Private markets, after the pitchbook.
Liquidity, valuation, and timing — measured against the family's position, not the manager's.
The illiquidity premium, as advertised.
Private markets are not a single asset class. They are a label that sits over a range of structures — private equity, private credit, secondaries, real assets, infrastructure, venture — each with its own liquidity profile, its own valuation methodology, and its own honest answer to the question of whether it belongs in a particular family's portfolio.
The pitchbook for any of them is uniformly fluent. The honest answer is rarely as clean.
The illiquidity premium, as advertised.
The standard pitch attaches a premium to illiquidity — a return uplift the family is told to expect for accepting that the capital will be inaccessible for seven, ten, fifteen years. The premium is real, on long historical averages, in some sleeves, for some vintages. It is also smaller than the pitch suggests, more dispersed across managers than the average implies, and more variable across vintages than any single fund's track record will admit.
The premium does exist. The pitch's confidence about its size, its persistence, and its inevitability is what should be discounted.
Mark-to-model in a mark-to-market world.
Mark-to-model in a mark-to-market world.
A private fund's quarterly valuation is, in the absence of a transaction, an estimate. The estimate is honest in most cases. It is also smoother than the underlying reality. A family that holds significant private exposure will see a portfolio that appears less volatile than its public counterpart. The reduced volatility is, in part, the absence of marks — not the absence of risk.
When the marks do arrive — at distribution, at secondary sale, at the next funding round — the family discovers the volatility was always there. It was simply not being reported.
This is not a reason to avoid private markets. It is a reason not to size the allocation against the reported volatility, which understates the true position.
Access is not the question. Fit is.
For a family with a long horizon, modest near-term liquidity needs, and a tax structure that benefits from deferred realization, well-selected private exposure can be additive over a full cycle. For a family approaching a transition, with named near-term obligations, or with a tax structure that does not absorb K-1 complexity gracefully, the same allocation is a drag.
The conversation worth having is not whether the family can access private markets — most families of substantial means now can. It is whether the allocation, sized against the actual position, makes the architecture stronger or weaker.
That conversation is held against the family's structure, not against a peer-group allocation.
Private markets, sized against the position.
A first conversation with senior counsel on the bench — held against the family's actual architecture.