For limited partners trying to build a private equity portfolio, a common first step is to invest in secondaries.
The idea is that investing in diversified pools of mature assets leads to quick distributions, helping mitigate the J-curve seen in the early days of a portfolio’s life. A book published over the summer, Asset Allocation and Private Markets: A Guide to Investing with Private Equity, Private Debt and Private Real Assets, casts doubt on this perceived wisdom.
In this episode of Spotlight, we examine the arguments with co-author Cyril Demaria and Greenhill’s head of European Capital Advisory Bernhard Engelien. We also look at hard-and-fast rules that LPs should bear in mind when building out a PE portfolio or starting one from scratch.