New KKR Global Insights Report Discusses Value Creation through Reflation

KKR today released a sequel to its 2021 Global Macro Outlook, “Another Voice,” by Henry McVey, Head of Global Macro and Asset Allocation (GMAA). In the new macro Insights piece, McVey and his team detail an increased conviction about the macro framework for 2021 and beyond, specifically delving into the topics of inflation and reflation.

“When we pull all the macro pieces together, we see a constructive environment for collateral-based cash flows where we get reflation without runaway inflation, as this synchronized global economic recovery continues to unfold,” said Henry McVey.

In the report, McVey updates the team’s macro and asset allocation framework to reflect the following conclusions:

• We are in the early stages of an economic recovery that will look quite different from that which occurred starting in 2009.

• Nominal growth will run above trend for the foreseeable future, driven by a stronger than expected consumer and a rebound in non-tech related capital expenditures.

• While cyclical inflation is expected, we do not believe a secular increase in inflation is upon us.

• We expect the value of the illiquidity premium to increase as real rates generally stay low, helping to suppress nominal rates too.

• From a portfolio construction perspective, we advocate for more of a cyclical bias that favors pricing power and is connected to global growth and hard assets.

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

• To read the latest Insights, click here.
• To download a PDF version, click here.
• For an archive of previous publications please visit www.KKRInsights.com

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 offers alternative asset management and 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 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 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.

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