Applying Public Market Principles to the Private Markets

By: Gridline Team | Published: 03/21/2024
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2 minutes

Investors and their advisors typically apply a set of common sense principles to craft a balanced public market portfolio that performs over the long term. Several of these same principles are essential when investing in private markets and can be applied when investing through Gridline.


Trying to beat the market tends not to work. This is why savvy investors typically do not just buy Apple and Microsoft when they could own the entire Nasdaq. 

Historically, most people who say “I’m in alts” are participating in a couple of funds but don’t have a private market portfolio built on proven principles.

Rather than trying to hit a home run with one or two funds, Gridline’s thematic portfolios allow investors to spread capital amongst multiple managers, multiple underlying sectors, more geographies, and more vintages. 

Even if the portfolio were to simply track the private equity market and deliver a median return, for example, an investment in this type of product still boosts the blended average return of an investor’s entire portfolio. Layer on a very large sourcing funnel and rigorous due diligence, and the portfolio’s total results have the opportunity to outperform industry benchmarks.

Portfolio construction. 

The core-satellite approach deployed by Gridline has been utilized in the public space for decades. Investors have beta generators, often at least 40-50% of their public market portfolios, which track the asset class, and potential alpha generators, which can deliver superior returns.

Just as in public markets, in private markets, academic research supports the addition of emerging private market fund managers and their ability to generate significant alpha.

Dollar-cost averaging. 

In public markets, investors often make regularly timed purchases in the asset class to smooth out volatility rather than throwing in a lump sum. 

The same applies to the private markets. For example, if investors want PE exposure, they can participate in our Buyout Portfolio in the 2024 vintage, 2025, and 2026 to get steady exposure to the asset class throughout changing economic conditions.

Keep expenses low. 

By introducing index-based investing, Vanguard became one of the largest and most influential forces in the asset management industry. It offered investors a low-cost way to instantly buy a diversified segment of the public markets. 

Gridline provides this same ability within the private markets. Gridline’s thematic portfolio funds are multi-fund products designed to provide diversified exposure to a particular asset class or strategy with a single investment and low fees.

Funds are carefully selected to include complementary strategies capable of mitigating risk and enhancing return expectations, ultimately providing investors with high-quality, low-cost private market diversification.

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