Conference Agenda

We study how institutional investors manage private equity allocations beyond initial commitments. Using a novel method to identify secondary sales from reporting patterns, we show that public pension plans increasingly use secondary sales of private equity fund stakes to rebalance their portfolios when allocations exceed policy targets. Overallocated plans sell funds with higher asset values and tend to accept larger discounts. Even though secondary sales are costly, they serve as a key rebalancing mechanism under static allocation policies. Meanwhile, overallocated pension plans make only limited adjustments along other avenues, such as smaller new commitments and modest increases in target allocations.