Since KKR was founded in 1976 by Jerome Kohlberg, Henry Kravis, and George Roberts, the investment company has been regarded as the mother of all private equity firms. KKR's European head, Philipp Freise, has long been regarded as a good dealmaker. That could now change with the majority takeover of the PR company FGS Global.

Freise recently described FGS CEO and co-founder Alexander Geiser as „my friend and partner in crime“. Now, he is making him rich. KKR is buying 50% of FGS, valuing the company at 17 times its operating profit (EBIT). The total valuation is 1.7 billion dollars. A generous amount for a company with a turnover of 465 million dollars, which consists of 1,400 people with their laptops. KKR has probably paid far too much.

There are also more and more other scratches on KKR's shiny image in Germany. KKR sold the ailing payment service provider Unzer (formerly Heidelpay) from Berlin to its creditors. At Dutch bicycle manufacturer Accell, there were significant quality problems with the Babboe brand. Springer, in which KKR holds a 35.6% stake, has made a name for itself above all with job cuts, harassment scandals and plans to split up the media and classified advertising business. The financial investor apparently wants to sell the less lucrative newspaper business to Springer boss Mathias Döpfner and Friede Springer, after a planned exit via an IPO for the job ad subsidiary Stepstone has so far failed to materialise.

The next flop in the portfolio now threatens to be FGS. In Germany, the PR company is the market leader among strategic communications consultancies. But this is precisely what threatens to become a problem. Where is further growth supposed to come from? After all, conflicts of interest are already piling up at FGS. KKR, for example, is not only the owner of FGS but also receives advice on communications matters, including press releases about the takeover – as do KKR's competitors, Advent and Nordic Capital, at times. Rival CVC is also a client of FGS and also holds a stake in FGS competitor Teneo. In bidding wars such as the one for the pharmaceutical company Stada or the pet food mail order company Zooplus, bidders and companies sometimes find themselves with the same PR advisor. This makes it difficult to maintain the Chinese walls. It would be no wonder if some clients soon found these conflicts of interest unresolvable and flee the scene.