Kelso was organized in 1971 as an advisory firm which specialized in arranging acquisitions and equity investments in corporations structured with employee stock ownership plans (ESOPs).

The conceptual foundation for ESOPs is grounded in the writings of the late Louis O. Kelso, the Firm's founder, who concluded from his economic studies that a broader diffusion of capital ownership would address a variety of economic problems. Kelso has increasingly utilized performance-based plans to provide equity incentives to the management teams and the employees of portfolio companies.

In 1980, Kelso established its first investment partnership to provide a source of equity for Kelso sponsored acquisitions and recapitalizations. The establishment of this partnership marked the beginning of the transformation of Kelso's business to the activity in which it is primarily engaged today, the management of private equity investments. Since 1980, Kelso has managed seven private equity investment partnerships with total partnership capital of over $4.9 billion. In this same time, Kelso has invested in more than 90 companies with total capitalization of approximately $31 billion.

In 2008, Kelso closed its eighth investment fund, Kelso Investment Associates VIII, L.P., with $5.1 billion of committed capital raised. Through a side-by-side investment fund, the Kelso principals are collectively the largest investor in KIA VIII.

Kelso invests in companies where key managers make significant personal investments and works in partnership with management teams to create value for investors. As a direct result of this approach, Kelso has built a broad and loyal network of operating executives and a reputation as an attractive partner for management groups seeking sponsors for management buyouts. The Firm does not pursue hostile transactions or break-up opportunities