KKR, a leading global investment firm, today announced the release of “A New Foundation for Global Wealth: Rebuilding Portfolios for the New Regime” by Paula Campbell Roberts, Chief Investment Strategist for Private Wealth. This is the first release in Investing for Wealth, a planned series of notes focused on the evolving role of private markets assets in individual portfolios. Drawing on insights from the “Regime Change” series of notes on portfolio construction in a changing macroeconomic landscape, this piece explains in detail how integrating private markets investments can help address a variety of financial objectives.
“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 Private Real Estate more attractive to individual investors than ever before,” said Ms. Roberts. “Individuals will need to balance a number of personal considerations such as age, sources of income and life circumstances to find the right mix of these assets for their portfolios, which can be done with the help of a trusted financial advisor or private banker.”
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 Equities to 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 Public Equities.
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.
About Paula Campbell Roberts
Paula Campbell Roberts joined KKR in 2017 and is the Chief Investment Strategist for the firm’s Global Wealth Solutions business and a Managing Director on the Global Macro, Balance Sheet and Risk (GBR) team. Prior to joining KKR, Ms. Roberts was an economist at Morgan Stanley, providing views on the economy and the consumer sector to asset management clients. Before Morgan Stanley, Ms. Roberts was a management consultant leading case teams and advising Fortune 500 companies at Bain & Co. Ms. Roberts is one of fifteen members of the Federal Reserve Bank of New York’s Economic Advisory Panel and a Centennial Member of the Economic Club of New York. Learn more about Ms. Roberts 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 Paula Campbell Roberts 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 KKR, Ms. Roberts does not assume any duty to update such statements except as required by law.
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