LOS ANGELES and NEW YORK, May 23,
2024 /PRNewswire/ -- Leading global investment firms,
Capital Group and KKR, today announced an exclusive, strategic
partnership to bring new ways for investors to incorporate
alternative investments into their portfolios. Capital Group and
KKR intend to make hybrid public-private markets investment
solutions available to investors across multiple asset classes,
geographies and channels. The first two strategies will be
public-private fixed income offerings designed for financial
professionals and their clients, which are expected to launch in
the U.S. in 2025.
"Capital Group sees a real opportunity to deliver hybrid
public-private market solutions for our clients," noted Capital
Group President and CEO Mike Gitlin.
"For over 90 years, we have been committed to delivering a strong
long-term track record of excess returns for clients, overseeing
$2.6 trillion of which $500 billion is in public fixed income. KKR is a
leading and respected alternative asset manager with over
$500 billion in assets, with a proven
track record managing over $200
billion in credit. We believe combining our respective areas
of expertise in strategies that are more liquid than standalone
private credit can help our clients achieve their goals."
While alternatives have been available to high-net-worth
individuals and accredited investors for some time, mass affluent
investors, which represent more than 40% of the wealth market
globally, have not historically had access to the asset
class.1 This combination of Capital Group and KKR opens
the door for more financial professionals and their clients to
access alternative investments as part of their portfolios.
Gitlin continued, "We will bring the strategies of a premium
alternatives manager to our clients with a compelling fee and
greater accessibility. Clients should 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 market expertise. We are entering this market, in strategic
partnership with KKR, with long-term plans and aspirations.
Listening to our clients' needs, we are confident that this will be
the seed of a new platform, not just a product launch."
Global assets in alternatives have grown significantly over the
last 20 years and it is estimated that individual wealth invested
in alternatives is expected to grow 12% annually over the next
decade.2
"Capital Group and KKR have highly complementary capabilities
and similar cultures and together we are committed to delivering
for clients," said Joe Bae and
Scott Nuttall, Co-CEOs of KKR. "We
believe individuals should have access to alternative investments
and are thrilled to be partnering 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 additional asset classes and channels."
"We see interest in alternatives only continuing to grow over
the next decade as wealth investors gain access to high quality
investment solutions," said Eric
Mogelof, Partner and Head of Global Client Solutions at KKR.
"We are pleased with the momentum and growth that we've seen in our
private wealth business and believe these new hybrid solutions will
be a strong complement to our existing platform and offer a
compelling way to bring the benefits of alternatives to an even
wider audience of investors across wealth and retirement who may
not have had access to them historically."
Matt O'Connor, President of
Capital Group's Client Group stated, "The investable universe has
expanded. We are committed to creating a meaningful public-private
category for the benefit of our clients over the long term.
Financial professionals tell us that we can add more value by
bringing a fuller set of solutions to their clients' portfolios and
are looking to us to be their partner."
Gitlin continued, "Some of our clients want us to bring them a
full investment solution including alternatives. Capital has been
researching the broad alternatives market for the past two years
and considered whether to buy, build or partner. Buying would
disrupt our culture, building could distract our investment
professionals, so partnering with a subject-matter expert to
deliver a holistic investment solution for our clients was the best
course of action. For many investors, private credit can be out of
reach. The lens we used was a simple one – how can we help clients
while staying true to our culture and maintaining our focus on what
we do best."
Solution details will be announced later this year.
About Capital Group
Capital Group has been singularly focused on delivering superior
investment results for long-term investors using high-conviction
portfolios, rigorous research, and individual accountability since
1931.
As of March 30, 2024, Capital Group
manages more than $2.6 trillion in
equity and fixed income assets for millions of individuals around
the world. Capital Group manages equity assets through three
investment groups. These groups make investment and proxy voting
decisions independently. Fixed income investment professionals
provide fixed income research and investment management across the
Capital organization; however, for securities with equity
characteristics, they act solely on behalf of one of the three
equity investment groups.
For more information, visit
https://www.capitalgroup.com/about-us.html.html.
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
https://kkr.com. For additional information about Global Atlantic
Financial Group, please visit Global Atlantic Financial Group's
website at https://www.globalatlantic.com/.
Past results are not a guarantee of future results. This
content is published by American Funds Distributors, Inc., which
will be renamed Capital Client Group, Inc. on or around
July 1, 2024, and copyrighted to
Capital Group and affiliates, 2024, all rights reserved.
For more information, including our detailed disclosures,
visit
www.capitalgroup.com/global-disclosures.
1 PWC Asset and wealth management revolution 2023:
The new context
2 Bain & Co 2023 Global Private Equity
Media Contacts:
Hannah Coan
hannah.coan@capgroup.com
Kristi Huller
kristi.huller@kkr.com
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