We conclude our series on the Private Equity liquidity crunch with this question: What do scarce realizations mean for LPs constructing a portfolio in today’s environment? Having reviewed tactical tools and strategies available to investors to find liquidity, deploy capital, and select managers, we turn to building a sound and profitable portfolio.

Every limited partner is unique, but they have commonalities when it comes to assembling a long-term PE portfolio for the long-term. Consistency, balance, and matched goals and outcomes are always important. But what happens to that portfolio in a capital-constrained world with depleted cash in-flows?

Vintage concentration is one problem that stems from LPs being unable to deploy dollars consistently in all markets, regardless of distributions and denominator effect. But investing continuity and vintage diversification are key to optimizing portfolios. Neither trying to time the market with fund commitments nor standing on the sidelines are great options. Greedy over-commitments or fearful under-investments can skew a portfolio to miss LP objectives. Discipline and consistency across vintages are key; a lesson equally applicable to underwriting a GP.