A Private Equity Pioneer Thrives in the Shadows

The modern private equity industry was born in the 1970s at Bear Stearns, where Jerome Kohlberg started financing acquisitions with borrowed money, using the assets of the target company as collateral. Kohlberg struck out on his own in 1976 and, along with two other Bear Stearns alums, Henry Kravis and George Roberts, founded the firm that became KKR. A few months later, another Bear Stearns banker, Gerry Schwartz, left and took the strategy home to Canada. “I’d always felt like a Canadian living in the U.S.,” Schwartz says in his Toronto office. “I wanted to come back here.”