Greenhill partner builds reputation as expert in investment banking : Krause combines relationship building with extensive real-estate knowledge to engineer deals in multiple areas

Hotel & Motel Management, August 14, 2000 by Robert A. Nozar

"We invest our money and that of other investors in office buildings, residential properties, industrial projects and hotels," Krause said. "We have very wide expertise. We invest all over the United States."

A prolific career

Krause's career has seen him close more than 130 sale, financing, and merger-and-acquisition transactions in the real-estate, hotel, leisure and corporate areas, along with raising more than $50 billion on behalf of clients.

"When Greenhill & Co. was put together, it was done with a commitment to have our partners focus on deals," Krause said. "We don't cross-sell other products or services; we focus solely on providing strategic advisory services."

Krause studied liberal arts and sciences, graduating No. 1 in a class of 1,100 at Manhattan College run by the Christian Brothers. Krause mulled career choices ranging from medicine to law to business. He initially decided law was the right field.

With that decision made, Krause watched on television in 1969 the first modern draft lottery. His birthday--Sept. 14--came up first. Krause was in the Army now. But President Nixon had run and won on a platform to wind down the war in Vietnam, and by the time Krause's training was complete, his chances of being sent to war were nearly gone. He soon was discharged and entered Harvard Law School a year later. He got his law degree in 1974.

"I practiced law for seven years with Cleary, Gottlieb, Steen & Hamilton," Krause said. "My work was mainly in real-estate, securities and corporate finance."

In 1981, Morgan Stanley, which was a client of the firm, offered Krause the chance to work in its investment banking division.

Celebrity marketing

When Krause took over Red Roof, he used his penchant for relationship building to work with comedian Martin Mull, the Red Roof spokesman.

"The key in the hotel industry is to send a clear, consistent marketing message, and that was what was being done at Red Roof with Mull," Krause said. "As a spokesman, he was unique and a symbol of Red Roof. Keeping a particular, successful marketing message is a winning proposition in an industry where marketing and advertising change directions so often."

Mull and Krause became acquainted, and Krause regularly provided Mull as a speaker for the UCLA Extension Hotel Industry Investment Conference at the request of Jim Burba, the conference chair. From standup work at the annual January conference to moderating a panel of hotel-industry executives, Mull was an entertainer who could ask questions others might hesitate to voice. And, of course, there was comic relief.

"Martin Mull is a bright, interesting, funny guy who is of value not only to Red Roof, but to the entire segment of lodging and the industry overall," Krause said.

Now, Krause's duties are far removed from helping to promote the sale of franchises and the luring of guests to become consistent users of a particular economy product.

"All of our partners worked on complex transactions and financing structures," Krause said. "We have a global network of contacts at the c.e.o. and board levels of the largest companies. That means we have a long list of people to source potential strategic partners for our clients."