Before we start to think about KFN and where it is today and where it's going, it helps to understand its past. And I was thinking you know flying over from Europe to New York yesterday, a little bit about where KFN has been and I remember 4.5 years ago when I was in a meeting when Henry Kravis's office here in New York, I saw a sign he had in his office. It said arrogance kills.
I remembered that sign then I flew back to the West Coast after that meeting and I was greeted at the door of my house with my wife, she said you have to talk to your son, he did that thing again. I can't remember what that thing was but it probably involved beating up his little sister.
So I went upstairs and sat on the bed of my son and I asked him what had happened and he said, well daddy because I know you and mommy say don't make the same mistake twice, but I have a big problem, I forget that I make the mistake, can you help me think of a process so I can record and remember when I make mistakes. So I don't do them again.
And so the story of Henry Kravis and the sign in his office and a lesson my son taught me, all really implies a little bit in the context to the history of KFN. We started out in 2004 as a mortgage, it was a corporate structure that allowed us to focus on building our leverage credit capabilities and bank loans and high yield using [CLOs] as financing source, but the problem was that a lot of our assets were in the residential mortgages which we did not have a concrete expertise at the firm, it's lesson number one.
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