NEW YORK (
, the private equity giant chronicled in the 1980s buyout epic
Barbarians at the Gate
has brought on former Morgan
Chief Executive John Mack, who was known as "Mack the Knife" for his cost-cutting penchant at both firms.
Mack will join KKR as a "Senior Adviser" where he will help drive new investing activities and provide advisory work to companies within the firm's portfolio. Other advisers include former
CEO James Owens and
co-chair Richard Sarnoff.
"Mack the Knife" joins the barbarians as Wall Street retreats from risk
"John Mack is a great leader... He will help make us smarter investors and strengthen our firm," said KKR co-founder Henry R. Kravis in a statement. In the statement, KKR noted that "Senior Advisers" work directly with the firm's investment specialists on investments.
"The volatile economic environment has created a demand for both capital and operational expertise," Mack added in a statement.
reports that the firm is currently raising a $10 billion North American fund.
After starting his career at Morgan Stanley as a bond salesman in the early 1970s, Mack left the firm in 2001, after losing out to Phil Purcell in a public CEO battle as Morgan Stanley tried to complete a merger with
Mack returned to Morgan Stanley as chief executive in 2005 and used his fixed income acumen to drive record profits at the bank on bolstered trading of mortgages and high yielding debt. However, as the financial crisis hit, Morgan Stanley narrowly avoided a collapse only after tapping emergency bailout funds and selling a near 20% stake in the bank for $9 billion to
At the helm of Morgan Stanley, Mack completed a spinoff of the banks
banking and credit cards unit in 2007, but then was forced to convert the investment bank to a bank holding company to access emergency Federal Reserve funds a year later. Morgan Stanley took $107 billion in emergency loans from the Federal Reserve, more than any other bank during the crisis, according to
In 2010, Mack stepped down as Chief Executive and was replaced by James Gorman, who replaced Mack's trading experience with a wealth management expertise at the top ranks of Morgan Stanley. In 2011, Mack retired as Chairman, ending his long career at the firm.
Currently, Wall Street investment banks are facing an
to f private equity firms and hedge funds as new regulations like the Volcker Rule restrict once lucrative trading businesses. In recent years, KKR,
The Blackstone Group
The Carlye Group
have set up credit trading and leveraged loan businesses that mirror investment banking operations prior to the crisis.
For more on John Mack, see
in 2011. For more on Morgan Stanley shares, see who will benefit from a
To learn more about private equity buyouts and possible investments, see 5 stocks that
-- Written by Antoine Gara in New York