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“If you have an intermediate time horizon, a moderate capacity for risk, and low to moderate liquidity needs, then we can start to bring in less liquid investments into the portfolio”

Victoria Quach, Capital Group

“Our advisors spend their time thinking about how to meet objectives and goals, and what the experience is for a client to meet those objectives and goals”

Rex Morgan, Capital Group

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Bringing private markets to the core of your portfolio

Capital Group outlines a disciplined framework for financial professionals integrating private investments − emphasizing portfolio function, income sources, liquidity tolerance, and risk management rather than product selection

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Rex Morgan

Capital Group

Victoria Quach

Capital Group

Industry experts

IN SOME advisory practices, private investments are no longer approached as tactical or opportunistic exposures. Instead, they are being incorporated into portfolios alongside public equities and fixed income, with an emphasis on how they function rather than how they are labeled. Financial professionals are evaluating whether private assets can support established portfolio objectives, particularly around income, diversification, and durability. That reassessment is unfolding as the economic backdrop becomes more uneven. The Federal Reserve has begun easing policy, and those cuts are starting to filter through the U.S economy in subtle but noticeable ways. Expectations are building around potential further easing during 2026. At the same time, the labor market has softened, while inflation pressures have cooled and the widely anticipated tariff shock has yet to materialize in a meaningful way. None of this points to imminent stress. But it does suggest a period when income reliability, diversification, and portfolio structure matter more than they did during years of broad-based growth. That context framed a recent discussion at Schwab Impact 2025, where Capital Group’s Rex Morgan, RIA relationship manager, and Victoria Quach, senior client analytics manager, detailed how financial professionals can integrate private markets into client portfolios.

For Morgan, Capital Group’s move into private investments began with advisor conversations, not product design. “Our advisors spend their time thinking about how to meet objectives and goals, and what the experience is for a client to meet those objectives and goals,” he said. As their discussions continued, a consistent message surfaced. Advisors wanted broader private market options that could be accessed in a practical way. “There are a lot of good options out there,” Morgan said, “but the private markets are big, they’re robust, and there are various vehicle types to help us access it.” Advisors were not asking for complexity for its own sake. They were asking whether private investments could help solve specific problems, including liquidity management, operational efficiency, and smoother portfolio implementation. That demand coincided with the growing scale of private markets themselves. Once a market reaches a certain size, Morgan suggested, it becomes harder to ignore. “When you look at the size of the private market, it’s now larger than high yield,” he said. From Capital Group’s perspective, the question was straightforward – could private markets help meet client objectives in a sensible, risk-aware way?

Morgan, who works closely with RIAs across the country, set the tone early by emphasizing Capital Group’s advisor-led approach. The firm’s role, he said, begins with listening closely to how financial professionals think about client objectives and portfolio outcomes. Quach, a seasoned asset allocator with two decades of experience across public and private markets, approached the conversation from a portfolio construction lens, focusing on how private investments can be evaluated and used thoughtfully. What emerged was a clear point of view. Private markets are not being introduced to replace traditional allocations; nor are they meant to be chased opportunistically. They are being positioned as tools that can be integrated deliberately,

Answering that question led to another concern – how to build the capability. Morgan said the firm considered building, buying, and partnering. Building from scratch, however, quickly fell out of favor. “It takes a long time to build the credibility,” he said. Instead, Capital Group partnered with KKR, a decision driven as much by cultural alignment as by investment expertise. The aim was not speed to market, but continuity. Capital Group wanted to extend its long-standing approach of listening to financial professionals and addressing portfolio problems, while relying on a partner with deep experience in private markets.

As access to private markets expands, the burden on financial professionals shifts from access to judgement. Quach framed that responsibility in practical terms. “I really view due diligence as a discovery process,” she said. She described two pillars that guide her approach. Operational due diligence focuses on how an investment functions from day to day. Investment management due diligence examines the strategy itself and the people executing it. But the goal, she emphasized, is not simply to check boxes. “What we’re actually trying to achieve is, do we understand the investment strategy and do we trust the investment manager?” she said. Quach also reflected on how dramatically the landscape has changed. “When I started my career, private markets were typically only accessed by institutional investors,” she said. The purpose of partnerships like Capital Group and KKR, she explained, is to unlock that segment for a broader set of investors. With access has come choice, and with choice has come uncertainty. Advisors, Quach acknowledged, can feel overwhelmed. Her response to this problem begins with education. “How do you invest in something that you don’t understand?” she asked. Education helps financial professionals understand what they own, what risks they are taking and how liquidity should be considered at the portfolio level.

