Garcia: Private asset tracking error against public benchmarks catches up over 3-5 years
Dominic Garcia · Dominic Garcia – Risk-based Investing at New Mexico PERA (Capital Allocators, EP.187) · Apr 5, 2021 · at 32:45
Dominic Garcia, CIO of New Mexico PERA, discusses the measurement slippage caused by valuation lags when benchmarking private assets against public market equivalents.
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“The tracking error that we're generating from our private assets, a good chunk of that is really this lagged effect relative to our public market equivalents. It catches up over a three-year rolling, a five-year rolling period, but that's really where the slippage is, is trying to measure your private assets back to a public market equivalent, and trying to ensure that that smoothing or lagging effect is minimized when you're really evaluating.”
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