F FRONTIERSPACE Ventures

Private Markets Liquidity Stress Test for Institutional LPs

For pension funds, endowments, family offices and fund-of-funds teams testing a full balance sheet, including liquid assets, existing NAV, unfunded commitments and recurring cash needs, against delayed distributions and accelerated calls.

The main institutional LP question“Can our portfolio meet its private-market capital calls during a liquidity shock?”

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 adds distributions and inflows to liquid assets, then subtracts capital calls and spending. Severe stress uses the full settings; moderate stress uses half. Every chart follows the same balance-sheet path.

Questions LPs ask

What does liquidity coverage mean here?

Available liquidity after returns and cash inflows, divided by capital calls and spending. Below 1.0× means annual cash needs are greater than available liquidity.

Why is the liquidity reserve fixed in dollars?

The reserve starts as a percentage of today's liquid assets, then stays fixed in dollars so it is easy to compare over time.

Are future commitments included?

Not by default. The test starts with your current unfunded commitments. You can add new yearly commitments under Advanced.

How are severe and moderate stress defined?

Severe uses your full stress settings; moderate uses half. They are scenarios, not forecasts.

What is the additional commitments output?

The largest one-time increase in unfunded commitments that the severe case can absorb while staying above the reserve and 1.0× coverage. 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.

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Private Markets Liquidity Dashboard
Private Markets Liquidity & Cash-Flow Plan
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