multi-sector income. The private allocations, which include direct lending and asset-based finance, are included to diversify sources of income rather than simply to raise yield. Fixed income remains a central stabilizing force in portfolios, particularly during periods when growth slows or equity leadership narrows. Private credit, when integrated thoughtfully, can complement that role by introducing exposures that are less sensitive to public market pricing dynamics. Illiquidity is often the first concern financial professionals raise. The starting point is a clear assessment of time horizon, risk tolerance, and spending needs. “If you have an intermediate time horizon, a moderate capacity for risk, and low to moderate liquidity needs,” Quach said, “then we can start to bring in less-liquid investments into the portfolio.” Internal portfolio simulations suggest that some investors can accommodate a greater allocation to semi-liquid strategies than they might expect, without materially compromising overall portfolio liquidity. The key is intention. Illiquidity should be selected deliberately, with clear expectations and appropriate sizing. For financial professionals, this structure also simplifies implementation. A single solution can often be applied across a wide range of client relationships without the administrative hurdles that have traditionally accompanied private investments. This helps keep the focus where financial professionals want it − on objectives, outcomes, and client conversations rather than mechanics.

Market conditions inevitably influence how financial professionals think about portfolio construction, but neither Morgan nor Quach framed private markets as a response to short-term signals. Their emphasis remained on structure rather than timing. Morgan noted that trying to time relative value between public and private markets is inherently difficult. Instead, the focus is on understanding what a solution is designed to do and whether it serves a defined purpose within the portfolio. Quach pointed to this backdrop as reinforcing the role of public-private strategies as portfolio diversifiers rather than tactical tools. The aim is not to predict market turns but to build portfolios that are better equipped to function across a range of conditions. Private markets may not belong in every portfolio, and they should not be introduced hastily. Financial professionals are encouraged to assess where they are in their understanding, seek credible partners, and prioritize education alongside implementation.

How financial professionals might use private markets

Positioned as complementary sources of return, income, and diversification rather than standalone allocations

Capital Group was established in 1931 in Los Angeles, California, and now has 31 offices around the globe. For over 90 years we’ve provided carefully researched investment solutions and services to financial professionals.

Rex Morgan is an RIA relationship manager at Capital Group, home of American Funds, covering Washington, Colorado, and Oregon. He has 11 years of investment industry experience and joined Capital Group in 2024. Prior to joining Capital, Morgan worked as an RIA sales executive at Vanguard. He holds a bachelor’s degree in finance from Brigham Young University. He also holds the Certified Financial Planner™ and Certified Investment Management Analyst® designations. Morgan is based in Denver, Colorado.

Capital Group

Rex Morgan

Victoria Quach is a senior client analytics manager at Capital Group, home of American Funds. She also serves on the Custom Solutions Committee. She has 17 years of industry experience and has been with Capital Group for seven years. Earlier in her career at Capital, she was a senior client analytics specialist. Prior to joining Capital, Quach worked as a vice president at Blackrock focusing on multi-asset model portfolio construction and asset allocation. Before that, she was a quantitative research analyst developing investment strategies for tactical asset allocation and fixed-income teams at Franklin Templeton Investments. She holds a master’s degree in financial engineering from the UCLA Anderson School of Management and a bachelor’s degree in mathematics and applied science from the University of California, Los Angeles.

Capital Group

Victoria Quach

Listening first, building second

Published May 13, 2026

Evaluated based on how they behave within portfolios, not how they are labeled

Integrated alongside fixed income and equities to support client objectives

Aligned to clients’ need for liquidity, risk tolerance, and time horizon

provided financial professionals stay anchored to objectives, education, and risk.

Due diligence as alignment, not abstraction

One of the more practical distinctions Capital Group makes is in how it frames private credit inside a portfolio. Quach described it not as an alternative competing with fixed income but as an extension of it. That framing allows financial professionals to evaluate private credit using familiar reference points, such as income generation, downside behavior, and portfolio balance, rather than viewing it as a standalone allocation. In practice, the public portions of these strategies align with established fixed-income categories such as core-plus or

Treating private credit as part of the foundation

Staying grounded amid shifting markets

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value. Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses, which can be obtained from a financial professional and should be read carefully before investing. Capital Group and Kohlberg Kravis Roberts & Co. L.P. (“KKR”) are not affiliated. The two firms maintain an exclusive partnership to deliver public-private investment solutions to investors. Investments in private credit and related strategies involve significant risks, including limited liquidity and potential loss of capital. These strategies may include exposure to low and unrated credit instruments, structured products, and derivatives, all of which carry heightened credit, market, valuation, and liquidity risks. Investors should consult with their financial professional when considering such strategies for their portfolios. Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation. All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies. Use of this website is intended for US residents only. Use of this website and materials is also subject to approval by your home office. Capital Client Group, Inc. This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.

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