BIP Capital says RIAs cap private equity allocations based on 10-year liquidity budgets
XLF•BIP Capital urged registered investment advisers to size private equity allocations around liquidity budgets, citing decade-long capital lockups. Advisory clients averaged a 2.3% allocation to alternatives in 2024, compared with 16.8% private equity at endowments in fiscal 2025.
1. Liquidity budgets matter
BIP Capital’s analysis urged RIAs to size private equity allocations based on liquidity budgets rather than return targets, given decade-long capital lockups. Average advisory-client alternatives allocation was 2.3% in 2024, compared with 16.8% private equity at endowments in fiscal 2025.
2. Redemptions and managers
Private equity distributions were about 17% of net asset value in 2025, below the 10-year average of 26%. Redemption requests exceeded quarterly caps of 5% at 10 of 16 tracked non-traded business development companies in the second quarter of 2026. The analysis flagged manager selection as a swing factor, finding weak post-2000 buyout persistence while venture capital persistence held.
