Strategic Focus - A 15% Allocation to Private Equity

Changes in the macroeconomic environment and markets are challenging the long-standing principles of diversification. Persistent inflation, increased correlation between stocks and bonds, concentration in public markets, and the rise of private markets are transforming portfolio construction.

In this strategy note, Louis Flamand explains why a 15% allocation to private equity currently appears to be an appropriate balance for many high-net-worth investors. This analysis draws on academic research, studies by Cambridge Associates, Bain, PitchBook, and KKR, as well as the practices of leading institutional investors such as Yale, while emphasizing the critical role of manager selection in creating long-term value.

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