KKR | 2026 mid-year investment outlook: Global private equity

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[2026 mid-year investment outlook: Global private equity CIBC KKR Global Equity Strategy]

[Featuring Alisa Wood, Partner, Co-CEO KKR Private Equity Conglomerate LLC]

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The first half of 2026 has all been extremely complicated from a geopolitical standpoint, and also from just a general market outlook. And that's due to factors from the risk and opportunity associated with AI, to the prevalence, honestly, of the global conflicts that we're seeing around the world. Now, this uncertainty is actually causing some to lean out of the markets. But at KKR, we know how uncertainty actually creates opportunity for the right managers.

When you think about proprietary sourcing, disciplined investment pacing, and the conviction to lean in during periods of complexity, that all really comes into finding attractive entry points while others are waiting on the sidelines. So, we've executed over 70 corporate carve outs in the last 50 years. Less than 20% of our deal flow has come from other sponsors in the last three years. So, periods like this have historically produced some of the strongest private equity vintages.

In today's market, we believe it is fundamental that a manager's ability to meaningfully enhance bottom line earnings through operational improvement is the single most important driver of performance. That's where the value, that's where the alpha is going to come. This is all about that bottom line growth. And driving your own accountability.

When you think about value creation in portfolio companies, I think that's another really important point. And that too has become more complex. At KKR, operational value creation has always been central to our approach. But today, it's really important to make sure that's still the same playbook. Our portfolio companies are growing earnings at low-to-mid teen rates on average. And this, in our view, reflects the strength of our operational toolkit as well as our ability to really create value regardless of cycles.

In thinking about how we drive value, it's also really important to just understand what it is we invest in. We are buying companies that we can come in and help reinvest in that bottom line growth of the business. It's everything from making sure that we're thinking about their M&A opportunities, thinking about potential growth vectors. It is all about strengthening what it is they do well.

This is not about trying to pick winners in terms of pre-IPO. This is not about buying distressed or broken businesses. It's all about good to great. Now, why do we believe that and how does that work? We're investing in businesses most can’t live without but don't even know they use. We're buying those, and I say this in quotes, "boring companies". We like to be those that drive the business with the management team. Bringing those resources across the KKR toolkit and making sure we're optimizing for operational performance in the company, for growth within the company, for capital structures and capital markets performance, and really making sure that we're assessing risk in the right way and the license to operate and the ability to grow, from good to great.

For investors looking to allocate to private equity, we believe manager selection is the single most important determinant of return outcomes. What we've seen is that performance dispersion among managers is some of the widest it's ever been. But it's also wider than we're seeing across other asset classes. Today, we're seeing performance dispersion for buyout managers of approximately 1400 basis points. And when you think about that, compared to public markets of about 2 to 300 basis points, it's very material. And honestly, it reflects meaningful differences in both portfolio composition but almost more importantly, value creation capabilities. The best managers are the ones who produce that asset level alpha. Earnings growth through operational improvement is what makes the difference. That's how you drive returns in a very repeatable and prescriptive way.

[The information contained in this material are the views of KKR and compiled by CIBC Global Asset Management, as of July 14, 2026 and are subject to change at any time. CIBC Global Asset Management does not undertake any obligation or responsibility to update such opinions.

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