- KKR releases its 2025 Mid-Year Global Macro Outlook, maintaining a positive outlook despite market volatility.
- The report highlights investment opportunities in Private Equity, Credit, and Real Assets amidst ongoing global changes.
- Key forecasts include a surplus in oil markets and a continuation of low unemployment rates.
KKR, a prominent global investment firm, has published its 2025 Mid-Year Global Macro Outlook, authored by Henry McVey, the CIO of KKR's Balance Sheet and Head of Global Macro and Asset Allocation. The report, titled "Make Your Own Luck," offers an optimistic outlook on the future of the global markets despite a turbulent start to the year and anticipated market drawdowns.
McVey and his team highlight several key factors that they believe will drive market performance. These include attractive financial conditions, a global easing cycle, sustained productivity gains, and compelling investment themes. They emphasize the importance of focusing on assets that can adapt to rising costs and enhance operational improvements.
The report suggests tilting investments towards assets with collateral-based cash flows. Highlighted areas of interest include control positions in Private Equity, senior slices of Credit, and Real Assets with inflation-linked contracts. KKR believes that these investment themes will benefit from the ongoing "Regime Change" framework.
Among the forecasts, the report predicts a significant productivity cycle reminiscent of the 1990s, potential surpluses in the oil market leading to WTI prices averaging $60 per barrel, and a lower unemployment rate prolonging economic expansion. Furthermore, KKR foresees Europe performing strongly due to factors like increased infrastructure spending and a resilient euro.
For individual investors, the report offers insights into asset allocation picks, expected returns, and model portfolios designed to outperform in the current environment. The report also discusses global economic forecasts, inflation, interest rates, and capital markets, providing a comprehensive overview of the current investment landscape.
KKR & Co. Inc. (KKR, Financial) continues to emphasize the importance of strategic investments amidst fiscal constraints, particularly in Private Equity and Infrastructure sectors, indicating a wealth of opportunities for investors willing to "make their own luck" in a changing global economy.
