Thanks to Justina Lee of Bloomberg for highlighting this recent study by the research team at Dimensional Fund Advisors on the value of allocations to private markets investing. This thoughtful and thorough study adds interesting evidence to both the total return and diversification thesis of investing in private markets over a long period of time. While enthusiastic about the use of private market strategies for diversified investing, we have been cautious about survivor bias and self-managed valuations and smoothing practiced by many managers, which could be generating significant bias in less well-researched assessments of the asset class. This paper adds highly useful insights to the argument. Thanks again to the team at Dimensional, and great reporting by Justina Lee and the team at Bloomberg!
