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Thursday, May 30, 2024

Kravis-Long connection pays off for Guilford students

Like many rich people, iconic financier Henry Kravis wants to do something positive with his money beyond owning lots of houses and toys. For more than a decade, one of his main philanthropic efforts has been Sponsors for Educational Opportunity, or SEO Scholars. The nonprofit recruits underserved, low-income public school students and mentors them from ninth grade through college graduation, opening doors to unlimited opportunities.

After nine years as SEO Scholars’ board chair, Kravis has helped build a group that serves about 270 students in New York City and 125 in San Francisco. In March, it added 48 students in Guilford County public schools through a partnership with Greensboro’s Shift_ED program, which has a similar goal of boosting social mobility of low-income students.

Kravis obviously has impeccable New York and San Francisco connections. But Greensboro? How did that happen?

Bobby Long, Henry Kravis

There’s a simple answer: Kravis is close friends with Bobby Long, the investor and former benefits-company owner who quietly influences many notable projects in the Triad.

This week, Kravis visited Guilford County to raise money for ShiftED and SEO Scholars. He was interviewed by High Point University President Nido Qubein, who elicited some fascinating comments from the co-founder of Kohlberg Kravis Roberts, or KKR. Bloomberg estimates Kravis’ net worth around $10 billion.

Business North Carolina will publish excerpts from the Kravis interview in a future publication, while it will be broadcast on High Point University channels and on our website. (I’ll share a few highlights from Kravis’ interview below.)

After the Qubein interview, Kravis and his wife, Marie-Josee Drouin, joined Long and others for a fundraising dinner.

Henry Kravis

But Cisco stole the show with CEO Chuck Robbins announcing, via video, an $8 million grant for the Guilford County Shift_ED program. That should help boost the SEO Scholars enrollment to about 80 students within three years, while benefiting other local programs, says Shift_ED leader Wendy Poteat. It took much time and effort to attract the Cisco donation, she adds. It never hurts that Robbins has Tar Heel roots as a graduate of Rocky Mount High School and UNC Chapel Hill.

The scholars program is small, but 90% of its participants have earned degrees, mostly at Top 100 universities. Students commit to a rigorous study schedule, including frequent all-day Saturday instruction. In return, they receive impressive internships and scholarships.

So how did Kravis get to know Bobby Long, I asked? Long says he doesn’t recall, but calls it the “luckiest day of my life.”  Kravis says he believes he was introduced to Long by John Mack, the former CEO of Morgan Stanley who grew up in Iredell County.


Some comments from Kravis:

  • He and cousin George Roberts and friend Jerome Kohlberg started KKR with $120,000 in capital. It is now a public company with a market cap of $58 billion with 2,500 employees, 25 offices and $500 billion of assets under management.
  • His most famous deal, the takeover of Winston-Salem-based RJR Nabisco, created a  “little profit, but not a lot. It got more publicity than it should have.”
  • The book, “Barbarians at The Gate,” was about 85% accurate. The movie version was “lousy.”
  • KKR’s interest in RJR Nabisco stemmed from its poor management and wasteful spending, along with the profitability of tobacco products. The company had 11 jets when KKR took over.
  • A collaborative corporate culture is pivotal for companies to excel. KKR wanted to be a “we firm,” not an “I firm” like most Wall Street businesses that promote internal competition.
  • He worries that the declining quality of the U.S. education system at the K-12 level puts our democracy at risk, unless current trends reverse.
  • KKR expects a mild recession later this year, with GDP growth slowing to 1.5% this year and 0.5% in 2024.
  • He favors hiring students from “scrappy” schools — he named Purdue, Georgia Tech and High Point University — rather than Harvard, where he believes a sense of entitlement prevails.
David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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