Global Wealth Investment Playbook (Kohlberg Kravis Roberts)

Summary

• KKR forecasts US real GDP growth of 2.3% for 2026e with inflation at 3.5% and a 10-year government bond yield ending at 5.1%.p.5
• Technology and technology-adjacent sectors represent 36% of the S&P 500 total market capitalization.p.11
• High-net-worth individuals in the U.S. allocated 9.6% of their portfolios to alternative investments in 2024.p.17
• A balanced model portfolio allocates 30.0% to private markets, including 7.5% in private equity, 7.5% in private infrastructure, and 5.0% in direct lending.p.31

Key insights

1. Since the launch of ChatGPT, S&P 500 inflation-adjusted revenue per worker increased by ~8% after two decades of zero growth.p.10
2. Historical model allocations show that adding a 30% private equity sleeve to a 60/40 baseline increases annual returns from 6.3% to 8.7%.p.14
3. Rebalancing a traditional 60/40 portfolio with a 30% private markets sleeve improved 10-year annualized return by 0.8% while reducing volatility by -1.0%.p.18
4. Private infrastructure delivered strong downside protection during equity downturns from 1998 to 2024, averaging positive 5% returns during equity down years.p.26
5. Private credit defaults remain concentrated in lower middle-market companies with $0-25m EBITDA, reaching 18% compared to 2.4% for companies with $50m to $100m+ EBITDA.p.27