There may be a supply shortage of high-quality private-equity funds. By one measure, roughly three-quarters of family offices have 10%-to-20% of their holdings in the asset class. Some have even more. The basis for that exposure is consistently strong performance. Private-equity fund managers in part have the ability to invest in a universe of companies worldwide that may otherwise be inaccessible to those who trade public securities. And of course the sour tone of hedge-fund performance has realigned family-office interest elsewhere. The challenge for many investors is access to preferred private-equity opportunities, generally defined as those funds offered by the largest players. New-to-market managers may struggle to meet arbitrary pedigree and track-record standards. ■
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