KKR & Morgan Stanley Have Strong Ties

After reading about how Goldman Sachs and JP Morgan were left out of both the Blackstone and KKR IPOs, we decided to see what types of relationships KKR has with Morgan Stanley that prevented GS and JPM from getting a piece of the second PE IPO pie.  Alas, Morgan Stanley has some very strong ties with KKR, making it incredibly difficult (if not impossible) to win the mandate.  Below is the IntellectSpace Knowledge Map that we built:

http://nv.intellectspace.com/ispace/GuestMonitor.aspx?id=e043c74b-f543-4b1f-9f56-7bdc06644ce0

There are many noteworthy relationships in this IntellectSpace Knowledge Map.  To begin with, John Mack (Morgan Stanley's current Chairman and CEO) was a Director of KKR until as recently as April of 2005 (and may even still sit on KKR's board).  This relationship is strong enough to secure the deal, but in case it wasn't strong enough, take a look at the relationships surrounding Borden Capital.  Robert Kidder (a MS Board Member) was a founder of Borden Capital and served as Chairman and CEO from 1995 to 2003, and KKR Directors Henry Kravis, Brian Carroll, Clifton Robbins, and Adam Clammer (who also used to work in Morgan Stanley's M&A department) also sit on the Board of Borden Capital.  Henry Kravis is also a member of the Council on Foreign Relations, an organization where Laura Tyson (MS Board Member) is a Board Member.

Goldman and JP Morgan never had a fair shot at the deal - Morgan Stanley's relationships with KKR were just too strong.