Aneet Deshpande

You know, you're funding a growth asset.

It should be sourced from a growth asset to keep your asset allocation in check.

Of course, I think what happens a lot of times is the market's in disarray or something's going on when you do get those calls.

And so the question that becomes more muddied, do you sell a depreciated asset in your growth assets to fund that?

In other words, just to put a finer point on this, do you sell your S&P 500 position to fund your buyout growth, your growth equity asset?

commitment that you've just been called for.

Ordinarily, we would say, yeah, that makes sense.

The reality is, if the market's down 20%, the S&P 500 is down 20%, you just start to have these probabilities start to go in your favor of keeping money there instead of taking money out.

And so you have a different problem there of sourcing from maybe relatively appreciated assets or assets have done better than the growth asset that you've just talked about.

The biggest issue during times of distress is denominator effect.

In times of duress, you have public markets are decreasing and your private markets are staying relatively intact for all the reasons we know.

And so you have a higher proportion of private assets than you would have otherwise normally thought prior to that decline in public markets.

So that causes a little bit of friction too.

The nuance there is for short duration strategies that we may be deploying it, cash is probably the right thing.

If you're talking about private equity, the six-year investment period, that's a different liability construct.

So it really is just, it should be dependent on what that investment period looks like, informed by your own pacing assumptions.

And so you don't want to, the scenario you don't want to be in ultimately is a short duration liability, basically the capital got funded by a long duration asset like public equity.

That's where you have to be mindful of.

Let's use today as a good example.

So the S&P 500 has been up, you know, it's doubled in five, four, five, three, four, three and a half to five years, whatever it is, it's up, you know, double digit percentage points, 20, over 20, over 2018, whatever it was last year.