Once upon a time, a private market investor got rich on paper thanks to a 10-year bull run on the listed equity market. This was somewhat of a mixed blessing.

Our investor wanted to diversify risk and balance his portfolio with other asset classes. However, the value of these assets did not grow as fast as his listed stocks. He was constantly running after his target allocation to private markets. Not only were his private markets funds deploying capital conservatively, the value of these assets was growing slowly. He faced a recurring under-allocation to private markets — a victim of the numerator effect.