KKR Releases “China: A Visit to the Epicenter” by Henry H. McVey
August 07 2018 - 6:59AM
Business Wire
New Macro Report Delves into Country in
Transition
KKR today announced the release of China: A Visit to the
Epicenter, a new macro Insights piece by Henry McVey, Head of
Global Macro and Asset Allocation (GMAA), wherein McVey and Frances
Lim, who leads the team’s efforts in Asia, provide their outlook on
China’s evolving role in the global economy.
“A recent trip to China reminded us why so many investors now
consider China the ‘epicenter’ of global macro trends,” Henry McVey
says. “In addition to accounting for nearly one-third of the global
growth, the country is also in a heated trade dispute with the
United States. Without question, it is not sitting idle, and we saw
visible signs of change in both monetary and fiscal policies during
our visit. Overall, we believe that the current trade wars will
only accelerate China’s shift away from an export economy dependent
on global trade towards a more self-reliant consumer services
economy that is gaining prominence, particularly within Asia.”
In this latest report, Henry McVey and Frances Lim delve into
the following four key areas of rapid change within the Chinese
economy that they believe are potentially most important for
investors to better understand:
- The escalation of trade barriers
between the U.S. and China and their undeniable attack on the
traditional global supply chain.
- Secular growth trends within the rising
Asian millennial generation, the Chinese one in particular.
- The evolution of e-commerce in China,
which is dramatically more abrupt than what is occurring in other
parts of the global economy.
- Diverging macro data trends in China.
While aggregate GDP statistics in China look fine, they are masking
major disparities that can be uncovered in the underlying sector
data.
From an investment standpoint, the report details how these
macro themes factor into the GMAA team’s support of capital
deployment in areas such as leisure, wellness, services
(environmental, healthcare, and financial), healthy food and food
safety. They also influence the team’s cautious view on branded
consumer goods, global supply chains, and logistic plays that do
not interface with the customer or can be disintermediated by the
growing influence of Baidu, Alibaba, and Tencent. Finally, the GMAA
team asserts now is the time to be thoughtful in terms of
allocating to globally integrated industries such as autos as well
as high-end technology.
Links to access this report 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 McVeyHenry 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,
oversees Firmwide Market Risk, and co-heads KKR’s Strategic
Partnership Initiative (KSPI). 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). Earlier in his career 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 was the top-ranked
asset management and brokerage analyst by Institutional Investor
for four consecutive years before becoming the firm's strategist in
January 2004. 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 is a member of the TEAK Fellowship Board of
Trustees after previously serving as co-chair of the board for five
years. Mr. McVey is also a member of the Pritzker Foundation
Investment Committee, a board member of the University of Virginia
Investment Management Company (UVIMCO), 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.
About KKRKKR is a leading global investment firm that
manages multiple alternative asset classes, including private
equity, energy, infrastructure, real estate and credit, with
strategic manager partnerships that manage hedge funds. KKR aims to
generate attractive investment returns for its fund investors 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 the
capital it manages for fund investors 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. 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 or
other advice nor is it to be relied on in making an investment or
other decision. 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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Media:KKRKristi Huller or Cara Major,
212-750-8300media@kkr.com
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