The $1 trillion shortfall if private equity bets turn sour
Investors have to keep sending money to private equity firms even if returns crumble in a downturn
Institutional allocations to private markets have surged in recent years. Large US endowment funds lifted their allocation to private equity and venture capital from 19% to 30% between 2018 and 2021, eclipsing their holdings of public equities. There is no sign that this growth is about to tail off. Quite the opposite in fact.
This large allocation has worked well. Private equity and venture
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