ILPA White Paper: Policy Benchmark Selection

A universal requirement for sophisticated investors is to continually measure the success of its investment strategy. However, the unique nature of private investments can complicate an LP’s selection of an appropriate high-level performance goal, or Policy Benchmark, for the asset class. This report is not a recommendation for a specific Policy Benchmark methodology, as LPs’ allocation strategies, risk tolerances, and liquidity requirements (among other characteristics) can vary widely. Rather, the report’s goal is to provide a comprehensive overview of all considerations to support each LP’s selection of a Policy Benchmark for its private investment portfolio.