More Private Than You Planned

Last week we wrote about putting everything you own into one vehicle. If you tried it, even on paper, you probably discovered something you didn't expect. A lot more of your money is in private investments than you meant to have there.

You're not the only one. Many investors are in the same spot right now. They still have capital calls to pay on old commitments, very little cash is coming back, and there's no room left for anything new.

How you got here

Two things did it.

The first is the denominator effect. When listed markets fall, your shares and bonds get marked down in real time. Private positions don't. They get revalued slowly, if at all.  So private ends up a bigger share of your total, even though nothing in that pot got better.

The second has gone on for longer, and is likely to get worse. The cash has 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 for new capital calls with old distributions. Now you pay with fresh cash. The same cash you wanted for the next deal.

Fund managers are struggling too. According to McKinsey, global private equity fundraising fell 17% in 2025 to about US$616 billion. In Asia-Pacific it fell 49% to US$49 billion.

Check the numbers first

Before you do anything, you should calculate how overallocated you are. The number in your head is probably wrong.

Think about what's in there. A fund statement from two quarters ago. A last-round price from 2021. A loan you still carry at par because the borrower hasn't technically defaulted. Some of these are too high and a few are too low. You won't know which until you go back to the documents, the same way we did in Deconstructing the Cap Table.

Here's what you need to pull together:

• Every private position, what it is carried at, and the date of that mark.
• Where each mark comes from: a recent trade, the manager's estimate, or just what you paid.
• Your unfunded commitments, and the calls you expect over the next two years.
• The distributions you expect over the same two years, from exits that are actually underway.
• Your listed portfolio at today's prices, next to the allocation you meant to have.

Look hardest at the two-year cash numbers. If you're 10% over target with no calls coming, you can wait. If you're on target but have a year of calls and nothing coming back, you shouldn't.

Organise your portfolio

Once you know what you hold, it usually falls into four groups.

Four kinds of private position, and what to do with each.

The position	What to do
Performing, and you want to keep it	Keep it. Stop adding new commitments instead.
Performing, but you'd rather have the cash	Sell it in the secondary market while there is still a fair bid. We covered how secondaries are priced in What are Secondary Market Transactions.
Stuck, but still worth something	Don't sell it for pennies on the dollar. Have someone work it, under the mandate we set out in Hand Over the Position.
Worth nothing, or close to it	Write it off or sell it to us for a dollar, and stop paying to administer it.

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When you sell an LP interest, the calls go with it

For most people the real problem is the calls, not the marks. When you sell an LP interest, the buyer takes over your unfunded commitment too. You get cash for today's value and you stop owing the future calls.

That should change how you look at the discount. A buyer will usually bid below the reported NAV. A lot of investors say no to that because they don't want to book a loss. So they hold on to save a few points, keep paying calls from fresh cash, and turn down new deals because there's nothing left to invest.

It doesn't mean you take any bid. The price depends on how far along the fund is, how close its exits are and how much commitment is left. Compare the bid with what holding the position will cost you over the next few years, not with the NAV on the statement.

What changes when you sell an LP interest.

	Hold the LP interest	Sell it in a secondary
Reported value	Stays on paper, at the manager's mark.	Paid to you now, usually below NAV.
Future capital calls	Still yours to fund.	The buyer's.
Cash back	Whenever the manager exits.	On completion.
Your next investment	Paid from fresh cash, if you can.	Paid from the proceeds.

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Committing again

You don't have to stop investing in private markets. You just need to check every new commitment against the calls you already owe and the cash you expect back.

If you do have cash, you're in a good spot. Fewer people are writing cheques, so you can ask for terms you couldn't get a few years ago: staged funding, preference rights, convertibles, tranches tied to milestones. Read them properly though. They decide where you actually rank if the company runs into trouble later.

What we do

We start by rebuilding your book. We read every position from its own documents and check every mark against something other than the manager's estimate. Then we give you a two-year view of calls and distributions you can plan around.

After that it is usually a mix. You keep the positions you want. The ones worth selling go to the secondary market at a price you understand. The stuck ones get worked under a mandate. Whatever is left can go into your own segregated portfolio and get valued independently every period.

The honest floor

Some of the marks you have been carrying will come down once someone independent checks them. Your allocation may look worse after we rebuild it, not better.

If you sell and the fund later has a great exit, the buyer gets that, not you.

Some LP agreements restrict transfers or need the GP's consent, and some GPs take their time. Check the documents before you count on a sale.

A stuck position resolves when the company or the borrower does. It won't move on your timetable, and we explained why rushing it costs you in Workout Speed Is a Trap.

If you have more in private investments than you intended and the calls keep coming, send us a list of what you hold. We'll tell you what to keep, what can be sold and roughly at what price, and what needs working.