KKR exec sees ‘next wave of greed’

The country is facing at least two more years of tough economic times, with no significant rebound for three-to-five years, said George Fisher, a senior adviser at New York private-equity firm Kohlberg Kravis Roberts & Co. “We will get through the current problems … but if I was betting, I would bet that we’re in for a couple of years of tough economic times,” he said, speaking at the 15th Annual Columbia Business School Private Equity & Venture Capital Conference in New York today. The stock market, however, may rebound sooner, with some “reasonable gains coming by yearend, Mr. Fisher said. He believes government stimulus programs are necessary to jumpstart the U.S. economy, but cautions that too much easy cash in the market could pose other problems. . “[Too much stimuli] will do some bad things that will sow the seeds of the next wave of greed and bad practices,” Mr. Fisher said. It was the flood of cheap money that triggered the current crisis, he noted. And he fears that dumping hundreds of billions of dollars of easy money into the economy now could plant the seeds for the next round of Wall Street greed. “When you put that much money that quickly into the system, you’re going to find some degree of abuse somewhere,” he said after the conference. Mr. Fisher believes the next wave could come as early as five years from now. KKR was a major player in the rush of merger and acquisition activity and leveraged buyouts that drove the markets in 2005 through 2007. Currently it owns 50 companies that generate $200 billion in sales, according to Mr. Fisher. He said his company and other private equity firms have gotten a bad image from a public relations perspective. “In Germany they described us as locusts,” he said. “I don’t think we’ve told our story accurately.” Looking ahead, Mr. Fisher said his firm is constantly looking for new deals. “Based on historic values, things are pretty attractive right now,” he said. “But the question you always have to worry about is in five-to-seven years, what are the IPO opportunities [going to be].” As a result, Mr. Fisher said his firm is being cautious on the deal front at the moment. “It’s slow right now – the credit markets have to loosen up,” he said. “You have a lack of buyers because they can’t get credit and you have a lack of sellers because they can’t get the prices they need.” However, Mr. Fisher quickly added, “we’re still doing deals.”