Denominator Effect Simulator

Visualize how a rapid public equity drawdown causes an SWF's static private market allocation (like real estate) to suddenly breach policy maximums, forcing a halt on new commitments.

Starting Total AUM (Billions USD)

Liquid Allocation (Equities/Bonds %)

Illiquid Policy Maximum (%)

Simulate Liquid Market Drawdown (%)

Portfolio Impact

Starting Illiquid %

New Illiquid % (Post-Drawdown)

Policy Breach Detected!

The fund must halt private market deployment or face forced secondary sales.

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New Illiquid % = Illiquid AUM / (Illiquid AUM + (Liquid AUM * (1 - Drawdown)))

For context, a 20% drawdown in public markets can easily push a fund operating at its 15% private market policy limit (e.g., CIC) into a forced breach scenario.