An Alternative Perspective: Past, Present, and Future

KKR published 'An Alternative Perspective: Past, Present, and Future,' a white paper tracing the history and outlook of the Alternatives industry. The firm recalls that Henry Kravis, George Roberts, and Jerome Kohlberg left Bear Stearns in 1976 to found Kohlberg Kravis Roberts, initially seeding the business with a $120,000 investment and using a 'boot strapping' acquisition approach that later became known as private equity.

According to KKR, the Alternatives industry now spans private equity, venture capital, private credit, infrastructure, natural resources, and real estate, with more than $15 trillion in assets under management, and is expected to reach at least $24 trillion by 2028. KKR argues that while these figures appear large in absolute terms, they remain modest relative to global GDP and financial assets. The firm identifies three drivers of growth: continued excess demand for private capital as governments face fiscal constraints, energy transition needs and geopolitical competition; the illiquidity premium, or excess return over public benchmarks, which KKR says will matter more as retirement savings gaps widen; and diversification benefits as allocators reassess portfolios amid what KKR calls a regime change in asset allocation.

KKR cites a World Economic Forum analysis estimating the global retirement savings gap at US$70 trillion, rising to US$400 trillion by 2050, with the U.S. representing about 40%. The paper also notes that the private markets' performance depends heavily on manager selection, with a wide gap between top- and bottom-quartile outcomes, and that different strategies, such as private equity versus private credit, carry materially different return and volatility profiles. The white paper is presented as a research perspective from KKR rather than a product offering.