Capital Group and KKR, leading global investment firms, announced an exclusive strategic alliance to offer investors new ways to incorporate alternative investments into their portfolios. Capital Group and KKR aim to offer hybrid public-private market investment solutions to investors across multiple asset classes, geographies and channels. The first two strategies are public-private bond offerings designed for financial professionals and their clients and are expected to launch in the U.S. in 2025.
“Capital Group sees a real opportunity to provide our clients with public-private hybrid market solutions,” said Capital Group’s president and CEO. Mike Gitlin“For more than 90 years, we have been committed to providing our clients with long-term excess returns. $2.6 trillion Among them $500 billion KKR is a public bond investment firm. $500 billion Experience in asset management, $200 billion In credit, we believe we can combine our respective areas of expertise to create strategies that are more liquid than private credit alone can provide, helping our clients achieve their objectives.”
While alternative investments have been available to high net worth individuals and accredited investors for some time, mass affluent investors, who represent more than 40 percent of the global wealth market, have not previously had access to this asset class. The combination of 1 Capital Group and KKR will enable more financial professionals and their clients to access alternative investments as part of their portfolios.
Gitlin added, “We will offer our clients strategies from premium alternative managers at competitive fees and more accessible price points. Clients can think of this as the ‘best of both worlds’ – a hybrid investment solution that combines Capital’s active management and long-term investment approach with KKR’s private markets expertise. We enter this market in strategic partnership with KKR with long-term plans and ambitions. We have listened to our clients’ needs and are confident that this is not just a product launch, but the seed of a new platform.”
Global assets in alternative investments have grown significantly over the past 20 years, and personal assets invested in alternative investments are expected to grow 12% per year over the next decade.2
“Capital Group and KKR have highly complementary capabilities and similar cultures, and we are both committed to achieving results for our clients.” Joe Bay and Scott Nuttall“We believe individuals should have access to alternative investments and are excited to partner with Capital Group, which has world-class investment capabilities, strong client relationships and a leading sales and distribution network. We look forward to bringing these solutions to market and expanding our strategic partnership into other asset classes and channels,” said Capital Group Co-CEO at KKR.
“We expect interest in alternative investments to continue to grow over the next decade as high-net-worth investors gain access to high-quality investment solutions,” he said. Eric Mogeloff“We are pleased with the momentum and growth in our Private Wealth business and believe these new hybrid solutions will be a strong complement to our existing platform and a compelling way to bring the benefits of alternative investments to a broader range of high net worth and retirement investors who may not have had access to them before,” said John McClellan, partner and head of global client solutions at KKR.
Matt O’Connor“The investment universe is expanding, and we’re focused on creating meaningful public and private categories that will benefit our clients over the long term,” said Capital Group’s Client Group President. “Financial professionals tell us we can add more value by providing enhanced solutions to their portfolios, and they look to us as a partner.”
Gitlin continued, “Some of our clients want to be offered a complete investment solution that includes alternative investments. Capital has spent the past two years researching the broader alternative investment market and considering whether to buy, build or partner. Acquiring would disrupt our culture and building would have distracted our investment professionals, so it was best to partner with professionals to offer clients a holistic investment solution. For many investors, private credit is out of reach. The lens we used was simple: how can we help our clients while staying true to our culture and focusing on what we do best?”
Further details of the solution will be announced later this year.
Source: KKR
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