PODCAST: Should you build your portfolio on secondaries?

Academic Cyril Demaria and Greenhill's Bernhard Engelien debate the role of secondaries in portfolio construction and what LPs should bear in mind.

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For limited partners trying to build a private equity portfolio, a common first step is to invest in secondaries.

The idea is that investing in diversified pools of mature assets leads to quick distributions, helping mitigate the J-curve seen in the early days of a portfolio’s life. A book published over the summer, Asset Allocation and Private Markets: A Guide to Investing with Private Equity, Private Debt and Private Real Assets, casts doubt on this perceived wisdom.

In this episode of Spotlight, we examine the arguments with co-author Cyril Demaria and Greenhill’s head of European Capital Advisory Bernhard Engelien. We also look at hard-and-fast rules that LPs should bear in mind when building out a PE portfolio or starting one from scratch.