KKR has released The Ultra High Net Worth Investor: Coming of Age, a new macro Insights piece by Henry H. McVey, KKR’s head of global macro and asset allocation, in collaboration with Jim Burns, head of the individual investor business for KKR.
The results are based on a proprietary survey of and interviews with more than 50 KKR ultra high net worth clients, including several family offices, to delve deeper into the key opportunities and challenges that the HNW market now faces.
The Ultra High Net Worth Investor: Coming of Age outlines a number of important trends:
- The average KKR ultra HNW investor surveyed has a much different profile than the average individual or institutional investor: Many are operating sizeable businesses, view investing more on an absolute return basis and value deal sourcing
- Ultra HNW accounts maintain a sophisticated approach to global asset allocation that tends to include a diversified, multi–asset class portfolio with a heavy weighting in alternatives
- In recent years, ultra HNW accounts have been earning strong returns, harnessing structural themes to their benefit, including:
- Embracing capital markets dislocation
- Being early to take advantage of a shifting landscape in the banking system
- Taking advantage of the illiquidity premium in areas like private credit and private equity to earn strong absolute returns
Some potential asset allocation “storm clouds” include:
- Current ultra HNW asset allocation positioning appears to make more sense for the environment we just left — and not necessarily for the one to which we could be headed
- Beyond potentially lower absolute returns, the Sharpe ratio, or return per unit of risk, could be poised to fall
- Many ultra HNW investors appear over-indexed to their local markets, the United States in particular
To read the full report, click here.