KKR Releases “An Alternative Perspective: Past, Present, and Future”
KKR, a global investment firm, has released a new report titled 'An Alternative Perspective: Past, Present, and Future' by Henry McVey, CIO of KKR's Balance Sheet and Head of Global Macro and Asset Allocation. The report explores the evolution of the Private Alternatives market and its potential for future growth. Key points include:
1. The importance of disciplined portfolio construction in the Alternatives industry.
2. The potential for Private Alternatives to help address the $70 trillion global retirement savings shortfall.
3. Projections that the Private Alternatives market will exceed $24 trillion by 2028.
4. Factors driving growth, including increased allocations from Sovereign Wealth Funds, individual investors, insurance balance sheets, and Asian markets.
5. Expansion of Private Equity and Private Credit offerings.
6. The role of private capital in financing the global energy transition.
The report also discusses industry trends, return and risk benefits of Private Alternatives strategies, and potential risks affecting these asset classes.
KKR, una società di investimento globale, ha pubblicato un nuovo rapporto intitolato 'Una Prospettiva Alternativa: Passato, Presente e Futuro' a cura di Henry McVey, CIO del Bilancio di KKR e Responsabile del Macro Globale e Allocazione degli Attivi. Il rapporto esplora l'evoluzione del mercato delle Alternative Private e il suo potenziale di crescita futura. I punti chiave includono:
1. L'importanza di una costruzione disciplinata del portafoglio nell'industria delle Alternative.
2. Il potenziale delle Alternative Private per aiutare a risolvere il deficit globale nei risparmi pensionistici di $70 trilioni.
3. Le proiezioni indicano che il mercato delle Alternative Private supererà i $24 trilioni entro il 2028.
4. I fattori che guidano la crescita, inclusi maggiori allocazioni da Fondi Sovrani, investitori individuali, bilanci assicurativi e mercati asiatici.
5. L'espansione delle offerte di Private Equity e Private Credit.
6. Il ruolo del capitale privato nel finanziare la transizione energetica globale.
Il rapporto discute anche le tendenze del settore, i benefici in termini di rendimento e rischio delle strategie di Alternative Private e i potenziali rischi che influenzano queste classi di attivi.
KKR, una firma de inversión global, ha publicado un nuevo informe titulado 'Una Perspectiva Alternativa: Pasado, Presente y Futuro' por Henry McVey, CIO del Balance General de KKR y Jefe de Macro Global y Asignación de Activos. El informe explora la evolución del mercado de Alternativas Privadas y su potencial de crecimiento futuro. Los puntos clave incluyen:
1. La importancia de una construcción de cartera disciplinada en la industria de Alternativas.
2. El potencial de las Alternativas Privadas para ayudar a abordar el déficit global de ahorros para la jubilación de $70 billones.
3. Proyecciones de que el mercado de Alternativas Privadas superará los $24 billones para 2028.
4. Factores que impulsan el crecimiento, incluidas mayores asignaciones de Fondos Soberanos, inversores individuales, balances de seguros y mercados asiáticos.
5. Expansión de las ofertas de Private Equity y Private Credit.
6. El papel del capital privado en financiar la transición energética global.
El informe también discute tendencias de la industria, beneficios de rendimiento y riesgo de las estrategias de Alternativas Privadas, y los riesgos potenciales que afectan a estas clases de activos.
KKR는 글로벌 투자 회사로서 '대안적 관점: 과거, 현재, 미래'라는 제목의 새로운 보고서를 출시했습니다. 이 보고서는 KKR의 자산 배분 최고 책임자(CIO)인 Henry McVey가 작성하였습니다. 이 보고서는 사적 대안 시장의 발전과 미래 성장 가능성을 탐구합니다. 주요 내용은 다음과 같습니다:
1. 대안 산업에서의 체계적인 포트폴리오 구축의 중요성.
2. $70조에 달하는 글로벌 퇴직 연금 부족 문제를 해결하기 위한 사적 대안의 잠재성.
3. 2028년까지 사적 대안 시장이 $24조를 초과할 것이라는 전망.
