Free private markets document template
Private Markets Investment Policy Statement Template
Draft an institutional LP private equity allocation policy and private markets investment policy statement covering liquidity, pacing, diversification and governance.
01
Purpose & scope
This Investment Policy Statement governs the private markets program of Foundation Investment Office effective January 1, 2027. It defines objectives, allocation parameters, portfolio construction, governance and monitoring standards.
02
Investment objectives
The program supports a Perpetual horizon and targets CPI + 5% net over rolling 10-year periods. Private markets should enhance long-term total return while preserving sufficient flexibility for the institution's broader obligations.
03
Risk tolerance
The institution's private markets risk posture is: Moderate-to-high; accept illiquidity for long-term excess return. Principal risks include illiquidity, valuation uncertainty, manager dispersion, concentration and commitment timing.
04
Liquidity policy
The program shall Maintain five years of projected net capital calls in liquid resources. Liquidity analysis must incorporate NAV, unfunded commitments, forecast calls, distributions and stressed realization timing.
05
Strategic allocation
For a $2.5bn portfolio, private markets has a 20% of total portfolio target with a permitted range of 15%-25%. Exposure will be measured using current NAV and monitored alongside unfunded commitments.
06
Program construction
Permitted strategies are buyout, venture capital, growth equity, private credit, secondaries and co-investments. The portfolio should diversify by strategy, manager, fund, geography, sector and vintage year while reserving capacity for selective secondary and co-investment opportunities.
07
Commitment pacing
Annual commitments should generally remain within $125m-$175m, subject to updated cash-flow forecasts, allocation gaps, expected distributions and market opportunity.
08
Concentration limits
Portfolio construction shall observe the following limits: 10% of private markets NAV per manager; 5% per fund; 25% per vintage year. Exceptions require documented Investment Committee approval.
09
Governance
Investment Committee approves commitments; staff manages pacing within policy
10
Monitoring & review
Performance will be evaluated using net IRR, TVPI, DPI, RVPI, PME and peer-vintage quartiles. The policy is subject to Annual policy review with quarterly monitoring, with documented exceptions and corrective actions.