’s Head of Global Macro and Asset Allocation, focused on major trends impacting the economic and investing landscape.

 

Out on the Street recently expanded to form Out Leadership, a model for collaboration across industry lines in order to help develop initiatives in the future that help support and leverage LGBT opportunities.  This new project brings together leaders throughout the business world, including top executives and senior leaders in financial services, law, and insurance fields.  Together they will work  to develop programs and initiatives that can help to impact businesses and drive LGBT equality forward.

Ken Mehlman is a member of the Out on the Street Leadership committee, and has been since 2011.  As he puts it, “Out Leadership will help members succeed while making a positive impact. It will help smart businesses share effective tools to recruit and retain the best talent and enhance true meritocracy throughout our firms and society.”  Ken Mehlman is a Member and Global Head of Public Affairs at KKR, which is one of Out on the Street’s 2014 member firms.  Other 2014 member firms includeBarclays, Bloomberg, Citi, Credit Suisse, Deutsche Bank, Ernst & Young, KPMG, Moody’s, Morgan Stanley, Nomura, Prudential Investment Management, RBC Wealth Management, RBS, UBS, Vestar Capital Partners and Wells Fargo.

Out Leadership was founded by Todd Sears, a former investment banker and diversity leader, and he focuses on the idea that LGBT inclusion and business diversity is a boon for businesses, driving success in a new way.

The group plans to launch two additional industry verticals later this year that will be organized by Out Leadership: Out in Law and Out in Insurance.  Out in Law will host its inaugural summit in March in New York.

Both of these programs plan to develop business-focused dialog in the law and insurance fields, and all of these programs will work together to develop ideas and programs that are cross-industry. One such program will be the OutNEXT Emerging Leaders program, which Out Leadership has already begun and which will work to create opportunities for LGBt leaders in New York, London, and Hong Kong.

 

Ken Mehlman is the new face of Private Equity Growth Capital Council after he was elected Chairman of the Council’s Board of Directors.

With more than two decades of political and corporate experience, Ken Mehlman will help expand the PEGCC’s outreach and education efforts to engage stakeholders about the value of private equity. Mehlman will succeed Mark Tresnowski, the Managing Director and General Counsel at Madison Dearborn Partners.

“I’m privileged to succeed Mark as Chairman of the PEGCC,” said Ken Mehlman in a statement from Private Equity Growth Capital Council. “I have enormous respect for the PEGCC’s important work engaging with public policy makers to encourage more economic growth and retirement security for millions of Americans.”

Some of Ken Mehlman’s primary responsibilities will include engaging with lawmakers and discussing the positive light on the leveraged buyout industry.

Kenneth Mehlman has been with Kohlberg Kravis Roberts since 2008 where he now serves as Global Head of Public Affairs and oversees all external affairs, policy risk assessments and other opportunities. Mr. Mehlman also serves on the Robin Hood Foundation Veterans Advisory Board, the Council on Foreign Relations and is a trustee at Mt. Sinai Hospital of New York. As a former environmental lawyer, Ken Mehlman also heads KKR’s environmental social governance program, which has helped to curb greenhouse gas emissions and energy use at the firm’s different locations.

Before joining KKR, Ken Mehlman was a central figure in the 2004 election, managing George W. Bush’s presidential re-election campaign, while serving as the Chairman of the Republican National Committee. He famously came out as gay in 2010 and has since worked with Republican leaders and members of Congress to embrace civil marriage, freedom and liberty for same-sex couples. Ken Mehlman most recently worked with advocates in Maine to retool their advertising, which led to voters approving same-sex marriage in December 2012.

Ken Mehlman is excited for the opportunity to affect positive economic growth and said he shares the PEGCC’s goal of building a community of investors who “seek superior returns while also emphasizing active, responsible governance, long term investment and measuring success in years not quarters.”

Ken Mehlman sat down with Cristina Alesci for Super Return TV in Boston to discuss different aspects of private equity, operational expertise, and General David Petraeus joining KKR.

 

Cristina Alesci: Let’s start on what you just spoke about on the panel, and this idea that private equity firms are using more and more operational expertise to generate returns and improve businesses. We’ve heard that a lot from other firms as well, what makes KKR different?

 

Ken Mehlman: Well I think that one of differences we bring to the table is we have 60 in our firm who are operational experts. One gentlemen is an expert at Lean Six Sigma, someone else is an expert in purchasing…and these 60 people go into the company, typically for an 18-24 month period, and focus with that company on the specific area we think that that company can be operationally enhanced…So when we’re looking at a company, we sit down with our investment committee. We say, “What’s our thesis? What do we do to make this company better?” A huge part of that in many cases is, we operated better, we operated in a more affective way, and operated to grow.

