Reinsurance as an asset class now deserves a place among KKR’s latest Capital Market Assumptions (CMAs), with the investment giant explaining that portfolio construction and private market assets are rising in importance, as a broad beta approach to investing is less appropriate at this stage of the economic, financial and capital market cycle.
“Expected returns are still moderately attractive, but they are becoming harder to capture across most asset classes,” Henry McVey, CIO of KKR’s Balance Sheet and Head of Global Macro and Asset Allocation (GMAA) writes in a new outlook report.
This is because tailwinds that drove the last investment cycle, of multiple expansion, falling rates and broad market beta are expected to be less reliable going forwards, with starting valuations less forgiving and less room for rates to fall than in the past.
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