Ken Mehlman of KKR on the fiscal cliff on the Deal Pipeline
Channel: Ryan Boucher
Date: 2012-12-14

Ken Mehlman, of KRR, interviewed by Debra Borchardt of The Street about how to do business in the face of the fiscal cliff.

Transcription:

Debra Borchardt: What's the one thing that you guys are focused on, clearly it's a big complicated deal, but what's the one thing that KKR has their eye on?

Ken Mehlman: Well, you know, our approach typically has been that we think a little bit longer term.  We are certainly paying a lot of attention to this right now.  But what we're looking at at the moment and what we have always looked at is, fundamentally, what are companies that we have confidence in?  Companies that are defensively positioned for example.  Companies that are poised for growth.  Companies that, depending on the kind of investment that they're looking at, we can help those companies either just through capital or, in the case of private equity and some of our private markets we can both provide capital but also help those companies improve operationally or grow into new markets.  

Ken Mehlman: We have found over the years that time like this are actually the best time to invest. If you look back historically at our track record, the periods where there was economic volatility and economic dislocation, we made some of our best investments.  So we think that this is actually a good time to invest if you focus on the fundamentals.  It doesn't meant that you don't need to pay attention to these other issues, but the fundamentals matter most.

Debra Borchardt: What is your outlook for 2013?

Ken Mehlman: We think that 2013 that we're looking at a growth rate toward the end of the year that ticks up a bit, perhaps 2 1/2 percent perhaps, but we think that in the short term, certainly right now and in the first half of the year, we think that the effect of the uncertainty of the fiscal cliff and the fact that there will be, regardless of whether we go over the fiscal cliff or if we don't because we do a deal, there will be government austerity.

Ken Mehlman: In fact, one of the interesting things is that if you look at the private center right now and where it's growing, that growth is to some extent reduced by, necessary and we need to do it but it is nevertheless reduced by the amount of government reduction- government austerity.  

Ken Mehlman: That's going to be a bit of an anchor on the economy, but we are generally looking at things getting better as the second half of the year goes on in part because if you look at corporate balance sheets if you look at the improving housing market, all of these things are trends that we think are positive.

Originally posted here:
http://www.thedeal.com/video/regulation/kkrs-ken-mehlman-on-the-fiscal.php