Richard Sarnoff, president of Bertelsmann Digital Media Investments (BDMI), the corporate venturing unit of Germany-based media group Bertelsmann, has joined private equity firm Kohlberg Kravis Roberts (KKR) as a senior adviser.
Thomas Rabe, chief financial officer of Bertelsmann, will replace Sarnoff as president of BDMI from February 1.
Sarnoff was also previously co-chairman of Bertelsmann’s US operation. At KKR, Sarnoff will help the firm agree more leveraged buyouts and advise on its existing portfolio of media assets.
KKR, which manages more than $55bn across its business lines, has invested more than $8bn of equity capital leading or supporting media and communications sector buyouts with total enterprise value in excess of $60bn, including Nielsen, TDC, SBS Broadcasting, PagesJaunes, Yellow Pages Group, Seven Media and ProSieben.
Sarnoff will take board seats at BMG Rights Management, a joint venture between KKR and Bertelsmann formed in 2009 to manage music royalties, and Weld North, a partnership formed last year between KKR and Jonathan Grayer to buy companies in the consumer services sector, such as the education, media, health and marketing.
Rabe said: "We are pleased that he will join the board of BMG, our music-publishing joint venture with KKR, which is fast becoming a major player in the music business, and look forward in exploring with him other partnerships between us in the future."
Alexander Navab, co-head of KKR’s North American private Equity business and head of the media and communications industry team in the US, said: "We have come to know and highly respect Richard for the depth of his experience in investing and leading strategic growth initiatives in the media industry."
Sarnoff said: "Such a varied and long career at Bertelsmann and Random House – and contributing to the growth of leading companies in books, television, services, and magazines and digital media – has been a great preparation for an active role in the transactions that will define the media industry in years to come.
"Joining KKR provides a singular opportunity to work on significant deals across the traditional and digital media landscape. Simultaneously, with Weld North, I look forward to helping build an exemplary group of investments in consumer services."
Grayer, chief executive officer of Weld North, said the partnership was preparing to make its first investments.
As president of BDMI, Sarnoff said he led the company’s investment activities in digital media, establishing offices in the US, Europe and Asia, and building a portfolio of more than 12 companies, including Trion, Mojiva, Qeep, American Reading Company, Vindicia, RoyaltyShare, and DealUnited. Prior to establishing BDMI in 2006, and being named co-chairman of Bertelsmann Inc., Sarnoff was a senior executive in Bertelsmann’s US book publishing operations, including helping with Random House acquisition and merger with Bantam Doubleday Dell and subsequently he became that company’s CFO.
After that, Sarnoff created and ran Random House Ventures, the book publisher’s corporate venturing unit that developed into BDMI.
Separately, his wife, Ann, left a similar role at Dow Jones Ventures last year to join media group British Broadcasting Corporation.