Private market commitment pacing

October 2024

This paper provides insights into the process for setting the appropriate pace of commitments for private market programs. The output of the process is typically a multi-year plan that lays out a path of annual commitments designed to achieve an investor’s desired portfolio allocation.

The commitment pacing process answers questions like “how long will it take to reach a target allocation?”, “how should commitments be allocated across time and strategies to reach ideal diversification?”, and “when will a program become cash flow positive?”. Importantly, a commitment pacing model should be flexible enough to adapt to changes in the markets, such as plateauing distribution rates or increasing use of co-investments and continuation vehicles.