Good morning.
KKR became famous in the 1980s as the leveraged buy-out pioneer that acquired RJR Nabisco—a nail-biting drama chronicled in the book Barbarians at the Gate. Today it’s the world’s third-largest alternative asset manager that, as my Fortune colleague Shawn Tully notes, “boasts the industry’s hottest stock and biggest ambitions.” Tully spoke with co-CEOs Joe Bae and Scott Nuttall about their strategy to move beyond a traditional capital-light, fee-based business to a buy-and-hold model more akin to Warren Buffett’s Berkshire Hathaway. Shawn’s new story, published today, details how they plan to reach $1 trillion in assets by 2030 and become a much more profitable company along the way.
At their heart, most successful investment firms try to foster what Nuttall calls an “apprenticeship culture” in which leaders teach and test and create a state of constant learning. Bridgewater’s founder Ray Dalio called it “radical transparency;” Berkshire Hathaway’s Charlie Munger talked about being a “learning machine.”
Another way top leaders encourage learning is by making themselves extremely accessible to up-and-comers. While Ken Chenault learned a lot in his 17 years as CEO of American Express, he embraces the freedom he now has to do deeper dives as chairman and managing director of venture firm General Catalyst. “I loved being CEO of Amex but I was scheduled two or three years out,” Chenault says. “The terrific thing now is that I can spend four or five hours with a founder in a way that would have been really hard before.”
Mark Sotir, who runs Equity Group Investments, the investment firm founded by the late Sam Zell, told me earlier this summer that “the environment Sam created was one where you have to grow; you don’t run out of things to learn or things to try. You have to experiment.”
It’s a worthwhile lesson at a time when many are lamenting how to educate the next generation in an age of AI. Some of the greatest insights, of course, come from learning about the experiences of others. We compiled a special digital issue (story links below) that’s out this morning with half a dozen recent and new features that we hope you’ll find instructive.
More news below.
Diane Brady
diane.brady@fortune.com
Follow on LinkedIn
A special digital issue of Fortune
The best stories of July and August from Fortune, including a radical overhaul at a private equity titan, a crisis for the First Family of poultry, and more.
— KKR’s co-CEOs want to reach $1 trillion in assets by 2030. To do so, they’re willing to make big bets and leave the PE firm’s old ways behind. Read more.
— John Randal Tyson was set up to run his family’s $21 billion chicken empire. His erratic behavior could change that. Read more.
— Jeff Bezos’s famed management rules are slowly unraveling inside Amazon. Read more.
— A 25-year-old crypto whiz kid went from intern to president of Jump Trading’s crypto arm. Then he became the fall guy. Read more.
— An inside look at a secretive investment firm that counts some of the wealthiest Americans as clients and some of Silicon Valley’s most powerful figures as advisors. Read more.
— Can you quit Ozempic and stay thin? These startups say you can—but doctors say that’s an unproven claim. Read more.
TOP NEWS
Elon Musk defends Telegram founder
Elon Musk is calling for the release of Telegram founder Pavel Durov, who was arrested in France over the weekend and is expected to be charged with failing to moderate illegal activity and commerce on the messaging app. The arrest raises questions as to whether Musk could be next. Fortune
Temu's parent company sinks
The stock of Temu's parent company PDD Holdings fell more than 30% on Monday after the company reported disappointing sales in Q2 and warned that Temu, a discount e-commerce site, could continue to struggle in the future. PDD Holdings officials blamed increased competition from companies like Amazon and scrutiny of Temu's business practices, including safety concerns. Fortune
California considers crackdown on big AI
The California State Senate will vote on a new bill this week that could require AI companies in the U.S. to thoroughly test for safety risks and include a "full shutdown" feature for AI models that cost more than $100 million to train. Silicon Valley-based AI developers like OpenAI say regulation should be controlled on the federal level. Fortune
AROUND THE WATERCOOLER
CEOs are shelling out up to $15,000 for psychedelic mushroom retreats to reinvent their leadership style by Lila MacLellan
Texting your employee after-hours can now get you a nearly $13,000 fine in Australia by Chloe Berger
Donald Trump says Elon Musk can consult for the federal government if he wins reelection by Paolo Confino
Volkswagen adds in-car gaming to certain new models by Chris Morris
More than 40% of full-time U.S. employees aren’t making a living wage by Emma Burleigh
Skepticism and confusion: Inside Elon Musk’s latest promises to X employees by Kali Hays
Luxury footwear CEO took over his first store at just 19 and had to sack all the staff who were stealing. Now he runs $432 million-a-year Kurt Geiger by Orianna Rosa Royle
This edition of CEO Daily was curated by Joey Abrams.
