Operations
Denominator Effect
When public market declines push private market exposure above target, even without new private investment.
Because private NAVs are reported with a lag and tend to be smoother than public marks, public drawdowns can push private allocations meaningfully above policy targets. This forces LPs to slow new commitments or sell on the secondary market.
The 2022 cycle was a textbook denominator-effect period that reshaped commitment plans across the industry.