From firefighter pensions to KKR: How early alts exposure helped shape Doug Krupa

When Doug Krupa was growing up in 1990s Rockland County, across the Hudson River northwest of Manhattan, the influences that would shape his later career were very much front and center.

In an interview Krupa, who is now partner and head of global wealth solutions in the Americas at private equity giant KKR, told InvestmentNews that he grew up in an environment where work ethic was core to the family dynamic.

“I will say my parents worked extraordinarily hard,” he said, noting that his dad rose through the ranks of the FDNY to become a battalion chief and later served as the head of the officers’ union.

With his mother taking care of him and his sister, Krupa watched his dad, like the other firefighters that lived nearby, putting in extremely long hours in a hugely demanding job.

“He worked hard to put us through college, and that really instilled a strong a work ethic with me,” Krupa said, explaining that at holidays such as Christmas, firefighters would get paid double overtime. So, rather than their typical 24-hour shift, Krupa Sr. and his fellow firefighters were working 48-hour shifts. “They'd be in the firehouse, on call, sleeping there … I don't know how you survive on barely any sleep for 48 hours, especially given how active they are.”

While his dad talked the young Doug out of following in his footsteps and becoming a firefighter, he did instill in him a philosophy about work that he still lives by. “He said, ‘whatever you do, try to make an impact in the industry you’re in’,” Krupa told InvestmentNews. “And that's always kind of stuck with me.”

His first job came when he was in high school and provided an outlet for his enduring curiosity and his love of electronics and computing. “I had a stint in high school, back when people still had desktops and not laptops … where I’d go to the computer shows, get the component parts, build them, and sell them to families from school,” he said.

“You made a decent profit back in the day,” Krupa said, and joked that Michael Dell figured out that business model on much bigger level that he could.

A participant in math league in high school, Krupa also had the heart of “a math geek.”

He started out as a computer science major in college, although internships at Smith Barney prompted him to shift direction. “I got to use the quantitative analytical side of my brain,” he told InvestmentNews. “And it scratched the itch in terms of the analytics, the math.” As a result, he ended switching his major and graduated from SUNY Geneseo in 2000 with a finance-focused management degree.

Shortly after graduation, he worked at UBS PaineWebber, where he served as a financial advisor. At that time, about half of his book of business was New York City firefighters. “I also was very, very curious, trying to figure out why these pensions were so over funded - even in the late 90s, early 2000s, there was still a lot of talk of not every pension being fully funded, but here we had a union and an investment arm that figured out the importance of alternatives,” he said. “Roughly 30 percent of the FDNY's pension was in private markets, and that led to them, again, achieving higher actuarial rates, getting better outcomes.”

He said that his penchant for increasing access and availability of alts dates back to this time, noting that the seed was planted during his UBS PaineWebber day.

Alternatives became an ongoing theme for Krupa, as he went on to oversee the equity and alts product business at Citi Salomon, before he got a call to come over to Blackstone. Krupa was at the private equity behemoth for eight years. At Blackstone, Krupa rose into a leadership role helping expand the firm’s reach into the wealth channel, developing products that helped lay the foundation for the Blackstone Real Estate Investment Trust and broaden access to private real estate strategies for individual investors.

He joined KKR in 2019, with the remit of building out the investment firm’s wealth business, as well as its product lineup. “It took us about three years to develop those big building blocks - for private equity, for private infrastructure, for private real estate, for private credit now in two flavors, one for direct lending, one for asset-based finance,” he said. “But once we had that foundation, things really started moving at a supersonic pace.”

And there could be more to come. “We've built the big core asset-class building blocks, but are there other specialized areas that make sense in a client's portfolio?” he said. “Can you create strategies similar to direct indexing or other tax-advantaged approaches using private markets? We're thinking about that.”

“Is there something in digital infrastructure? We're thinking about that,” he added.

KKR has certainly been busy - earlier this year the private equity giant clinched a $1.4 billion deal to buy sports team investor Arctos Partners. The deal, which closed earlier this month, highlights KKR’s desire to give mass-affluent and high-net-worth investors access to the sports asset class.

KKR’s private wealth business is growing. In its recent fiscal first-quarter results, the company said that Assets Under Management for its retail-focued K-Series products, which are aimed at wealthy individual investors, grew to $38 billion across asset classes, up from $21 billion in the prior year’s quarter. Co-CEO Scott Nuttall also described KKR’s private wealth push as a “multi-decade build.”

Set against this backdrop, Krupa is focused on how advisors can harness his company’s products. “We don't start by talking about what our portfolio of products is,” he said. “We start by asking the advisor, what do your clients not have in the portfolio? What are they asking for? What are they missing in their allocation today that we can be helpful with?”

More than 20 years since he worked as an advisor, he can also draw on his own experiences. “I think advisors appreciate knowing that I spent time in their shoes, that I get out there, and spend time to stay connected,” he said. “A lot of times I’ll attend an event as a speaker, but I make sure I spend time with my relationship managers in that market and connect with their advisors, and even clients.”

“And I think talking about my experience … it builds like and trust.”