Press Release

KKR Releases 2019 Global Macro Outlook

KKR Releases 2019 Global Macro Outlook

January 9, 2019

Henry McVey Sees Value in Liquid Markets, but Acknowledges a New Reality for Investing: “The Game Has Changed”

NEW YORK–(BUSINESS WIRE)– KKR today released the 2019 Global Macro Outlook piece by Henry McVey, Head of Global Macro and Asset Allocation (GMAA). In “The Game Has Changed,” McVey outlines his perspective on the current investing environment, details several investment considerations portfolio managers should have on their horizon, and shares his outlook for key action items and asset allocation targets for 2019 and beyond.

“As we begin 2019, we definitely tilt more positive in our global asset allocation and macro positioning, despite our call for a weaker economic environment,” McVey says. “However, it is not business as usual in the global capital markets these days. In our humble opinion, the game has changed.”

Specifically, McVey and his team see four major influences that will require a different approach to asset allocation for investors in the years ahead:

1. A structural shift from monetary policy to fiscal policy is under way

2. Technology, while still an incredibly powerful agent of change in the global economy, now faces more valuation and regulatory headwinds than in the past

3. Tightening liquidity conditions amidst higher real rates are macro headwinds that must now be considered

4. The rise of geopolitical uncertainty warrants a higher risk premium than in the past

Despite these crosswinds, McVey’s message is not to head to the sidelines. Rather, he advocates staying invested and electing thoughtful asset allocation preferences by taking into account the key macro themes outlined throughout his report. By doing so, he believes investors with a long-term game plan and the ability to buy complexity amidst uncertainty can drive above-average returns from current levels.

The report details the GMAA team’s updated asset allocation model for 2019, including the team’s view on interest rates, inflation, oil, stocks versus bonds, and cycle duration, as well as geographic views, specifically regarding the economic outlook for the U.S., Europe, China and Mexico.

In terms of key calls for 2019, McVey and his team believe public equities are now pricing in a recession, with liquid credit not far behind. So, for the first time in three years, he is now moving to an overweight position in public equities, including the U.S. McVey also remains constructive on cash flowing assets linked to nominal GDP, including infrastructure and asset-based finance. Though he thinks the role of government bonds in global asset allocation is structurally changing, he sees good value in the short-end of the curve, particularly in the U.S. Finally, he sees the dollar peaking against many currencies in 2019.

Links to access this report as well as an archive of Henry McVey’s previous publications follow:

About Henry McVey

Henry H. McVey joined KKR in 2011 and is Head of the Global Macro and Asset Allocation team. Mr. McVey also serves as Chief Investment Officer for the Firm’s Balance Sheet and oversees Firmwide Market Risk at KKR. As part of these roles, he sits on the Firm’s Investment Management & Distribution Committee and the Risk & Operations Committee. Prior to joining KKR, Mr. McVey was a managing director, lead portfolio manager and head of global macro and asset allocation at Morgan Stanley Investment Management (MSIM). Learn more about Mr. McVey here.

About KKR

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic partners that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKR’s investments may include the activities of its sponsored funds. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at and on Twitter @KKR_Co.

The views expressed in the report and summarized herein are the personal views of Henry McVey of KKR and do not necessarily reflect the views of KKR or the strategies and products that KKR offers or invests. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be relied on in making an investment or other decision. This release is prepared solely for information purposes and 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 contains projections or other forward-looking statements, which are based on beliefs, assumptions and expectations that may change as a result of many possible events or factors. If a change occurs, actual results may vary materially from those expressed in the forward-looking statements. All forward-looking statements speak only as of the date such statements are made, and neither KKR nor Mr. McVey assumes any duty to update such statements except as required by law.

Kristi Huller or Samantha Norquist

Source: KKR

<< Back to Press Releases



Kristi Huller
Miles Radcliffe-Trenner
Julia Kosygina
Telephone: +1 (212) 750-8300



Annabel Arthur
Telephone: +44 20 7839 9800



Anita Davis
Wei Jun Ong
Telephone: +852 3602 7335


Investor Relations

‍Craig Larson
Telephone: +1 (877) 610-4910
Outside US: +1 (212) 230-9410
Facsimile: +1 (212) 750-0003