KKR
Global macro and private markets insights, including Henry McVey's research.
United States25 articlesLast published 26 Sep 2023
AlternativesPrivate MarketsMulti-Asset
Research
KKRPrivate Markets
Crunch Time: How a Real Estate Credit Crunch Could Benefit Investors| KKR
KKR's real estate team analyzes the root causes of the commercial real estate debt pullback following rate shocks, examining the role of regional bank stress and reduced lending capacity. The piece argues that the resulting credit scarcity creates a once-in-a-decade opportunity for non-bank lenders and well-capitalized equity buyers, particularly as ~$1 trillion in CRE loans mature in 2023–2024.
26 Sep 2023
KKRPrivate Markets
Insights on Recovery: Is Inflation Coming? | KKR
KKR's Daniel Pietrzak examines revenue growth trends across nearly 300 borrowers in KKR's global private credit portfolio, noting a sharp post-COVID recovery amid unprecedented monetary stimulus. The piece outlines KKR's inflation outlook, the impact of rising prices on borrowers, and why credit investors should reconsider their allocations in light of emerging inflationary pressures.
26 Sep 2023
KKRFixed Income
The LIBOR Transition Is Running Behind: Here's Why it Matters to Borrowers and Lenders | KKR
KKR's Tal Reback warns that as of end-2022 only ~21% of the syndicated loan market had transitioned to SOFR, leaving a significant backlog of lower-rated, discounted loans still on LIBOR ahead of the June 30, 2023 deadline. The piece outlines the risks for borrowers and lenders from delayed transition, notes that CLO conversions are also stalled, and provides KKR's rate outlook with a projected fed funds peak of 5.125%.
26 Sep 2023
KKRFixed Income
Great Market Expectations: Insights on the Return of Volatility in Credit Markets| KKR
KKR's credit team examines the January 2022 spike in credit market volatility, highlighting the divergence between market expectations and reality across investment grade, high yield, leveraged loans, and CCC-rated credits. The piece identifies six key themes including duration risk in IG, the bonds-loans decoupling, the LIBOR-to-SOFR transition, and emerging opportunities in Asia credit and capital solutions.
26 Sep 2023
KKRFixed Income
Navigating Market Volatility: Adapting to Changing Conditions | KKR
KKR's credit team assesses Q1 2022 market conditions, highlighting how inflationary pressures, Fed rate hikes, and the Russia-Ukraine war have driven volatility across public credit, equities, and private markets. The piece argues that technical headwinds rather than fundamental deterioration are driving spread dispersion, and that the dislocation in public credit is accelerating deal flow into private credit markets.
26 Sep 2023
KKRFixed Income
Seizing Opportunities in Credit Markets |KKR
KKR's credit team assesses the elevated volatility and macroeconomic headwinds of mid-2022, arguing that public markets have largely priced in prevailing risks while private credit remains comparatively resilient. The authors identify attractive entry points across both public and private credit, emphasising the importance of a multi-strategy, disciplined credit toolkit amid a technically recessionary US economy and persistent rate rises.
26 Sep 2023
KKRPrivate Markets
KKR Private Credit ESG 2.0: Advancing Sustainability and Growth | KKR
KKR outlines its proprietary "ESG Credit 2.0" framework, developed in 2021 and embedded into its $73 billion private credit underwriting process, which uses a materiality-based ESG scorecard, UN SDG alignment analysis, ESG due diligence rights, and KPI-linked incentives in finance documents. The paper addresses the particular disclosure challenges of private credit markets and positions the framework as a systematic, repeatable process for surfacing ESG risk and identifying sustainable investment opportunities.
26 Sep 2023
KKRFixed Income
A Crisis of Confidence | KKR
KKR's credit team examines how the Federal Reserve's aggressive rate-hiking cycle has eroded confidence across credit markets, tracing fault lines through the banking system, interest rates, and capital markets. The paper also analyzes a structural shift away from leveraged loans toward high yield and private credit, and identifies opportunities arising from the confidence vacuum.
26 Sep 2023
KKRFixed Income
How the Hunt for Capital Helps the Case for Credit over Equities | KKR
KKR's credit team argues that tighter financial conditions and the shift from a "Hunt for Yield" to a "Hunt for Capital" make credit a superior near-term risk/return proposition versus equities, citing higher yields, seniority in the capital structure, contractual returns, and pressure on equity valuations from elevated rates. The piece reviews Q4 2022 credit market disruptions—including Fed rate hikes and the UK pension crisis—and advises a measured, "jogging pace" approach to deploying capital as markets begin to reopen.
