Ex-KKR exec Bill Sonneborn discusses his next move

March 28, 2014: 12:52 PM ET

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.

Sign up for Dan Primack's daily email newsletter on deals and deal-makers: GetTermSheet.com

  • The death of private equity's largest deal

    The largest buyout in history is on the brink of bankruptcy. Blame private equity, but be sure it's for the right mistake.

    FORTUNE -- The Wall Street Journal is reporting that Texas electricity giant Energy Future Holdings is preparing to file for bankruptcy protection, after failing to successfully restructure its $41.6 billion of debt.

    This will clearly be the largest private equity failure of all time. I say "clearly" because Energy Future MORE

    - Feb 21, 2014 11:31 AM ET
  • Exclusive: KKR mulls tech investing platform

    KKR has dipped its toe into tech growth equity in the past. Is it now ready to jump in the pool?

    FORTUNE -- Kohlberg Kravis Roberts & Co. (KKR) is in the preliminary stages of forming a tech-focused growth equity platform, Fortune has learned.

    Specific details remain very much in flux, including staff (it would be hiring from the outside), structure (either dedicated fund or, possibly, off balance sheet) and size (most likely $1b-$2b).

    KKR has MORE

    - Jan 30, 2014 12:41 PM ET
    Posted in: ,
  • Another sign of a buyout bubble

    KKR is overpaying to buy a bond fund that it already controls.

    FORTUNE -- Buyout firms appear to be running out of things to buy out. And so they are buying themselves.

    Late on Monday KKR & Co. (KKR) announced it was acquiring KKR Financial Holdings (KFN). KFN is technically a separate company, a bond fund manager that is publicly traded, but it's really just a division of the giant private equity MORE

    - Dec 18, 2013 12:13 PM ET
  • Exclusive: Sonos (sort of) raises $25 million

    Home audio company raises a 'liquidity round' for early employees.

    FORTUNE -- Sonos, a maker of high-end wireless home audio systems, has raised approximately $25 million in new funding, Fortune has learned. But none of the money is actually going into the company.

    Instead, existing investors like Kohlberg Kravis Roberts & Co. (KKR) and Index Ventures are buying up shares from early employees.

    This is at least the third time that Sonos investors MORE

    - Nov 6, 2013 11:27 AM ET
  • How KKR helped create jobs for impoverished villagers

    What happened when private equity giant KKR got involved with a rural nut processor in Bali.

    FORTUNE -- There has been lots of discussion about how private equity firms do (or don't) create new jobs, so today it's worth highlighting an instance in which jobs not only were indisputably created, but the new hires were poor rural villagers. Moreover, the participating private equity firm invested time rather than money.

    Here's the story MORE

    - Oct 23, 2013 12:09 PM ET
    Posted in: ,
  • KKR vets get more time to raise new fund

    Public Pension Capital gets a nine-month lifeline.

    FORTUNE -- It's tough to raise a new private equity fund. Even if you have decades of experience at Kohlberg Kravis Roberts & Co. (KKR) on your resume.

    Last summer we reported that former KKR executives Perry Golkin and Michael Tokarz were quietly raising a new private equity fund that would be marketed almost exclusively to public pension systems. Not surprisingly, it was called Public Pension MORE

    - Sep 5, 2013 12:04 PM ET
  • KKR's deal with Fortune's fastest-growing company

    Nine years ago, private equity giant KKR did its first ever venture capital deal. It's worked out pretty well.

    FORTUNE -- This morning we put Jazz Pharmaceuticals (JAZZ) atop our annual list of the world's fastest-growing public companies, with three-year average revenue and profit growth of 68% and 279%, respectively. So I was curious to see how Jazz had worked out for Kohlberg Kravis Roberts & Co. (KKR), which led a MORE

    - Aug 29, 2013 12:14 PM ET
  • David Petraeus joins private equity firm KKR

    Former CIA director joins private equity firm.

    FORTUNE -- Former CIA director and retired military general David Petraeus has joined private equity firm Kohlberg Kravis Roberts & Co. (KKR) as chairman of a group that will "study macroeconomic  trends and government policies to assess their implications on the firm's investments."

    He also will advise KKR's investment teams on due diligence, particularly in emerging markets.

    The new effort is called KKR Global Institute, and is MORE

    - May 30, 2013 7:02 AM ET
  • Can KKR dance the Saks two-step?

    Merging Saks with Neiman Marcus may make sense, but it won't be easy.

    FORTUNE -- Kohlberg Kravis Roberts (KKR) reportedly is considering a massive luxury retail consolidation move: Buying both Saks Inc. (which just went on the block) and Neiman Marcus (being sold by a PE group that includes TPG, Warburg Pincus, Leonard Green and Credit Suisse) -- and then merging the two companies together.

    To be sure, there are some good MORE

    - May 23, 2013 10:58 AM ET
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.