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Why do private assets become a bigger share of a portfolio when markets fall?
When listed markets fall, your shares and bonds get marked down in real time. Private positions don't, so private ends up a bigger share of your total even though nothing in that pot got better.
This is called the denominator effect. The listed side of your portfolio shrinks on paper immediately. The private side gets revalued slowly, if at all. The ratio shifts, and suddenly you're overweight private without buying a single new position.
A second problem runs alongside it. Cash stopped coming back. Funds pay out when they sell a company or list it, and there have been far fewer of both. Bain's 2026 private equity report puts distributions to LPs below 15% of NAV for the fourth year in a row.
The capital calls didn't stop though. You made those commitments when times were better and you planned to pay new calls with old distributions. Now you pay with fresh cash, which means less room for anything new.