4. 주권 Wealth Fund, 개인 투자자, 보험 기금 및 아시아 시장의 할당 증가 등 성장 요인.
5. 사모펀드 및 사적 신용 상품의 확장.
6. 글로벌 에너지 전환을 위한 자본 사적 자본의 역할.
이 보고서는 또한 산업 동향, 사적 대안 전략의 수익 및 위험 혜택, 그리고 이러한 자산 클래스에 영향을 미치는 잠재적 위험에 대해 논의합니다.
KKR, une société d'investissement mondiale, a publié un nouveau rapport intitulé 'Une Perspective Alternative : Passé, Présent et Futur' par Henry McVey, CIO du bilan de KKR et responsable de la macroéconomie mondiale et de l'allocation d'actifs. Le rapport explore l'évolution du marché des alternatives privées et son potentiel de croissance future. Les points clés incluent :
1. L'importance d'une construction de portefeuille disciplinée dans l'industrie des alternatives.
2. Le potentiel des alternatives privées à contribuer à combler le déficit global d'épargne de retraite de 70 billions de dollars.
3. Les projections selon lesquelles le marché des alternatives privées dépassera les 24 billions de dollars d'ici 2028.
4. Les facteurs qui stimulent la croissance, y compris les allocations accrues des fonds souverains, des investisseurs individuels, des bilans d'assurance et des marchés asiatiques.
5. L'expansion des offres de capital-investissement et de crédit privé.
6. Le rôle du capital privé dans le financement de la transition énergétique mondiale.
Le rapport aborde également les tendances du secteur, les avantages en termes de rendement et de risque des stratégies d'alternatives privées et les risques potentiels affectant ces classes d'actifs.
KKR, eine globale Investmentfirma, hat einen neuen Bericht mit dem Titel 'Eine Alternative Perspektive: Vergangenheit, Gegenwart und Zukunft' von Henry McVey, CIO von KKR's Bilanz und Leiter von Global Macro und Asset Allocation, veröffentlicht. Der Bericht untersucht die Entwicklung des Marktes für Private Alternatives und dessen Potenzial für zukünftiges Wachstum. Wichtige Punkte sind:
1. Die Bedeutung einer disziplinierten Portfoliokonstruktion in der Alternativen Branche.
2. Das Potenzial von Private Alternatives, das globale Rentenersparnisdefizit von 70 Billionen Dollar zu adressieren.
3. Prognosen, dass der Markt für Private Alternatives bis 2028 24 Billionen Dollar überschreiten wird.
4. Faktoren, die das Wachstum antreiben, einschließlich erhöhter Zuweisungen von Staatsfonds, individuellen Investoren, Versicherungsgesellschaften und den asiatischen Märkten.
5. Expansion der Angebote von Private Equity und Private Credit.
6. Die Rolle von privatem Kapital bei der Finanzierung des globalen Energiewandels.
Der Bericht bespricht auch Branchentrends, Rendite- und Risiko-Vorteile von Private Alternative Strategien sowie potenzielle Risiken, die diese Anlageklassen betreffen.
- KKR projects the Private Alternatives market to surpass $24 trillion by 2028
- Sovereign Wealth Funds have increased exposure to private markets from 16% in 2016 to 26% in 2024
- An additional $1 trillion in retail assets could be invested in Alternatives over the next five years
- Asia is the fastest-growing region for Private Alternatives globally
- Expansion of Private Credit beyond Direct Lending, including growth in Asset-Based Finance
- Scale in the Alternatives industry does not guarantee superior performance
- The Alternatives industry needs to evolve to ensure above-average performance
Insights
This report from KKR provides valuable insights into the evolution and future prospects of the Private Alternatives market. Key takeaways include:
- The Private Alternatives market is expected to surpass
$24 trillion by 2028, driven by increased allocations from sovereign wealth funds, individual investors and insurance companies. - Asia is highlighted as the fastest-growing region for Private Alternatives globally.
- The report emphasizes the importance of disciplined portfolio construction, including consistent deployment pacing, vintage diversification and managing concentration and liquidity risks.
