Regime Change: The Role of Private Equity in the ‘Traditional’ Portfolio
March 15, 2023 | KKR
At KKR we still firmly believe that we have entered a different macroeconomic regime for investing, where the traditional relationship between stocks and bonds has changed. Against this backdrop, we think that new approaches to asset allocation should be considered. So, in our newest piece on portfolio construction, we focus on the role Private Equity can play in a diversified portfolio, and as part of this exercise, we look at the potential trade-offs different investors may want to consider as they think about optimizing returns across a variety of economic environments. Our punch line is that Private Equity, similar to Private Credit and Real Assets, can be quite additive to traditional investment portfolios, especially for investors who are concerned about inflation and/or do not face meaningful near-term liquidity constraints.
