During the succeeding decades, our investment activities would expand considerably, and not just in terms of the creativity and complexity of individual transactions. Our partnership reached into a number of new industries and geographies, including building a business platform in Europe, and investing considerable time and expense developing the knowledge and relationships to acquire companies in complex, public-facing, highly regulated industries such as banking, insurance, and power generation and transmission.
As part of our entry into new regions of the world, we matched up experienced and well-connected investors and operators in a local geography with our existing network of experts. KKR’s people acted as “culture-carriers” of the firm, bringing our own industry knowledge and process rigor to complement the skills of our local partners.
We also launched a comprehensive program to improve the operations of our portfolio companies. We re-organized our investment professionals according to industry – charging them to become experts in their fields. In many cases, our teams spent years getting to know companies to determine their capital and operational needs and how we could help them. Our teams’ depth of knowledge also helped improve the teams’ oversight of portfolio company performance.
We also began recruiting people with a broader range of operational skills. We developed a dedicated resource called KKR Capstone that focuses exclusively on driving operational improvements within our portfolio companies. This team focuses its expertise on critical areas of operation, such as new product development, sales-force effectiveness, and manufacturing excellence.
At the same time, KKR refined and enhanced our investment processes, including establishing an Investment Committee and Portfolio Management Committee that comprise our most senior executives. Having learned that the most important time in any investment often occurs right after the deal closes, we developed a 100-day planning model. This new approach brought command focus to our portfolio companies from the moment we make an investment, as well as regular review of key performance metrics.