medium · FRM Part 2 Risk & Investment Management
An Endowment has a target of 30% in Private Equity. Following a 25% drop in public equities, the Private Equity NAV is only marked down by 2%.
What is the primary management tool used to prevent this from forcing a 'fire sale' of the illiquid assets?
- Ex-ante commitment pacing and liquidity reserves
- Backfill bias adjustment
- The Sortino ratio's downside protection
- Increasing the management fee to cover margin calls
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