KKR

Ex-KKR exec Bill Sonneborn discusses his next move

March 28, 2014: 12:52 PM ET
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Bill Sonneborn: From KKR to EIG

Bill Sonneborn has joined energy investment firm EIG as president.

FORTUNE -- William Sonneborn surprised Wall Street last summer, announcing that he would step down as CEO of Kohlberg Kravis Roberts & Co.'s (KKR) credit investment business, known as KKR Asset Management. He also had been serving as CEO of a publicly-traded specialty finance affiliate called KKR Financial (KFN), which is now in the process of being subsumed by KKR in a $2.6 billion transaction. All we were told at the time was that the 43 year-old planned "to pursue a new challenge."

Today those plans came into focus, as Sonneborn was announced as the new president of EIG Global Energy Partners, an energy-focused investment firm that has deployed $15.7 billion into 290 energy companies and projects since being founded in 1982. EIG used to be part of Trust Company of the West, where Sonneborn once served as president and chief operating officer, before spinning out into an independent entity at the end of 2010. The firm currently is investing out of a $6 billion fund raised in 2012, and also today announced a minority equity investment from Affiliated Managers Group (AMG).

So we spent some time on the phone with Sonneborn, to learn about why he's joining EIG and why he left KKR. What follows is an edited transcript of our conversation:

FORTUNE: How did this opportunity come about?

Sonneborn: I formally left KKR back on October 1, but I had known the folks at EIG for a long time. They used to be part of TCW when I was president there. We stayed close over the years and, from time to time, I gave them guidance and advice. After I decided to leave KKR, they approached me relatively quickly, and said they'd love to have me join to help grow and expand the platform. They have a very long track record in global energy investing, from renewables through to oil and gas, so I'm looking forward to helping them figure out what the next iteration of the firm and management will be.

Your background is more as a generalist than as an energy investor. Does it matter if someone in this position at EIG has deep energy sector knowledge?

It definitely matters. I had a long history of working with this team from the perspective of overseeing them while at TCW. And at KKR I was very involved on oil and gas initiatives. One thing I did about two years ago, for example, was allocate around 20% of KFN's capital into specific energy investments. From a global macro perspective I like the asset class because of possible inflationary pressures, and exposure to a commodity like oil is a good hedge against inflation. Plus, not only is the growing population causing an enormous increase in the demand for traditional energy and electricity, but also for clean energy and renewables.

Why did you leave KKR?

I just wanted a new challenge. KKR had become much more New York-centric, and I didn't want to live there. Plus, I had achieved the original goals that had been laid out for me -- taking something that wasn't much of anything and helping grow a real business. So I decided it was time to take a six month breather, pursuant to my non-compete, and then join EIG.

You mentioned the "next iteration" of firm management. How do you fit into the existing EIG structure?

There were two co-presidents historically, Randy Wade and Kirk Talbot, both of whom will drop that title as I become president. Blair Thomas remains as CEO, as he always has been. In the context of thinking about the platform, not only does this help us think about succession, but also helps us do so in the context of someone with different experiences in how things are done.

You hiring announcement was married with the news that AMG is taking a minority stake in EIG. Were the two things related?

Not specifically. Obviously I've known for a long time about the AMG investment, which lets EIG put a bunch of capital on its balance sheet so that we can do more investing of the general partner's capital, in addition to our fund capital. But the two things aren't specifically linked.

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