Name: Compounding '8th Wonder of the World': KKR's McVey
Uploaded: 2026-09-18T19:18:24+00:00
Duration: 498 s

Speakers

Henry McVey — KKR Global Macro and Asset Allocation Head

Tom Keene — Host, Bloomberg Surveillance

Scarlet Fu — Anchor, Bloomberg Television

Summary

Henry McVey of KKR argues markets are in a regime change marked by higher inflation, wider deficits, geopolitics, and positive stock-bond correlation. He favors private markets/private equity, real assets, infrastructure, and credit up in the capital structure, while preferring equities over government bonds. He also sees corporate reform opportunities in Japan and Korea and warns about 2021-vintage private equity and software deals.

McVey says the post-COVID regime features higher inflation, bigger deficits, geopolitics, and messy energy/bond transitions.
He argues stocks and bonds are now positively correlated, weakening traditional diversification.
KKR favors private equity for operational alpha and long-term compounding, including in individual retirement portfolios with guardrails.
He warns 2021-vintage private equity, especially software deals, faces elevated borrowing costs.
He favors real assets, infrastructure, and credit higher in the capital structure.
He prefers equities over government bonds as an inflation hedge.
He sees corporate reform opportunities in Japan and Korea and notes US investor concentration.
He discusses private-market education, liquidity guardrails, and retirement security.

Ideas

Henry McVey KKR Global Macro and Asset Allocation Head 1:11

Private equity offers long-term compounding alpha.

Private equity and private markets can deliver long-term compounding and operational alpha by improving portfolio companies, not simply by buying market beta. KKR owns about 200 companies and shares best practices across them. For individual investors, a small, long-term allocation in retirement accounts makes sense because private equity relies on an illiquidity premium, typically requiring a 5-to-10-year horizon, but it should be deployed gradually with education, sensible guardrails, and diversification.

Henry McVey KKR Global Macro and Asset Allocation Head 2:05

Avoid 2021-vintage private-equity software deals.

A cohort of private equity deals underwritten in 2021, especially software deals bought at high prices, will be a problem as borrowing costs stay elevated; investors should diversify across vintages rather than overconcentrate in that vintage.

Henry McVey KKR Global Macro and Asset Allocation Head 5:05

Real assets benefit from inflation regime.

In a regime with a higher inflation resting heart rate and positive stock-bond correlation, real assets become more valuable in a portfolio. KKR has increased real assets as part of its response to this regime shift.

Henry McVey KKR Global Macro and Asset Allocation Head 7:06

Japan and Korea corporate reform opportunities.

Corporate reform in Japan and Korea is creating investment opportunities, and KKR is doing a lot in Asia, particularly Japan. He notes most individual investors are highly concentrated in the U.S., implying they should consider diversifying into these reform-driven markets.

Henry McVey KKR Global Macro and Asset Allocation Head 7:24

Infrastructure benefits from public-to-private shift.

Global infrastructure is a big KKR theme because the public sector is increasingly handing infrastructure projects to the private sector. This creates a large investable opportunity in private infrastructure.

Henry McVey KKR Global Macro and Asset Allocation Head 7:33

Equities beat government bonds amid inflation.

With a higher inflation resting heart rate and stocks and bonds positively correlated, equities are a better inflation hedge than government bonds. He is inclined to own stocks over bonds and is trimming government bond holdings.

Henry McVey KKR Global Macro and Asset Allocation Head 7:33

Equities beat government bonds amid inflation.

Compounding '8th Wonder of the World': KKR's McVey

Summary

Ideas

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