Institutional investors today face a new paradigm: consistently good, risk-adjusted returns, not occasional outperformance, are needed to meet long-term goals. This paper explores how a new generation of private market assets with enhanced liquidity, lower leverage, and downside protection—may warrant a fresh mindset around allocation strategies for institutional portfolios.
Key Takeaways
- Rethinking portfolio architecture: Institutional investors can unlock higher Sharpe ratios and more resilient outcomes by adopting a total portfolio approach that breaks down public-private silos.
- From exposure to foundation: Hybrid and IG private credit strategies can replace traditional public market exposures while offering better downside protection and income.
- Quantified benefits: Portfolios with up to 80% private markets exposure outperformed traditional 60/40 models in stress testing scenarios.
- Execution matters: GPs must scale proprietary sourcing and optimize structuring to deliver on the alpha promise of private markets at scale.
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November 11, 2025
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