Private equity can boost absolute returns when added to traditional diversified portfolios and remain a star performer among alternative asset classes. With inflation showing signs of persistence, investors will be hoping that PE funds can continue to turbo charge their overall risk-adjusted returns in the coming years. KKR’s latest white paper – Regime Change: The Role of Private Equity in the ‘Traditional’ Portfolio – outlines why the firm remains bullish in the current macro environment, in particular highlighting the importance of PE’s illiquidity premium. The report’s authors main punch line is that nimble value creation opportunities, efficacy in timing investments and exits, and company selection have been important drivers of performance. Investors will hope to remain entertained and applauding future returns as they continue to tap in to the power of PE.
