Kkr & Co. Inc. · NYSE:KKR
Kkr & — Investor Presentation (August 2023)
14 slides from Kkr &'s investor presentation, August 2023
Slide 1: Highlights from the Private Wealth Investment Playbook
Highlights from the PRIVATE WEALTH Investment Playbook AUGUST 2023
Slide 2: Important Information
Important Information The views expressed in this presentation are the personal views of the speaker and do not necessarily reflect the views of Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, "KKR") itself. This presentation is not research and should not be treated as research. T
Slide 3: Quarterly Takeaways
Quarterly Takeaways While inflation has abated, we remain in a new regime characterized by above average inflation and rates, as well 01 as slower, though positive real economic growth. Key drivers include the energy transition, labor shortages, as well as increased competition between nation states
Slide 4: Pandemic Has Catalyzed Four Tectonic Shifts For Investing
We Believe The Pandemic Has Catalyzed Four Tectonic Shifts That Have Profound Implications For Investing Major Shifts That Have Emerged From The Covid-19 Disruption And Russia’s Invasion Of Ukraine Shift from “Benign Accelerated Energy Globalization” to Transition “Great Power Competition” The Gre
Slide 5: The New Investing Environment
The New Investing Environment Implications For Asset Opportunities In Private New Macro Regime Allocation Assets • Higher Inflation • Lower Asset Class • Increased Importance Of Returns Alternatives • Higher Rates • Shifts In Asset Class • Real Assets/Private Credit • Slower Real Economic Correlatio
Slide 6: Traditional Asset Classes May Be Insufficient To Achieve Return Goals
Going Forward, Traditional Asset Classes May Be Insufficient To Achieve Return Goals • Over the past 10 years, 60/40 portfolios returned an average of ~8%. • To achieve close to that return over the next five years amid elevated inflation, higher borrowing costs, and slower real economic growth, inv
Slide 7: Investors Can Tilt Asset Class Exposure To Achieve Objectives
Relative to the Traditional 60/40 Portfolio, Investors Can Tilt Asset Class Exposure To Achieve Objectives • The incorporation of investor preferences is an integral step in the strategic asset allocation process. Investor Objectives Generate Income Reduce Volatility Boost Return Private Equity Priv
Slide 8: Alternative Asset Classes Can Help Generate Income, Reduce Volatility And Boost Returns
Alternative Asset Classes Can Help Investors Generate Income, Reduce Volatility And Boost Returns • Today, many investor portfolios still resemble the traditional 60/40 portfolio, but investors are increasingly looking to enhance their portfolios with Alternatives to achieve their investment objecti
Slide 9: Now May Be The Opportune Time As Leaning Into Dislocation Has Served Investors Well
Now May Be The Opportune Time As Leaning Into Dislocation Has Served Investors Well Historically • Following large market drawdowns, longer-term investors are generally rewarded for leaning into dislocations. • Fundamentals tend to trough after asset prices which means investors miss out on returns
Slide 10: Determining The Right Entry Point Is Important
Determining The Right Entry Point Is Important • Valuations for Alternatives have reset more than Large Cap Equities, which has created opportunities. Cross-Asset Valuation Percentiles (Relative to 20-year Average) More Expensive 100 Percentile Current Dec-2021 50th Percentile 100% 100% 96% 95% 96%
Slide 11: Quarterly Takeaways
Quarterly Takeaways While inflation has abated, we remain in a new regime characterized by above average inflation and rates, as well 01 as slower, though positive real economic growth. Key drivers include the energy transition, labor shortages, as well as increased competition between nation states
Slide 12: Appendix
Appendix
Slide 13: By The Numbers – Macro
By The Numbers – Macro Current as of June December 2023 Forecast 2023 (Base Case) As we see it, ERP at ~5.6% is elevated vs history, a S&P 500 4339 4350 contrarian indicator of strong future performance US 10 Year 3.70% 4.25% WTI Oil Price 70 75 But, even after recent credit spread compressio
Slide 14: By The Numbers – Portfolio Construction
By The Numbers – Portfolio Construction High Inflation Periods by Portfolio Return Volatility Sharpe Ratio △ vs. 60/40 % Liquid Asset Cash Yield Alts Enhanced – Generate Income 9.73% 10.77% 0.31 0.05 70% 6.20% Alts Enhanced – Reduce Vol 10.16% 11.06% 0.35 0.09 70% 5.81% Alts Enhanced – Boost Return