KKR Urges Total Portfolio Approach as Return Gaps Narrow Across Asset Classes
Updated
Updated · KKR · Jul 29
KKR Urges Total Portfolio Approach as Return Gaps Narrow Across Asset Classes
2 articles · Updated · KKR · Jul 29
Summary
KKR said client discussions have shifted from whether the Total Portfolio Approach works in theory to how investors can implement it in actual portfolio construction.
Expected returns are compressing across many traditional asset classes, KKR said, making capital allocation, pacing and execution more important than strategic asset allocation alone.
TPA is not a single blueprint, the firm said, but a set of principles tailored to each investor’s objectives, governance, delegation appetite and analytical capabilities.
KKR framed the model as "zero-based budgeting for portfolio construction," arguing investors need not abandon asset allocation or overhaul governance to adopt a minimum viable version.
Private markets remain one of the hardest areas for TPA because of illiquidity, long fund lives, limited transparency and shifting opportunity sets, but KKR said they may also offer the biggest payoff.