Institutional sponsors often invest in private asset classes to boost the return profile of their overall plan portfolios. Yet, many fall short of achieving the desired returns. We believe that effective portfolio construction is an important component of achieving attractive return targets in private markets. Drawing on our experience over the last 20 years, we highlight the key considerations for any investor seeking to build a private markets portfolio:
- Emphasize manager selection
- Commit to private market funds directly
- Avoid over diversifying your portfolio
- Manage the j-curve impact
