The son of Bessie (Roberts) and Raymond Kravis, a successful Tulsa oil engineer who had been a business partner of Joseph P. Kennedy, Henry began his education at the Eaglebrook School, ('60) followed by high school at The Loomis Chaffee School. He then majored in economics at Claremont McKenna College in Claremont, California and graduated in 1967 before going on to Columbia Business School, where he received an MBA degree in 1969.
After working at various jobs in New York City's financial sector, he and his first cousin, George R. Roberts, joined the staff of Bear Stearns. There, they worked under the corporate finance manager, Jerome Kohlberg, Jr.. They both became partners at Bear Stearns at a very young age, 30 and 31.
Working for Bear Stearns in the late 1960s and early 1970s, Kravis, alongside Kohlberg and Roberts began a series of what they described as "bootstrap" investments. Their acquisition of Orkin Exterminating Company in 1964 is among the first significant leveraged buyout transactions.. In the following years the three Bear Stearns bankers would complete a series of buyouts including Stern Metals (1965), Incom (a division of Rockwood International, 1971), Cobblers Industries (1971), and Boren Clay (1973) as well as Thompson Wire, Eagle Motors and Barrows through their investment in Stern Metals. Although they had a number of highly successful investments, the $27 million investment in Cobblers ended in bankruptcy. Kravis and his associates created a series of limited partnerships to acquire these various corporations, ones they judged were performing well below their sales and profit potential or where there were untapped financial assets that could be monetized. In most cases, Kohlberg Kravis Roberts & Co put up ten percent of the acquisition price from its own funds and borrowed the rest from investors by issuing high-yield bonds.
By 1976, tensions had built up between Bear Stearns and the trio of Kohlberg, Kravis and Roberts leading to their departure and the formation of Kohlberg Kravis Roberts in that year. Most notably, Bear Stearns executive Cy Lewis had rejected repeated proposals to form a dedicated investment fund within Bear Stearns and Lewis took exception to the amount of time spent on outside activities. Early investors in KKR included the Hillman Family and the Griffith family (who are also large shareholders in MGM and Time-Warner) By 1978, with the revision of the ERISA regulations, the nascent KKR was successful in raising its first institutional fund with approximately $30 million of investor commitments.
In 1987, Jerome Kohlberg, Jr. resigned from KKR, and Henry Kravis and George Roberts continued to lead the firm. Under Kravis and Roberts the firm was responsible for the 1988 leveraged buyout of RJR Nabisco. At a cost of $31.4 billion, it was then the highest price ever paid for a commercial enterprise. The publicity surrounding the event led to the story being dramatized in the book and film, Barbarians at the Gate. In early 1995, Kohlberg Kravis Roberts & Co divested its remaining holdings in RJR Nabisco.
The list of companies in which Henry Kravis's KKR has invested over the years includes health care provider Hospital Corporation of America (HCA), TXU, Playtex, Beatrice Foods, Safeway, Duracell, Toys "R" Us, Borden, First Data and Regal Entertainment Group.
He later married New York designer Carolyne Roehm (born Carolyne Jane Smith) in 1985, but the marriage ended in divorce in 1993. The home decorated for the couple by Robert Denning and Vincent Fourcade was parodied in the 1990 movie "The Bonfire of the Vanities (film)".
Kravis is currently married to a prominent Canadian economist, Marie-Josée Drouin, a Fellow of the Hudson Institute and a former columnist and TV personality in Canada. She also sits on the boards of the Memorial Sloan-Kettering Cancer Center, the Robin Hood Foundation, and is the president of the Museum of Modern Art board of directors.
Kravis has been subjected to criticism from various liberal campaigns, most notably "War on Greed," which attempts to document his lifestyle in an effort to force legislative changes in relation to the taxation of private equity, specifically the carried interest earned by private equity firms.
He is a benefactor and a past chairman of New York's public television station and sits on the board of the Metropolitan Museum of Art. A Trustee of the Mount Sinai Medical Center, Henry and wife Marie-Josée Kravis donated $15 million to establish the "Center for Cardiovascular Health" as well as funding a Professorship. They have also endowed the chair in Human Oncology at Memorial Sloan-Kettering Cancer Center in New York.
He previously co-chaired with Jerry Speyer the influential Partnership for New York City, founded by David Rockefeller in 1979, and now sits on its board of directors. He created the New York City Investment Fund, a non-profit organization to create jobs and new business in New York City.
He is a Trustee of the Council on Foreign Relations in New York and is a member of the leading business group, the Business Council. He co-chairs the Columbia Business School Board of Overseers and is a vice-chairman of Rockefeller University.