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Q1 2026 Global Wealth Investment Playbook
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Rethinking Asset Allocation for Modern Portfolios

In today’s market, traditional stock-bond asset allocation strategies are falling short. Explore KKR’s modern asset allocation framework for integrating private markets to help you build more resilient portfolios and achieve desired outcomes.
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Why Asset Allocation Needs to Evolve

Over the next decade, achieving compelling returns with the 60/40 portfolio will be challenging. A shifting macroeconomic environment and heightened volatility are expected to impact performance across asset classes, making it increasingly challenging to achieve portfolio objectives through public market exposure alone.

Historical vs. Expected Returns Across Asset Classes
Bar chart comparing historical and expected five year returns across asset classes, showing lower projected returns for the S&P 500 and private equity, modest declines for private credit and infrastructure, and higher expected returns for global bonds and private real estate.
Source: Bloomberg, BofA, Burgiss, Cambridge, KKR Global Macro & Asset Allocation analysis. As of 2Q25. Last 5-Years return from October 31, 2020 to October 31, 2025 for consistency across asset classes. Private Credit refers to Direct Lending. No representation is made that the trends depicted or described above will continue. Expected returns are hypothetical in nature and are shown for illustrative, informational purposes only. Past performance does not guarantee future results. Indexes are unmanaged. It is not possible to invest directly in an index.
Bar chart comparing historical and expected five year returns across asset classes, showing lower projected returns for the S&P 500 and private equity, modest declines for private credit and infrastructure, and higher expected returns for global bonds and private real estate.
Source: Bloomberg, BofA, Burgiss, Cambridge, KKR Global Macro & Asset Allocation analysis. As of 2Q25. Last 5-Years return from October 31, 2020 to October 31, 2025 for consistency across asset classes. Private Credit refers to Direct Lending. No representation is made that the trends depicted or described above will continue. Expected returns are hypothetical in nature and are shown for illustrative, informational purposes only. Past performance does not guarantee future results. Indexes are unmanaged. It is not possible to invest directly in an index.

Why Allocate to Private Markets?

Looking ahead, private markets are becoming increasingly important for income and return generation, diversification, and inflation resilience.

Investors may consider asset allocations strategies with more predictable, durable cash flows—such as Private Credit, Infrastructure, and Real Estate—alongside Private Equity strategies focused on value creation and long-term growth. Diversifying across these private market asset classes can help investors build all-weather, resilient asset allocation strategies.

Realized Annual Returns and Volatility Comparison with Traditional Assets and Private Equity, %
Line chart comparing 20 year realized annual returns and volatility, showing that adding private equity shifts the efficient frontier upward, delivering higher returns for a given level of volatility compared with traditional assets alone.
Source: Bloomberg, MSCI, Cambridge. KKR Global Macro & Asset Allocation analysis. Returns and correlations are calculated with quarterly returns between 2005 and 2024. Volatilities are calculated with annual calendar year returns between 2005 and 2024. Traditional Assets include Public Fixed Income (Bloomberg Global-Aggregate Total Return Index Value Hedged USD) and Public Equities (MSCI World Index). Private Equity is modeled using Cambridge Global Buyout Index. Indices are unmanaged and cannot be invested into directly. For illustrative purposes only. Past performance is no guarantee of future results.
Line chart comparing 20 year realized annual returns and volatility, showing that adding private equity shifts the efficient frontier upward, delivering higher returns for a given level of volatility compared with traditional assets alone.
Source: Bloomberg, MSCI, Cambridge. KKR Global Macro & Asset Allocation analysis. Returns and correlations are calculated with quarterly returns between 2005 and 2024. Volatilities are calculated with annual calendar year returns between 2005 and 2024. Traditional Assets include Public Fixed Income (Bloomberg Global-Aggregate Total Return Index Value Hedged USD) and Public Equities (MSCI World Index). Private Equity is modeled using Cambridge Global Buyout Index. Indices are unmanaged and cannot be invested into directly. For illustrative purposes only. Past performance is no guarantee of future results.

Asset Allocation Framework in Action

KKR has developed an asset allocation framework around three core investment outcomes: capital preservation, income, and growth. This outcome-driven approach offers advisors an intuitive starting point for determining how private market alternatives can be incorporated to meet distinct portfolio needs.

Explore the models below to learn how different allocation strategies map to key portfolio objectives.



This model portfolio framework is  designed as an illustrative starting point rather than a prescriptive solution and should be adapted to align with each client’s individual objectives, risk profile, and investment horizon.

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Get Started with KKR

As the opportunity set within private markets continues to expand, the challenge for many advisors is no longer why to incorporate these exposures—but how. The proliferation of structures, strategies, and managers available today can make it difficult to know where to begin or how to build a scalable, client-appropriate asset allocation strategy.

While each investor has unique goals and time horizons, KKR helps advisors and investors get started by offering a simple framework that includes private markets and supports the pursuit of desired portfolio outcomes.

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