- Private Alternatives are seen as potential solutions to address the global retirement savings shortfall, estimated at
$70 trillion . - Emerging trends include the segmentation of Private Equity, expansion of Private Credit and the rise of "insurance as an asset class."
While this report doesn't provide specific financial figures for KKR, it demonstrates the firm's thought leadership in the alternative investments space and positions them well to capitalize on the projected growth in this sector. For investors, this signals potential long-term growth opportunities in KKR's business as the alternative investments market expands.
New Report Highlights the Private Alternatives Sector’s Expansion Beyond Private Equity and Potential for Future Growth
In the report, McVey and his team chart the evolution of the Private Alternatives market from its cottage industry roots in the 1970s to today’s sizeable global footprint. They also discuss why they believe disciplined portfolio construction is critical to ensuring that the Alternatives industry can deliver compelling returns as it continues to grow and scale. As such, they emphasize the importance of consistent deployment pacing and vintage diversification, managing concentration and liquidity risk, and understanding sector and factor biases.
“As we look ahead, we think that the future of Alternatives is a bright one, with many areas of opportunity for growth. However, we strongly believe that the Alternatives industry needs to evolve in several areas to ensure that it fulfills its promise to deliver above-average performance. Scale begets scale, but it does not guarantee superior performance. We think that sharpening one’s understanding of portfolio construction with and without Alternatives, and across the different categories of such investments, will be increasingly essential to building robust portfolios for the decades ahead,” said McVey.
McVey and his team discuss how Private Alternatives can help to close the global gap in retirement savings shortfalls, which the World Economic Forum currently estimates to be around
-
Further growth in allocations from Sovereign Wealth Funds, which have already increased exposure to private markets from around
16% in 2016 to around26% in 2024. -
Individual investors increasingly embracing the use of Alternatives, with estimates suggesting that an additional
$1 trillion - Growing appetite from insurance balance sheets as CIOs increasingly focus on leveraging both liquid and illiquid allocations to build more resilient, ‘all-weather’ portfolios.
-
Rising private market demand in
Asia , which is the fastest growing region for Private Alternatives globally. - The segmentation of Private Equity into more targeted offerings that appeal to a greater number of allocators and result in greater flows into the asset class.
- The expansion of Private Credit beyond Direct Lending, including the growth of Asset-Based Finance.
- The need for private capital to finance the global energy transition, including renewable energy development and brown-to-green transformations.
- New product innovation expanding the definition of the Alternatives market, including the rise of “insurance as an asset class,” which enables direct investments into reinsurance deals.
In addition to the above insights on growth and portfolio construction, the report also reflects on trends in the Private Alternatives industry, sheds light on the different return, risk, and diversification benefits of Private Alternatives strategies, and discusses the potential risks that could affect these asset classes.
- To read the latest Insights, click here.
- To read the 2024 Macro Mid-Year Global Macro Outlook, click here.
- For an archive of previous publications please visit https://www.kkr.com/insights.
About Henry McVey
Henry H. McVey joined KKR in 2011 and is Head of the Global Macro, Balance Sheet and Risk team. Mr. McVey also serves as Chief Investment Officer for the Firm’s Balance Sheet, oversees Firmwide Market Risk at KKR, and co-heads KKR’s Strategic Partnership Initiative. As part of these roles, he sits on the Firm’s Global Operating 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 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 Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.
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 manages or offers. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be relied on in making an investment decision or any other decision. This release is prepared solely for information purposes and should not be viewed as a current, past or future recommendation or a solicitation of an offer to buy or sell any securities or to adopt any investment strategy. This release contains 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.
1 World Economic Forum – Longevity Economy: Financial Resilience for Every Generation
View source version on businesswire.com: https://www.businesswire.com/news/home/20240925307986/en/
Media:
Julia Kosygina
212-750-8300
media@kkr.com
Source: KKR
FAQ
What is the projected size of the Private Alternatives market by 2028 according to KKR's report?
How has Sovereign Wealth Funds' exposure to private markets changed from 2016 to 2024?
What is the estimated additional retail investment in Alternatives over the next five years?
Which region is the fastest-growing for Private Alternatives globally, according to KKR?
What role does KKR see for private capital in the global energy transition?