 

Cristina Alesci: Why the focus on operations – why does it seem to be the hot topic?

 

Ken Mehlman: The private equity industry is first and foremost about solving problems for companies and how we can make them better. Operational focus takes this alignment to the next level.

 

Cristina Alesci: KKR just announced that it is going to start a formal relationship with General Petraeus.

 

Ken Mehlman: General Petraeus will lead an effort called the KKR Global Institute, and what that effort will do is build on the work that my colleague Henry McVey and I have tried to do over the last 5 years. Which is to help us understand macroeconomic, geopolitical, governance, environmental, regulatory, external factors that in today’s world are really important to the success of an investment or the failure of an investment, and are really important to helping our companies do even better and be better citizens.

 

Watch the video here to see Ken Mehlman’s entire interview.     

 

 

It was announced on May 30, 2013 that General David Petraeus will be joining the team at Kohlberg Kravis Roberts as the Chairman of the newly created KKR Global Institute where he will work closely with Ken Mehlman and Henry McVey.

With the new role of central banks after the financial crisis, new regulations and major changes in public policy, KKR has increased in the areas of social, environmental and governance issues. The KKR Global Institute will be the company’s way to focus on these issues and help the company to expand globally.

“KKR is one of the best investment firms in the world,” General Petraeus stated. “I am very pleased to join such a great team. I have watched KKR evolve as it adapted to the post-financial crisis world and became a go-to partner for companies worldwide. I look forward to supporting the investment teams in their pursuit of the best opportunities for clients and also being a part of a new initiative to provide additional insights to KKR’s clients and companies.”

General Petraeus will be working very closely with Ken Mehlman, Global Head of Public Affairs and Henry McVey, Global Head of Macro & Asset Allocation.

Ken Mehlman was a key part of establishing the KKR Global Institute. He stated that, “For 37 years, KKR has produced strong returns for our investors by marrying deep industry knowledge with active ownership and a long-term focus. Over the last five years, KKR has established and systematized our focus on stakeholder engagement and macro-economic and geopolitical factors. These considerations are now built into our investment and portfolio management processes and with this new initiative and additional talent, we will take it to the next level.”

Ken Mehlman works as the head of the Global Public Affairs team at KKR, and he used his position of authority wisely when speaking with the American Federation of Teachers this past week.

When KKR found out that the AFT had included the company on a list of money managers that the union says solicit investment business from pension plans while also supporting think tanks and advocacy groups that seek to undermine pensions, they were not too happy. “Over the past several years, we have worked, in partnership with legislators, policy makers and organized labor leaders, to advocate the importance of defined benefit plans as an option for public sector workers.” Ken Mehlman said in a letter to teachers’ union president Randi Weingarten. Mehlman also noted that he has worked with Service Employees International Union president Andy Stern, “to ensure that policy makers have the facts…on the importance of a defined benefit option for public sector workers.”

After receiving this letter on Wednesday, Weingarten stated that, “Your firm has taken an important step in declaring its support for defined benefit plans and retirement security.” Weingarten also said that the union would take KKR’s name off of their list.

The past year has seen private equity companies becoming far more public than ever before. With former private equity Republican presidential candidate Mitt Romney in the spotlight, countless remarks, ads, and campaigns were pointed in their direction.

But Ken Mehlman has spent the past year keeping that fire under control. As the Global Head of Public Affairs for KKR, previous head of the RNC, and President G.W. Bush’s campaign manager, he knows how to get a message out to the public.

 

Private equity firms don’t traditionally like to share any information with the public or the media about operations or any specifics, and that has caused a number of misconceptions to arise. By working with the Private Equity Growth Capital Council (PEGCC), Ken Mehlman has successfully spearheaded the movement to get that information out there.

 

“Private equity is no longer private,” he says of the recent limelight the industry has been receiving in a piece with Fortune Magazine.

 

One of the misconceptions he’s working to overcome is that private equity is a heartless firm, when in fact they often pay close attention to what people want and need. “You can’t invest in large businesses around the world today unless you are willing to help provide a thorough understanding of who you really are, and engage around issues that affect things like the environment, workers, and local communities.”

 

Another thing to remember, Mehlman says, is that private equity provides a nice boost to the economy, taking bigger risks than most companies and therefore seeing a bigger return. By doing so, they are able to turn struggling companies around, rather than letting them fail. They can provide valuable resources and training to portfolio companies as well.

 

Ken Mehlman has been the leading influencer for getting PEGCC to the successful point it is at today. He provided a vision and helped the movement of taking a traditionally guarded industry and making it visible and transparent to the American public.