26 Sep 2023
KKRMulti-Asset
Consumer Trade Offs: Navigating Consumer Decision Making | KKR
KKR's macro team analyzes the outlook for U.S. personal consumption amid sticky inflation, declining real disposable income, and post-COVID behavioral shifts, expecting a material slowdown over the next 12 months. The piece identifies key pressure points by income cohort and highlights constructive themes including rentership, vehicle maintenance, personal care, services rebound, WFH renovation, ESG, and value.
26 Sep 2023
KKRPrivate Markets
Privy: Accelerating Indonesia’s Digital Transformation | KKR
KKR announces its lead investment in Privy's Series C funding round, highlighting the company's position as Indonesia's leading digital trust platform offering digital identity, e-signatures, and eKYC solutions to over 30 million users and 1,800 enterprises. The piece contextualizes the investment within KKR's Asia New Generation Technology strategy, citing Indonesia's projected $300 billion digital economy by 2030 as a key macro driver.
26 Sep 2023
KKRMulti-Asset
Still Keeping It Simple: Mid-Year Update 2023 | KKR
KKR's macro team presents its mid-year 2023 outlook, arguing that the S&P 500 bottomed in October 2022 and that investors remain too conservatively positioned, favouring lending, infrastructure, asset-based finance, and thematic private and public equity. The piece outlines key divergences from consensus, including above-consensus U.S. GDP growth, a structural inflation "regime change," higher long-term yields, and a prolonged regional banking stress tied to commercial real estate exposure.
26 Sep 2023
KKRMulti-Asset
2022 Outlook: A Different Kind of Recovery | KKR
KKR's macro team presents their 2022 investment outlook, arguing that four decades of disinflation are giving way to reflation, with U.S. CPI forecast at 5.0% versus consensus of 3.6%, and the S&P 500 projected to reach 4,900 on ~15% EPS growth. They maintain an overweight on global equities and select real assets, contending that the accumulated stock of G4 central bank liquidity (~$12.8 trillion) will outweigh the tightening cycle, while favouring thematic, complexity-oriented strategies across private equity, infrastructure, and commodities linked to the energy transition.
26 Sep 2023
KKRMulti-Asset
2021 Mid-Year Update: Same As It Ever Was| KKR
KKR's mid-year 2021 macro outlook argues that the post-pandemic recovery marks a structural regime shift away from the 2009–2019 playbook, driven by six factors including expansionary fiscal policy, average inflation targeting, supply-chain cost pressures, and the inflationary nature of the energy transition. The authors contend that pricing power and collateral-based cash flows become critical portfolio differentiators, and recommend a theme-based asset allocation approach as nominal GDP growth is expected to outpace nominal profit growth over the coming decade.
26 Sep 2023
KKRMulti-Asset
State of Play: Navigating structural shifts in economics and geopolitics | KKR
KKR's macro team argues that the Russia-Ukraine war has accelerated pre-existing structural regime shifts—sticky broad-based inflation, supply chain splintering, and geopolitical polarization—that compound an already late-cycle environment. The piece lowers global GDP forecasts, raises U.S. and European CPI targets to 7.0% and 6.0% for 2022, and advocates overweighting collateral-based cash flows (Infrastructure, Real Estate, Asset-Based Finance) and opportunistic Credit while reducing high-beta growth equity exposure.
26 Sep 2023
KKRFixed Income
Credit Royale: Reigning in Opportunities in Credit Markets | KKR
KKR's credit team examines the structural evolution of credit markets over the past 15 years as of Q4 2021, highlighting increasing fragmentation, concentration of constraints, and reduced flexibility across the credit landscape. The authors argue that investors require greater connectivity and cross-market intelligence to navigate an increasingly siloed credit environment in the post-pandemic era.
26 Sep 2023
KKRAlternatives
Insights from KKR's Global Insurance Survey 2021| KKR
KKR surveyed more than 50 global insurance CIOs overseeing nearly $7 trillion in AUM to assess how the industry is adapting its investment strategies in a persistent low/negative real rate environment. The report identifies six key themes, including an intensifying search for yield, a continued shift toward non-traditional and illiquid assets (now ~one-third of portfolios), and the growing importance of scale, technology, and portfolio construction expertise for competitive success.
