John “Mack the Knife” Mack Joins KKR

John Mack, whose aggressiveness and affinity for cost cutting as chief executive at Morgan Stanley and Credit Suisse earned him the nickname “Mack the Knife” on Wall Street, has become the latest industry grandee to join Kohlberg Kravis Roberts & Co. as a senior adviser. The private equity firm said on Tuesday that Mack would join its senior advisory team that includes Qantas Airways Chairman Leigh Clifford, former Honeywell International CEO David Cote and former HSBC Holdings group Chairman Sir John Bond.

(Reuters) – John Mack, whose aggressiveness and affinity for cost cutting as chief executive at Morgan Stanley and Credit Suisse earned him the nickname “Mack the Knife” on Wall Street, has become the latest industry grandee to join Kohlberg Kravis Roberts & Co LP as a senior adviser.

The private equity firm said on Tuesday that Mack would join its senior advisory team that includes Qantas Airways Ltd Chairman Leigh Clifford, former Honeywell International Inc CEO David Cote and former HSBC Holdings Plc group Chairman Sir John Bond.

“John Mack is a great leader who we believe will add enormous value to KKR’s investors, partners and our portfolio. He will help make us smarter investors and strengthen our firm,” Henry Kravis, co-chief executive officer of KKR, said in a statement.

Buyout firms often appoint seasoned executives from all walks of the economy as advisers to bolster their clout, relationships and expertise as they strive to clinch more deals and keep politicians and regulators onboard.

Mack stepped down as chairman of Morgan Stanley at the end of 2011, more than a year after he gave up his title as CEO. He sits on the boards of several institutions, including the advisory board of China Investment Corporation and the board of directors of payment services firm Rev Worldwide.

Mack, 67, first joined Morgan Stanley in 1972 as a bond salesman and worked his way up through the ranks to become president and chief operating officer of Morgan Stanley Dean Witter in 1997.

After being kicked out in 2001 following a dispute with Morgan Stanley’s then-CEO Philip Purcell, Mack resurfaced at Credit Suisse Group AG, eventually becoming co-chief executive. That arrangement did not last, and the board chose not to renew his contract.

He briefly joined the hedge fund Pequot Capital Management Inc as chairman in June 2005 before almost immediately leaving for Morgan Stanley after Purcell resigned under board pressure over the firm’s poor performance.

When Mack returned to the bank, he received a standing ovation on the trading floor. He worked to strengthen Morgan Stanley’s trading department, but also piled on risk, a move that generated a big profit in 2006 but hurt Morgan Stanley leading into the financial crisis of 2007 to 2009.

“The volatile economic environment has created a demand for both capital and operational expertise and I am proud to join a team that offers both of those things,” Mack said in the statement released by KKR on Tuesday.

His successor at Morgan Stanley, James Gorman, has been scaling back much of the bank’s risk-taking in trading and relying more heavily on wealth management to generate stable income.

A son of Lebanese immigrants and a graduate and former football player at Duke University, Mack is one of Wall Street’s more colorful characters. He once flirted on a London stage, with more than 1,000 bankers looking on, with Joanna Lumley, the actress who played the dipsomaniac Patsy Stone in “Absolutely Fabulous.”

Founded in 1976 by Jerome Kohlberg Jr, Henry Kravis and George Roberts, KKR, whose investments include retailer Toys R US Inc, Internet domain registration company Go Daddy Group Inc and hospital operator HCA Holdings Inc, became widely known through its $25 billion leveraged buyout of RJR Nabisco in 1988, a battle that was immortalized in the 1990 bestseller “Barbarians at the Gate.” (By Greg Roumeliotis)