A builder with law in his toolbox

Peter C. Krause is managing director of Greenhill & Co., a merchant bank with offices in New York City, Dallas, Toronto, London and Frankfurt. He serves as chair of its Barrow Street Real Estate Funds. Previously, Krause was managing director at Morgan Stanley. He also practiced at Cleary Gottlieb Steen & Hamilton and Schulte Roth & Zabel. Since 2005, he has been chair of the HLS Fund.

You graduated from Manhattan College in 1970 and were accepted into HLS the same year. Why did you delay attending?
Well, during my senior year in college, the Vietnam War was hot. And thanks to my birth date, I was the number one pick in that first draft lottery conducted in December 1969 on nationwide television. I had been accepted at Harvard Law School, but instead I had to go into the Army. I asked HLS to defer my acceptance until I completed active duty, but it had a policy of not deferring admission for military service. So I reapplied a year later and got accepted again. I’m one of the few people who has two separate acceptance letters from Harvard Law School!

What were your career plans when you graduated?
My favorite course was Professor David Herwitz’s Business Planning, and my goal was to get into real estate and corporate law. Early on I did a lot of property and M&A transactions and loved it. In 1981, I made the switch to investment banking and went into the real estate department of Morgan Stanley.

The real estate market crashed not too long after you entered the field. How did that affect you?
I spent two years restructuring real estate investment trusts, working through bankruptcies and doing asset-swap programs involving loan cancellations. During the good times, you don’t have to worry. But when an industry crashes and burns, that’s when you really dig in and can learn a great deal.

How did you segue into being the chairman of the board of a listed hotel company?
At Morgan Stanley, one of the groups I ran was the lodging and leisure group. I spent a lot of my time as a real estate fund investor, and we actually bought a hotel company with 300 hotels, Red Roof Inns. I served as chairman of the board, and we took it public on the New York Stock Exchange. It was later sold to the French hotel company Accor. I went from being counsel, to investment banker, to chairman of the board of a publicly traded hotel company—all under the Morgan Stanley umbrella.

What inspired you to move to Greenhill?
I enjoyed Morgan Stanley, and I was there until 1996. Its former president, Bob Greenhill, established a new investment bank, and he asked me to join him and start a real estate fund. We’ve been fortunate with our success, and we took the firm public three years ago. We’re currently investing our third Barrow Street Real Estate Fund, which buys and develops real estate projects across the nation.

In addition to supporting HLS, you are also involved with the Harvard College Parents Fund.
My wife, Alice, and I have been national co-chairs for the last nine years. We’ve been blessed to have our three children, Molly, Christina and Peter, attend Harvard College. Our son-in-law, Ted Fienning, is also an alumnus of the college. We’re also very involved in a variety of charities supporting education and serving the poor and sick, many sponsored by the Catholic Church.

When a young person asks for career advice, what do you say?
In terms of professional education, I encourage them to study law. I’ve used my HLS degree in four different career paths—in private practice at Cleary Gottlieb, in finance at Morgan Stanley, in real estate investing at Greenhill and also for annual lecturing at Cornell University. The J.D. is an excellent tool to have in your kit!