Private Markets Liquidity Stress Test

Q: Are future commitments included?

Not by default. The model begins with existing unfunded commitments; recurring future commitments can be added under Advanced.

Test whether your full balance sheet can meet private-market calls, spending and a liquidity floor when markets turn against you.

The main question this tool answers“Can my portfolio meet its private-market capital calls during a liquidity shock?”Unlike a fund forecast, this models liquid assets, existing NAV, unfunded commitments and recurring cash needs together.

Your balance sheet

Enter the liquidity you have today and the existing private-market obligations you need to fund.

Starting position

Current liquid assetsAvailable before the forecast

Current PE / VC NAVExisting private value

Unfunded commitmentsExisting contractual obligation

Annual cash needs

Expected annual capital callsOf beginning unfunded

Expected annual distributionsOf beginning NAV

Annual spending / withdrawalsCash use from liquid assets

Annual external inflowsCash source before investment returns

Examples include contributions, operating income or other recurring portfolio inflows.

Stress controls

Drag the three drivers that make liquidity tighter. The severe case uses the full setting; moderate uses half.

Capital calls+50%

Normal+100%

Distributions−60%

Normal−100%

Liquid-market shock−25%

0%−50%

The market shock is applied once at the start of Year 1. The selected recovery period then adds a simple illustrative recovery adjustment.

Adjust assumptions

Forecast horizon

yrs

Forecast start year

Defaults to the current calendar year.

Liquid portfolio expected return

PE / VC NAV growth

Spending growth

External inflow growth

Recovery period after shock

yrs

Minimum liquidity floor

Held as a fixed $ amount based on today's liquid assets.

Additional future commitments

$m / yr

Off by default. This adds new unfunded commitments each year before calls.

Liquidity under stress

The headline uses the severe path. All assumptions are illustrative and update immediately.

Liquidity coverage — adequate

3.1×

Recommended liquidity reserve$36mFixed floor based on current liquid assets

Peak 12-month cash requirement$48mSevere case

Peak annual capital calls$31mSevere case

Lowest projected liquidity$94mSevere case

Stress-case liquidity buffer$41mLowest balance less reserve

Additional commitments before constrained$0mOne-time amount added at the start of Y1

Portfolio liquidity under stress

Ending liquid assets after investment returns and the whole annual liquidity equation. The dashed line is the fixed liquidity floor.

Severe minimum

Base caseModerate stressSevere stressLiquidity floor

Sources vs uses of liquidity

The severe path shows all annual cash sources and uses: distributions and inflows versus capital calls and spending.

Severe case

Private-market distributionsExternal inflowsCapital callsSpending

Liquidity coverage ratio

Available liquidity after liquid-market return plus annual sources, divided by annual calls and spending. The dashed threshold is 1.0×.

Threshold: 1.0×

Base caseModerate stressSevere stressMinimum threshold

How the test works

Each year, the model applies the selected liquid-market return, then adds private-market distributions and external inflows, and subtracts capital calls and spending. Private NAV and unfunded commitments update in the same annual state. The severe case applies your full stress settings; moderate stress uses half. This keeps the charts and coverage ratio on one reconciled balance-sheet path rather than a single-fund cash-flow forecast.

Questions LPs ask

What does liquidity coverage mean here?

It is the year's available liquid assets after return plus cash sources, divided by capital calls and spending. A ratio below 1.0× means those annual uses exceed available liquidity before any unmodeled asset sale or borrowing.

Why is the liquidity reserve fixed in dollars?

The reserve is set as a percentage of today's liquid assets and held at that dollar amount. This makes the floor easy to compare through the forecast rather than allowing it to fall automatically with a stressed portfolio.

Are future commitments included?

No, not by default. The model starts with existing unfunded commitments so it remains a stress test. You can add recurring future commitments in Adjust assumptions to see their separate impact.

How are severe and moderate stress defined?

Severe uses the full increase in calls, distribution reduction and liquid-market shock you set. Moderate uses half of each selected magnitude. These are illustrative scenarios, not market forecasts.

What is the additional commitments output?

It is the largest one-time extra unfunded amount added at the start of Year 1 that keeps the severe path above the liquidity floor with coverage of at least 1.0×. It is a capacity check, not a pacing recommendation.

Does this replace cash forecasting?

No. Actual capital calls, distributions, valuation marks and liquid-asset sales can be irregular. Use current fund notices, operating forecasts and governing documents for decisions.

Illustrative educational model only. It is not investment, legal, accounting or tax advice and does not predict actual capital-call timing, distributions, valuations or liquidity. Review current cash forecasts and fund documentation before making portfolio decisions.