Jerome Kohlberg, Jr. facts for kids
Jerome Kohlberg, Jr. (born July 10, 1925 – died July 30, 2015) was an American businessman. He was a very important person in starting the private equity and leveraged buyout industries. He helped create two big companies: Kohlberg Kravis Roberts & Co. and later Kohlberg & Company.
Kohlberg, Jr. passed away in Martha's Vineyard, Massachusetts. He was 90 years old and died from cancer.
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Who Was Jerome Kohlberg, Jr.?
Jerome Kohlberg, Jr. was a smart and successful businessman. He is known for being one of the first people to really develop a new way of investing money. This new way is called "private equity."
What is Private Equity?
Imagine a company that is not listed on the stock market. This means you can't buy its shares easily like you can with big companies like Apple or Google. Private equity is when investors, like Jerome Kohlberg, Jr., buy these private companies. They often buy a large part of the company or even the whole thing.
How Does Private Equity Work?
The goal of private equity is to make the company better and more valuable. The investors might help the company grow, become more efficient, or even change its business plan. After a few years, if the company is doing much better, the investors might sell it. They could sell it to another company or make it public on the stock market. If they sell it for more than they paid, they make a profit.
What is a Leveraged Buyout?
A "leveraged buyout" is a special kind of private equity deal. It means buying a company mostly with borrowed money. Think of it like buying a house with a mortgage. You put down some of your own money, but most of the money comes from a loan.
How Leveraged Buyouts Help Companies
In a leveraged buyout, the company being bought often takes on the debt. This can be risky, but if the company grows and makes more money, it can pay back the loan. This method allowed Kohlberg and his partners to make very large deals and buy big companies.
Starting Big Companies
Jerome Kohlberg, Jr. was a founder of two very important companies in the world of finance.
Kohlberg Kravis Roberts & Co.
In 1976, Jerome Kohlberg, Jr. co-founded Kohlberg Kravis Roberts & Co., often called KKR. This company became one of the most famous and successful private equity firms in the world. They bought many well-known companies and helped them grow.
Kohlberg & Company
Later, Jerome Kohlberg, Jr. started another company called Kohlberg & Company. He continued his work in private equity, focusing on helping businesses improve and succeed.
His Legacy and Impact
Jerome Kohlberg, Jr. changed the way many businesses are bought and sold. He helped create a whole new industry that invests in companies and helps them grow. His work has had a lasting impact on the financial world.
