Ten Percent Creates a Different Programme at Every Scale
The percentage is only a starting point. The dollar amount decides which managers the LP can use and how much work the program creates. Ten percent of $100 million is $10 million. Ten percent of $10 billion is $1 billion, which may need many managers and deal types.
Scale changes access and staff needs, while current cash obligations remain. Yale's FY2025 endowment update illustrates this: its endowment was $44.1 billion at June 30, 2025, and it distributed $2.1 billion to the university budget during the year. Even a large pool serves long-term investment goals and present spending at once.
In this sample portfolio, venture capital is 10% and all other assets are 90%.
A 10% Venture Target in Context
A 10% target may look small as a share of assets. For a large institution, it can fund a whole venture programme.
- Venture capital10%
- Other portfolio assets90%
View allocation data and assumptions
| Portfolio segment | Share | How to read it |
|---|---|---|
| Venture capital | 10% | Target allocation that becomes materially different at larger portfolio sizes. |
| Other portfolio assets | 90% | Public markets, credit, real assets, cash, and other alternatives. |
Scale Changes the Route Into Venture
A smaller LP may rely on a pooled fund or a few direct funds because manager minimums absorb much of its budget. A $1 billion LP can spread commitments across managers and years. A $10 billion LP may add separate accounts and co-investments. Return goals, cash needs and staffing constrain every route.
| Portfolio size | Likely investment structures | Main constraint |
|---|---|---|
| $100M | Fund of funds, pooled vehicle, or a small set of direct funds | Minimum commitments and staff time |
| $1B | Direct funds across vintages, selective co-investments, and specialist mandates | Building enough manager depth without overdiversifying |
| $10B | Multiple managers, separate accounts where available, co-investments, and secondaries | Deploying meaningful dollars without lowering selection quality |
What Does the Target Mean for This Portfolio?
A 5% target is $5 million for a $100 million LP and $500 million for a $10 billion LP. The smaller LP may not meet a fund minimum. The larger LP may struggle to find enough strong managers without putting too much with a few large firms.
Cheque sizes and expected calls give the target a practical meaning. Underlying holdings reveal another effect: several managers may own the same late-stage business, creating more company exposure than the LP intended.
The Programme Develops Over Time
Filling a target in one year concentrates entry at that year's prices and fund choices. Commitments across years spread that exposure, while gradual calls mean NAV builds more slowly. Re-ups and changing cash conditions affect the pace along the way.
Scale Changes the Available Choices
Large cheques may improve information rights and co-investment access but steer an LP toward large funds. A smaller LP may gain access through a fund of funds at an extra cost. Fees and staff costs determine how much benefit each route retains.
The Operating Policy Behind the Allocation
- Target and range: A range accommodates allocation changes caused by markets.
- Pacing: Commitments by vintage gradually build the final allocation.
- Concentration: Limits on each firm or strategy reduce dependence on one source of returns.
- Liquidity: Assets available to meet capital calls support the promises made to managers.
- Investment structures: Funds, co-investments, secondaries and pooled vehicles serve different roles.
These rules work only if the LP can invest the money well and keep funding the program in a weak market.
The Same Percentage Creates Three Different Programmes
At 10%, a $100 million institution has $10 million for venture. A $1 billion institution has $100 million, and a $10 billion institution has $1 billion. The smallest may choose a single practical route; the largest faces the work of a full investment platform.
Return requirements define the platform's purpose. Mercer noted that FY25 NACUBO and Commonfund respondents with nominal targets averaged 7.3%, while the largest averaged 8.1%. The institution's own goal determines the contribution expected from venture.
Implementation Capacity Becomes the Constraint
Once the target is in dollars, the work is easier to see. A $10 million venture budget may support one main fund before reserves. A $100 million budget can support ten $10 million manager commitments. That range only helps if the team can choose and track each manager with care.
A 5%, 10% or 15% venture target means very different dollar sums. This is true for portfolios of $100 million, $1 billion and $10 billion.
Allocation Dollars by Portfolio Size
The same percentage can mean one small commitment, a full manager portfolio or a large venture program.
| Portfolio size | 5% venture | 10% venture | 15% venture |
|---|---|---|---|
| $100M | $5M | $10M | $15M |
| $1B | $50M | $100M | $150M |
| $10B | $500M | $1B | $1.5B |
View allocation assumptions
| Input | Value | Purpose |
|---|---|---|
| Portfolio sizes | $100M, $1B, $10B | Shows how larger scale changes implementation. |
| Allocation range | 5%, 10%, 15% | Illustrative venture policy range. |
| Calculation | Portfolio size x allocation | Excludes overcommitment, NAV growth, and unfunded exposure. |
Frequently Asked Questions
Should a smaller institution avoid venture?
A smaller LP can still invest in venture. It may need a slower pace, fewer direct funds or a well-chosen pooled fund. Its budget and staff shape the available choices. A much larger peer operates under different constraints.
Can a large institution allocate too little to venture?
A large LP can create substantial work with a target too small to improve access or total returns. The dollar size and likely portfolio impact reveal that mismatch.