Henry McVey: Stay the Course and ‘Make Your Own Luck’

KKR, a leading global investment firm, today released its 2025 Mid-Year Global Macro Outlook by Henry McVey, CIO of KKR’s Balance Sheet and Head of Global Macro and Asset Allocation (GMAA).

In “Make Your Own Luck,” McVey and his team explain why, despite the turbulent start to 2025 and additional expected market drawdowns, they remain positive in their outlook. They note their strong belief that attractive financial conditions, a global easing cycle, ongoing productivity gains, and lack of net issuance—coupled with compelling, powerful investment themes—will drive this cycle both further and longer than many think. And, while they acknowledge that the low rate, low volatility beta trade that defined 2015-2021 is now over, they advocate that investors stay the course by leveraging the team’s long-standing Regime Change framework and investing behind priority macro trends.

Against this backdrop, the team suggests investors ‘make their own luck’ by tilting towards assets that rely on collateral-based cash flows, can adjust to rising input costs, and/or enhance operational improvement—like control positions with operational upside in Private Equity, senior slices of Credit amid wide dispersions, or Real Assets with long-dated, inflation-linked contracts that can reprice alongside rising nominal GDP.

The report also examines what has remained constant and what has shifted in the team’s thinking since their 2025 Outlook published last December. Consistent with prior thinking, the team believes we continue to see a stellar technical backdrop, capital markets responding favorably to a global easing cycle, and sustained positive earnings momentum despite tariff-induced uncertainty.

McVey and his team also share updated asset allocation picks and pans, refreshed expected return forecasts, and new model portfolios they believe are well-positioned to outperform in the continued Regime Change environment. They make several out-of-consensus calls, which include their beliefs that:

• The technical picture remains much better than investors think—net issuance of IPOs, levered loans, and high yield remain at levels not seen since 2009.
• We are in a productivity cycle similar to the 1990s, which will drive markets longer and higher than consensus.
• Lower taxes, higher margins, and higher quality earnings all suggest U.S. markets are reasonably valued vs. overvalued.
• Europe will perform better for longer, amid a stronger euro, more defense and infrastructure spending, continued interest in renewables, deeper capital markets, and less onerous cross-border restrictions.
• The oil market will move into larger surpluses over the next six to 12 months, driving WTI oil prices back down to $60 per barrel on average in the second half of 2025 and 2026.
• The unemployment rate will stay lower for longer relative to prior cycles, even against a modest payroll backdrop with gains increasingly concentrated in just a few sectors.
• Private Equity will remain a top-performing asset class as it continues to benefit from dispersion and control, allowing investors to lean into operational improvement and accretive M&A activity.
• There is increased opportunity for private investment in Infrastructure due to government retrenchment amid fiscal constraints, energy transition needs, and geopolitical competition.

In addition, the report details the GMAA team’s updated views on global economic forecasts, inflation, interest rates, currencies, and capital markets. The report also addresses key investor queries on topics such as how Europe can improve its competitive positioning, the team’s outlook for expected returns, and their latest thinking on relative value in Credit and the potential direction of individual retirement accounts (401(k), annuities, etc.).

Links to access this report in full as well as an archive of Henry McVey's previous publications follow:

• To read the full report, click here.
• For an archive of previous publications please visit https://www.kkr.com/insights.

About Henry McVey

Henry H. McVey joined KKR in 2011 and is Head of the Global Macro, Balance Sheet and Risk team. Mr. McVey also serves as Chief Investment Officer for the Firm’s Balance Sheet, oversees Firmwide Market Risk at KKR, and co-heads KKR’s Strategic Partnership Initiative. As part of these roles, he sits on the Firm’s Global Operating Committee and the Risk & Operations Committee. Prior to joining KKR, Mr. McVey was a Managing Director, Lead Portfolio Manager and Head of Global Macro and Asset Allocation at Morgan Stanley Investment Management (MSIM). Learn more about Mr. McVey here.

About KKR

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.

The views expressed in the report and summarized herein are the personal views of Henry McVey of KKR and do not necessarily reflect the views of KKR or the strategies and products that KKR manages or offers. Nothing contained herein constitutes investment, legal, tax or other advice nor is it to be relied on in making an investment decision or any other decision. This release is prepared solely for information purposes and should not be viewed as a current, past or future recommendation or a solicitation of an offer to buy or sell any securities or to adopt any investment strategy. This release contains forward-looking statements, which are based on beliefs, assumptions and expectations that may change as a result of many possible events or factors. If a change occurs, actual results may vary materially from those expressed in the forward-looking statements. All forward-looking statements speak only as of the date such statements are made, and neither KKR nor Mr. McVey assumes any duty to update such statements except as required by law.

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