The Meb Faber Show - Better Investing KKR's Henry McVey - Regime Change is Here: Think Differently About Asset Allocation | #592
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Aug 4, 2025 Henry McVey, Head of Global Macro & Asset Allocation at KKR, delves into the shifting macroeconomic landscape and the implications of a declining US dollar. He highlights emerging opportunities in global markets, particularly in Europe and Japan, while offering astute asset allocation strategies. McVey draws parallels between productivity advancements driven by AI and historical market transformations. He also tackles the economic impact of geopolitical tensions and emphasizes the need for adaptive investment approaches in a post-COVID world.
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Europe’s Reform and Opportunity Needs
- Europe shows structural reform needs including securitization expansion, cross-border tax reduction, and competitive energy costs.
- These reforms can unlock Europe's productivity and innovation potential, improving market outlook.
Europe's Tech Market Challenges
- European tech firms often get acquired by US companies before listing, limiting Europe's tech market capitalization.
- Cultural willingness to embrace failure and entrepreneurial risk affects tech growth competitiveness globally.
Private Equity Performance Dynamics
- Private equity outperforms when public markets are volatile and growth is moderate, benefiting from illiquidity and operational improvements.
- In high S&P 500 growth periods, private equity’s illiquidity premium declines.
