Free private markets document template
Portfolio Construction Memo Template
Draft an institutional LP private equity portfolio construction memo covering strategy mix, manager count, commitments, vintages and concentration limits.
01
Portfolio objective
Insurance Investment Office will construct a 16% private markets program over a 10+ years horizon, targeting 15% net IRR and 1.8x net TVPI.
02
Strategy architecture
The strategic mix is 35% buyout, 20% venture, 15% growth, 15% private credit, 10% secondaries, 5% co-investments. Each sleeve should have a defined return role, liquidity profile and risk budget.
03
Geographic allocation
Target geographic exposure is 70% North America, 20% Europe, 10% Asia-Pacific. Geographic diversification should be assessed on underlying portfolio-company exposure, not fund domicile alone.
04
Manager portfolio
Maintain approximately 18-24 manager relationships with typical commitments of $20m-$40m. Re-ups must be underwritten against new-manager opportunities.
05
Vintage construction
Commit approximately $120m-$160m annually across 4-6 commitments. Avoid filling annual quotas with lower-conviction funds when market opportunity is weak.
06
Concentration limits
Observe the following limits: 10% per manager, 6% per fund, 25% per vintage and 40% per strategy. Test correlated exposures across managers, strategies, sectors and geographies.
07
Co-investments & secondaries
Use selectively for fee reduction and exposure scaling; cap at 10% of private markets NAV. Use to accelerate deployment, rebalance vintages and acquire seasoned cash flows.
08
Implementation plan
Near-term priorities are to protect re-up capacity, add two specialist managers and reduce 2021-2022 vintage concentration. Staff should maintain a forward calendar of re-ups, target managers and pacing capacity.
09
Monitoring framework
Review strategy weights, manager and fund concentrations, vintage-year exposure, look-through geography, sector risk, liquidity and performance attribution at least quarterly.