Speaking at the Milken Institute Global Conference in Beverly Hills on Monday, KKR’s Henry Kravis and George Roberts told investors to maintain perspective as trade tensions and tariff uncertainty drag on.
“To quote Queen Elizabeth, stay calm and carry on,” Roberts told attendees. “What we have now is disruption in international trade, and tariffs, with no real outcome of what that is going to be… I think there will be trade deals made—there have to be.”
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The co-founders, who transitioned to co-executive chairmen of KKR in October 2021, contextualized today’s challenges against more severe historical crises. Roberts cited wage-price controls in the early 1970s, 21% prime rates in the 1980s, and the 2008 financial crisis—all of which he characterized as “much scarier than what we have now.”
The founders say most of KKR’s portfolio is relatively well-insulated. “Over 90% of our companies have no exposure, or limited exposure, to tariffs. So we had just 10%, plus or minus, that actually has some exposure.”
“Focus on what you can control,” Kravis advised. “We’re saying to people, don’t panic.”
Despite the uncertainty, KKR has deployed over $30 billion since the beginning of the year, with half of that amount going into ex-U.S. opportunities that the firm feels are becoming more attractive.
“What we’re saying to people is think about other places in the world where we can actually put money to work,” said Roberts.
Asia is “a big part” of the firm’s strategy, and European opportunities appear especially compelling: Kravis called out German Chancellor Friedrich Merz’s trillion-dollar defense and infrastructure initiative as a key catalyst. European nations are increasingly focused on self-reliance, creating what Kravis described as “real opportunity.”
“Europeans now are saying… we’ve got to take the future into our own hands. We cannot rely on the U.S. anymore like we have,” Kravis said, adding that he visits Europe almost monthly and is “getting a different vibe back from Europeans today than what I had seen in the past. They’re waking up now.”
Infrastructure is also top of mind.
“Infrastructure—there’s probably no better time to invest right now,” Roberts said, citing high interest rates and the availability of quality assets. “We have a lot less competition in infrastructure than we do in private equity.”
Switching from deployment to fundraising, both founders shared their enthusiasm about the emerging retail opportunity.
“There’s $44 trillion in the hands of individuals and savings… there’s $10 trillion in the hands of people with 401(k)s.”
Kravis said the firm’s retail-oriented assets under management grew from $8 billion to $21 billion over the past year, thanks in part to a strategic partnership with Capital Group that’s helped with distribution.
“We’re really in the first inning,” Kravis said. “We’re just touching the surface right now.”