KKR Releases “A New Foundation for Global Wealth: Rebuilding Portfolios for the New Regime”November 16, 2023
New KKR Report Focuses on Role of Private Markets in Individual Investor Portfolios
“We believe that a confluence of tectonic geopolitical and macroeconomic shifts, a shrinking and more concentrated public company universe and expanded access to private markets are making asset classes such as Private Equity, Private Credit, Private Infrastructure and
Roberts and her team propose proprietary models for diversifying beyond the traditional stock and bond 60/40 portfolio, which seek to achieve the following three primary objectives:
Generate Income: Aims to increase yield while maintaining access to liquidity by including a substantial bond allocation and reallocating from
Public Equitiesto more yield-oriented alternative asset classes such as Private Credit, Private Real Assets and Private Infrastructure.
Preserve Capital: Designed to increase stability of returns while providing inflation hedging benefits through allocations to Private Credit and Private Infrastructure, which tend to exhibit low volatility and reliable hedging characteristics.
Boost Returns: Enhances total return potential by reallocating some bond exposure to Private Equity, Private Credit and Private Infrastructure while maintaining a healthy exposure to
The report also notes that understanding cash management is critical to successfully implementing allocations to private markets alternatives and shares a framework for liquidity management that involves segmenting liquid and illiquid investments and mapping private markets investment funding and harvesting expectations.
- To read the latest Investing for Wealth note, click here.
- To read prior installments in our portfolio construction series, click here, here, here and here.
- For an archive of previous publications, click here.
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of
The views expressed in the report and summarized herein are the personal views of
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