It takes time to build a private equity portfolio. A program should include a number of managers and vintage years, so it is important to get going now.
Choose a Strategy
Pick the strategy best suited for your portfolio based on your investment policy statement.
As ever larger funds, of necessity, pursue ever-larger deals, they all wind up chasing the same transaction and bidding up the price, thus eroding returns. The Mid-Market sector offers the most attractive risk / return relationships.
Because of the time it takes to commit capital in private equity, and that fact that earlier vintage years begin to make distributions of realized investments, and the fund grows in size, committing an amount equal to your deterimed allocation target will never get you to your target allocation. It is necessary to allocate between 1.5 and 2 times your desired allocation to have a reasonable expectation of getting there.
Private Equity is, by definition, true long-term investing. It can easily take 5 years or more or the returns to begin to emerge.
Stay with Winners
As good managers are found, stay with them, and secure capacity rights for subsequent funds.