NEW YORK--(BUSINESS WIRE)--
KKR today released Thoughts
from the Road: A Shifting Landscape, a new report
analyzing key investment-related issues in China and Japan.
"Looking at the big picture, our key conclusion from the trip is that
the slowdown we are seeing in China is secular, not cyclical," Henry
McVey, Head of Global Macro and Asset Allocation, said. "Given that
China is expected to account for at least one-third of global GDP growth
this year, this insight has important implications for global trade,
monetary policy, and inflation expectations. It also means that the
recent surge in consumer and corporate credit across many emerging
market countries could — ultimately — act as the primary catalyst for
the next global economic downturn."
In the piece, Henry McVey and his team cite several key takeaways:
China is in structural slowdown mode, as excess debt and capacity
now weigh on profits, not just GDP. Slowing Chinese GDP data
seems to garner all the headlines these days, but after our most
recent trip, we think the focus should be on trends in corporate
Japan is no longer just a macro story; focus on the micro too.
The positive macro story in Japan is - on the margin - waning. As
such, we think primarily just those companies that are actively
shedding assets and/or returning cash to shareholders will outperform
handily from current levels.
Overall, Asia is in somewhat of a funk. Our trip reconfirmed
our thesis that many EM Asia countries recently redirected their
economies — potentially at just the wrong time — to take advantage of
what they thought would be ongoing strength in China's economy.
However, with China's growth now stalling amid lower commodity prices
and weak inbound trade, many EM countries are now enduring weaker than
expected growth, bigger deficits, and heightened political tensions.
Links to access the full report as well as an archive of our previous
To read the latest Thoughts from the Road, visit KKR's web
Click the following link
to download a PDF
Click the following link for an archive
of previous publications.
KKR is a leading global investment firm that manages investments across
multiple asset classes including private equity, energy, infrastructure,
real estate, credit and hedge funds. KKR aims to generate attractive
investment returns by following a patient and disciplined investment
approach, employing world‐class people, and driving growth and value
creation at the asset level. KKR invests its own capital alongside its
partners' capital and brings opportunities to others through its capital
markets business. References to KKR's investments may include the
activities of its sponsored funds. For additional information about KKR
& Co. L.P. (NYSE:KKR), please visit KKR's website at www.kkr.com
on Twitter @KKR_Co.
The views expressed herein are the personal views of Henry McVey of
KKR and do not necessarily reflect the views of KKR. This information is
not research and should not be treated as research. References to a
target portfolio and allocations of such a portfolio refer to a
hypothetical allocation of assets and not an actual portfolio. Such
views and discussion of any target portfolio or allocation do not
represent valuation judgments with respect to any financial instrument,
issuer, security or sector that may be described or referenced herein,
do not represent a formal or official view of KKR, and may not be
reflected in the strategies and products that KKR offers or invests,
including strategies and products to which Mr. McVey provides investment
advice to or on behalf of KKR. Such information is being provided merely
to provide a framework to assist in the implementation of an investor's
own analysis and an investor's own views on the topic discussed herein.
There can be no assurance that an investment strategy will be successful. Historic
market trends are not reliable indicators of actual future market
behavior or future performance of any particular investment which may
differ materially, and should not be relied upon as such. This
information should not be viewed as a current or past recommendation or
a solicitation of an offer to buy or sell any securities or to adopt any
investment strategy. This release may contain projections or
other forward-looking statements. Neither Mr. McVey nor KKR assumes any
duty to update such statements.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151012005299/en/
Kristi Huller, +1 212-230-9722
Source: KKR & Co. L.P.
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