Some institutions face forced sales due to allocation targets

Fortune notes that some institutions have very strict allocation targets for various asset classes. The Harvard endowment, for example, has a 13 percent target for private equity investments. While the value of the overall portfolio (the denominator) has been plunging as the market sells off, the numerator (the value of specific, less liquid asset classes) has stayed roughly the same because such assets are priced less often. The result is that some institutions are bumping up against allocation targets, requiring some big-time selling. Harvard and Duke are among those who are selling. "Practically every big endowment or pension fund soon will be putting something up for sale," Fortune notes. The secondary market certainly seems willing to take a look.

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