portfolio construction discussion - family office
I've taken on directorship at a small family office (between $500M and 1B). It's just me and the principle. 50% of the portfolio was in real estate, but was sold for cash at the peak of the market. He will redeploy into properties at distressed valuations over the next few years. The remaining 50% has been held in hedge. So allocation is:
50% - real estate
20% - PE funds
I am trying to understand what the potential re-allocation strategies might be in order to move more towards an endowment-type model? This seems like it's overly skewed towards alternatives, and in particular is heavily weighted towards HFs which I'm not sure makes sense. How can I learn more about portfolio design? Read the Swenson book already, but that's just starting point.
- Yale’s 2021 target portfolio is:
- Hedge funds: 23.5%
- VC/growth: 23.5%
- PE/LBOs: 17.5%
- Foreign equity: 11.75%
- & cash: 7.5%
- Natural resources: 4.5%
- US equity: 2.25%
Clearly Yale loves its alternative investments, and has a surprising weighting in favor of VC, and a surprisingly light weighting for US equities. Ideas, thoughts?