A carefully constructed portfolio of primary fund investments can offer greater return dispersion and the potential for lower overall portfolio risk.

Alternative investment programs are often managed through the use of private investment vehicles, or primary funds, engaged in direct buyout, venture capital, or special situations strategies. These strategies and structures can provide a host of potential advantages to investors, including attractive risk-adjusted returns, low correlations with publicly traded assets, and lower volatility than public markets. However, accessing multiple individual primary funds directly requires having significant assets to invest as well as the appropriate internal infrastructure to research…