Discuss what to watch when overseeing an alternatives programme after it is in place

Monitoring covers both the programme and each manager. At programme level, track the actual versus target allocation, commitment pacing, unfunded commitments and liquidity, and rebalance through future commitments rather than sales. At manager level, watch for style drift, changes in key personnel, organisational or ownership changes, operational weaknesses and alignment of interests through fees. Performance should be measured with money-weighted measures such as internal rate of return or public market equivalents for private funds, because managers control cash flow timing, and early results suffer from the J-curve. Benchmarks for private assets lag and are hard to replicate. The trap is judging a young private fund on its early negative returns.