“Beyond compelling macroeconomic conditions that we now see creating a favorable environment for capital deployment, Asia has also emerged as an elegant play on some of our highest conviction investment themes, including corporate carve-outs, experiences over things, and the illiquidity premium,” Henry McVey said.
In his latest report, Henry McVey and his team outline the following investment conclusions from his most recent trip for the macro and asset allocation community:
|1.||Asia’s surging middle class, coupled with even stronger productivity trends, signal robust structural growth for the foreseeable future. Already, we estimate that China and its EM trading partners are on track to account for 60% or more of total global GDP growth.|
|2.||From a cyclical growth perspective, China’s nominal GDP growth appears to have already bottomed, which has important and positive implications for the way we view the Asian emerging markets story during the next three to seven years.|
|3.||We see Asia as a direct and compelling play on three of our global macro themes: de-conglomeratization, experiences over things, and the illiquidity premium within performing private credit.|
|4.||The biggest changes in Asia we see are not only the continued migration up the value-added ‘food chain’ across a variety of domestic industries but also the impact that technology is having on delivery of these higher value-added goods and services.|
|5.||Beyond strong growth in domestic demand stories, we also see more opportunities for allocators of capital to help Asian companies – both in developed and developing markets – expand abroad.|
“To be sure, Asia is not without its macro and geopolitical concerns. Nonetheless, if we are right about the aforementioned trends, then now is the time for multi-asset class investors to be ‘leaning in,’” said McVey.
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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 is Head of the Private Market and Balance Sheet Risk team. 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). Prior to that, he was a portfolio manager at Fortress Investment Group and chief U.S. investment strategist for Morgan Stanley. While at Morgan Stanley, Mr. McVey was also a member of the asset allocation committee, and the top ranked asset management and brokerage analyst by Institutional Investor for four consecutive years before becoming the firm's strategist. He earned his B.A. from the University of Virginia and an M.B.A. from the Wharton School of the University of Pennsylvania. Mr. McVey serves as co-chair of the TEAK Fellowship board of trustees and is a member of the Pritzker Foundation Investment Committee. He is also a member of the national advisory board for the Jefferson Scholarship at the University of Virginia and a member of the Council on Foreign Relations Corporate Leader Program.
KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit and, through its strategic partners, hedge funds. KKR aims to generate attractive investment returns 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 its partners' capital 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. L.P. (NYSE: KKR), please visit KKR's website at www.kkr.com and on Twitter @KKR_Co.
The views expressed herein are the personal views of Henry McVey of KKR and do not necessarily reflect the views of KKR. This information is not research and should not be treated as research. It does not represent valuation judgments with respect to any financial instrument, issuer, security or sector that may be described or referenced herein and does not represent a formal or official view of KKR. It is being provided merely to provide a framework to assist in the implementation of an investor's own analysis and an investor's own views on the topic discussed herein. There can be no assurance that an investment strategy will be successful. Historic market trends are not reliable indicators of actual future market behavior or future performance of any particular investment which may differ materially, and should not be relied upon as such. This information 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. References to a target portfolio and allocations are hypothetical allocation of assets and not reflect an actual portfolio. The views expressed herein and discussion of any target portfolio or allocations may not be reflected in the strategies and products that KKR offers or invests, including strategies and products to which Mr. McVey may provide investment advice to or on behalf of KKR. It should not be assumed that Mr. McVey has made or will make investment recommendations in the future that are consistent with the views expressed herein, or use any or all of the techniques or methods of analysis described herein in managing client or proprietary accounts. This release may contain projections or other forward‐looking statements. Neither KKR nor Mr. McVey assumes any duty to update such statements.