KKR Releases 2017 Global Macro Outlook
January 11 2017 - 7:00AM
Business Wire
Henry McVey Prepares Investors for Year
Ahead as we undergo a Political and Economic “Paradigm
Shift”
KKR today released the 2017 Global Macro Outlook piece by Henry
McVey, Head of Global Macro and Asset Allocation (GMAA). In
“Paradigm Shift,” McVey outlines his investment perspective in
light of today’s ‘new’ macro reality.
“As we look ahead into 2017, we think that we are at a major
inflection point across the global capital markets. We view Donald
Trump’s ascendancy to the Presidency of the U.S. as confirmation of
a political and economic paradigm shift that started with Brexit
but is likely to continue for the foreseeable future, including
elections across Europe in 2017.”
Consistent with this view, the report cautions investors to now
expect to operate in a global macro environment where four
important trends are either reversing or shifting materially
relative to the past:
1. Fiscal policies are now favored over monetary ones
to stimulate growth
2. Deregulation over reregulation
3. Domestic agendas take precedence over global
ones
4. Heightened volatility spills over from the currency
markets to the interest rate markets
Overall, Henry McVey and the GMAA team believe that the
macroeconomic backdrop will likely be shifting from a
disinflationary, slower growth environment towards a
reflationary-directed one with less onerous near-term banking
regulation and fiscal targets. Importantly, though, this shift
towards more reflationary policies by many growth-starved countries
around the world is still largely an aspirational one, offset in
many instances by slowing trade, poor demographics, weak
productivity, and heavy debt burdens. As such, the GMAA team thinks
that the cross-currents of near-term reflationary stimulus
juxtaposed against the aforementioned structural macro headwinds
likely mean more volatility lies ahead for investors again in
2017.
In addition to the aforementioned themes, the report details
specific macro influences that factor into the GMAA team’s updated
asset allocation model for 2017.
Links to access this note 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.
- To download the KKR Insights app for
iOS click here, and for Android 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 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.
About KKR
KKR is a leading global investment firm that manages investments
across multiple asset classes including private equity, energy,
infrastructure, real estate, credit and 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 at the asset level. KKR invests
its own capital alongside its partners' capital and brings
opportunities to others 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 provides 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.
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