LP Challenges

The Allocator’s Reality Check in Private Markets

Private markets still belong in long-term portfolios. But the LP job in 2026 looks very different than it did a few years ago.

The challenge is making the asset class function operationally inside a portfolio when:

• distributions are delayed,

• exits are being “engineered” rather than cleanly realized,

• secondaries are becoming a core portfolio tool (not a last resort),

• fund-level leverage tools like NAV facilities are increasingly common,

• and underwriting in private credit is being stress-tested by weaker protections and more aggressive restructurings.

Below are the biggest challenges LPs are dealing with today and the practical allocator moves that separate “still compounding” programs from “stuck in permanent triage.”