26 Sep 2023
KKRPrivate Markets
Unlocking Potential: Private Junior Debt Opportunities in 2023 | KKR
KKR Credit argues that despite muted capital markets activity, private junior debt opportunities are emerging in early 2023, driven by sponsor-led buyouts, debt refinancing needs from rising base rates, and add-on acquisition financing. The firm highlights attractive economics—spreads of ~10% over reference rates with original issue discounts and call protection—and favors deploying junior capital in larger companies with ~$500M average EBITDA, anticipating the next two years could represent a "golden vintage" for the asset class.
26 Sep 2023
KKRMulti-Asset
The Labor Market in Transition: Navigating Change Successfully | KKR
KKR's macro team argues that the U.S. labor market faces a structural—not cyclical—shortfall of approximately 2.1 million workers, driven by pandemic-era retirements, immigration decline, and shifting workforce participation, which will sustain a higher resting rate of inflation. The authors recommend that allocators shorten fixed income duration and increase exposure to inflation-protective assets such as real estate, infrastructure, and opportunistic strategies with strong pricing power.
26 Sep 2023
KKRMulti-Asset
Asian Market Insights for Businesses and Investors | KKR
KKR's Henry McVey and macro team share on-the-ground observations from visits to Japan and China in April 2023, highlighting divergent economic conditions across Asia including labor dynamics, the energy transition, and "security of everything" themes. The piece argues that stronger Asian growth—particularly China's above-consensus GDP recovery—provides a partial offset to tightening financial conditions in the West, while advocating for increased deployment into alternatives as a new investing regime takes hold.
26 Sep 2023
KKRPrivate Markets
The Expansion of Asset-Based Finance
KKR examines the structural growth of the private asset-based finance (ABF) market, which stood 67% larger at end-2022 than in 2006 and is projected to expand from $5.2 trillion to $7.7 trillion by 2027. The paper argues that higher inflation, bank pullback amid rising rates, and banking-sector volatility are structural tailwinds that make private ABF an increasingly relevant allocation for institutional investors.
26 Sep 2023
KKRFixed Income
Credit Markets and Thriving in the Financial Jungle | KKR
KKR's credit team argues that credit offers more attractive relative value than equities over the medium term amid slowing growth and higher inflation, with yield and call protection as key differentiators. The piece outlines how investors should allocate within credit based on their individual risk tolerances, emphasizing that short-term volatility should not deter entry and that bottom-up analysis is essential to identify stressed sub-investment-grade issuers.
22 Sep 2023
KKRMulti-Asset
Insights on Europe's Economic Outlook and Investing Opportunities | KKR
KKR's Henry McVey and team revisit their European macro outlook following investor meetings in London, further trimming 2023 Eurozone GDP forecasts while noting that widespread bearish sentiment has largely priced in known headwinds such as the energy crisis, ECB tightening, and political instability. Despite cautioning against calling a bottom prematurely, the authors identify selective opportunities in dislocated European credit and equities, as well as structural themes including automation, digitalization, and the energy transition.
22 Sep 2023
KKRPrivate Markets
European Market Insights for Businesses and Investors | KKR
KKR's Henry McVey and Aidan Corcoran share macro observations from investor meetings in Frankfurt and London, covering Europe's sticky inflation, ECB rate trajectory (peak deposit rate of 3.75% by September 2023), and private market opportunities across the energy transition, infrastructure, and consumer services themes. Despite broadly negative investor sentiment, the authors argue Europe is outperforming expectations and remains a compelling destination for private markets capital, particularly given the illiquidity premium available to insurance and other long-duration allocators.
22 Sep 2023
KKRMulti-Asset
Insights From Our Mid-Year 2022 Update | KKR
KKR's macro team argues that markets have entered a structural regime change in which the traditional stock-bond negative correlation has broken down, making the 60/40 portfolio less effective as a diversifier. They recommend a cautious deployment stance, favouring credit over equities and public equity over private equity, while highlighting thematic opportunities in security, pricing power, decarbonisation, and collateral-based cash flows.
1 Jun 2022