PT - JOURNAL ARTICLE AU - J. Heath Cardie AU - Katherine A. Cattanach AU - Mary Frances Kelly TI - How Large Should Your Commitment to Private Equity Really Be? AID - 10.3905/jwm.2000.320386 DP - 2000 Jul 31 TA - The Journal of Wealth Management PG - 39--45 VI - 3 IP - 2 4099 - https://pm-research.com/content/3/2/39.short 4100 - https://pm-research.com/content/3/2/39.full AB - The authors start by observing that private equity, as an asset class, has a unique pattern of cash flows which makes it difficult to match an investor's asset allocation target with their actual investments in private equity: Commitments are typically drawn down over a number of years and distributions usually begin coming back before all the capital is called. This makes it difficult for investors to achieve their long-term asset allocation goal in this asset class. They then discuss an investment model that provides a more accurate projection of future private equity exposure based on a number of variables and industry standard cash flows. They show how to plan commitments to private equity based on that model, which was constructed using parameters judged conservative, but realistic for the current and anticipated market environment.