Henry Kravis Says the Market Is Wilder Than at Any Time in His Career
(Bloomberg) -- Henry Kravis said there’s more turmoil in the markets than any time in his half-century career as investors react to pandemic news.
“I’ve been investing for over 50 years, I don’t remember a time when I’ve seen such volatility as we see today,” Kravis, the co-founder of KKR & Co., said Friday on the Bloomberg Invest Talks webcast. “Just look at our markets in the U.S., we’re up one day 300, 400 points and then the next day, for almost no reason, we’re down 400 to 500 points.”
While he praised global stimulus efforts for keeping economies from collapse, he said markets remain unnerved by the Covid-19 pandemic, especially on the prospects for a vaccine. “Any news coming out of the pharmaceutical industry on progress with a therapeutic or with a vaccine is changing sympathy in the markets,” he said.
Stocks have been whipsawed this year, sinking into the fastest bear market on record in March before staging a rebound not seen in nine decades. The Cboe’s volatility gauge has averaged 33 since the end of February, 14 points higher than the average over the prior 30 years.
Wild swings were also a routine feature of the 2008 financial crisis. That year saw 42 days where the S&P 500 moved by more than 3%, compared with 28 days this year since the pandemic started roiling markets.
In the midst of such turbulence, New York-based KKR has been among the most active dealmakers. It has invested more than $40 billion across various strategies this year.
“When we shut down our offices in the U.S. on about March 12, I was wondering, ‘What are we going to do, how are we going to even keep busy?’” Kravis, 76, said. “As it turned out, we’ve probably had the busiest year and (most) productive year that we’ve had almost ever.”
Kravis has been making deals since he founded KKR in 1976 with Bear Stearns & Co. alums Jerome Kohlberg and his cousin George Roberts. Over the years, they’ve built a reputation as hard-charging capitalists and gained fame with transactions including the takeover of RJR Nabisco Inc. in the 1980s.
While buying and selling companies still drives Kravis, he said the pandemic has changed his outlook on life and work.
“You see so many people in the U.S., in New York City in particular earlier on, become ill and so many of them pass away,” he said. “It makes you think about what’s really important in life and to me, it’s family, my wife without a doubt.”
Beyond that, “I probably have become more patient than I was. I’ve always been known to be impatient,” he said. “Probably my empathy levels have gone up, and trying to show more empathy toward everybody that I come into contact with, people at our firm and make sure they are OK.”
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