Policy, Pacing, Manager Selection and Portfolio Management
Julian R. Sterling
These are the companion files of The Private Markets Limited Partner by Julian R. Sterling.The book on Amazon →
One Excel workbook that closes the loop Chapter 14 leaves open, on the book’s own figures. Around it, a blank version for your own programme, ten working documents to print, forty questions that mark themselves, and three cases the book does not work. All free. Nothing is gated behind a sign-up, and no email address is asked for.
Six workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 22 September 2026.
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This book computes almost everything it asserts — the gross-to-net bridge, the pacing
multiplier, the build-up path, fourteen tables. Chapter 14 is the exception, and it is
the chapter about moving money between instruments. It contains one price, one budget
percentage and one per-deal cap, and no arithmetic.
The saving is 37 basis points. On the chapter’s own fifteen per cent
budget the blended cost falls from 2.54 to 2.17 per cent of net asset value — about 4.4
a year against a cost line of 38, a ninth of it, bought with a decision process, two staff, a
five-day standard and under three executions a year. Real, and some distance from
“meaningfully lowers the blended cost of the whole portfolio”. Halving the cost
line would take 53 per cent of commitments in co-investment and 58 per cent
of net asset value in single assets — what the chapter warns against two paragraphs
earlier.
And “of any scale” points the wrong way. Most of the incremental
cost is fixed, so below roughly 20 a year of budget the overhead eats the saving. There is a
minimum viable scale; the chapter asserts the opposite.
Priced as risk, the whole fee advantage is a 22.8 per cent loss rate. A
primary dollar returns 1.544× net; a free co-investment at the same gross returns
2.000×. Break-even is a 1.544× gross multiple — 9.08 per cent a year against
14.87. One deal in four going to zero erases it, and the chapter itself warns twice about
adverse selection in syndicated deals.
Which makes deal count the binding constraint, not the budget and not the cap.
At a cap of one third of a fund commitment, a 15 per cent budget buys 2.7 deals a
year, so one total loss is 37 per cent of the cohort — well
above break-even, and about three and a half years of the entire saving. You need at least
4.4 deals, so a cap near 8 rather than 13. Meanwhile the chapter warns about
deals sized at “three or four times a typical fund commitment” — 120 to 160
— against an annual budget of 35.7. It is warning about a failure its own policy cannot
fund.
The last sheet is the one the book most needed. A co-investment is drawn in full at close, so
it carries 7.73 NAV-years per dollar committed against 6.30 for a primary
— 23 per cent more. An investor running Chapter 14’s policy and
Chapter 5’s commitment budget lands 3.4 per cent over target
without a single new decision, and 15 per cent over if the holds run to seven years. Two
policies from the same book, unreconciled. Twenty-two checks, four of which test the file
against the book rather than against the appendix.
Change the co-investment hold period from five years to seven and watch the overshoot against
Chapter 5’s target go from 3.4 per cent to 15. The investor does not choose that
input — the sponsor does — which is what makes it an exposure rather than a dial.
Then set the per-deal cap to a fifth of a fund commitment instead of a third and watch the deal
count cross the break-even line. Same budget, same staff, a programme that can absorb a failure.
What the arithmetic does not settle
The whole risk argument rests on co-investments having a loss rate no better than the fund deals
they sit beside. If a manager’s syndicated deals show a total-loss rate under ten per cent
and gross multiples within a tenth of the retained book, the concentration objection collapses,
break-even is never approached, and the chapter’s sentence stands as written. That test is
worth running before this appendix is believed, and it is the one that could show it to be wrong.
It also cannot price access — a co-investment sometimes buys a seat rather than a return,
and no multiple captures that.
The same model, for your own programme
The workbook with every input emptied. Enter your own plan and programme; the checks sheet counts what is still missing and tests what holds for any inputs.
Chapter 14 and Appendix F
A blank co-investment model
Plan size, target, your own pacing multiplier, the fund's gross and net multiples, the fee load, the budget, the per-deal cap, the hold period and the running costs. The file gives the saving at six programme sizes, the break-even loss rate, the deals a year your cap allows, the cap that survives one total loss, and the drift against your pacing target. One line tells you whether a single loss puts your sleeve under water.
The book’s inputs are listed in a text file inside the archive. Type them back in and the file returns 37 basis points, 22.8 per cent, 2.68 deals a year and a 3.4 per cent overshoot.
Ten pages to print and use. A4, with margins wide enough for US Letter.
Appendices A to D · Chapters 5, 7 and 11 to 14
Ten working documents
The manager selection checklist of Appendix A, stage by stage. The committee memo in its fixed order, each section with the way it usually goes wrong. The question bank of Appendix C on three pages, with room for the answer as given. The operational sign-off and the red line, condition and monitorable log. The terms worth real leverage and the five clawback questions. The capital account rebuilt line by line, with the watch list. The stressed liquidity forecast with its indicators and the breach protocol. And the re-up checklist with the annual calendar.
A workbook that marks itself. Answer in the yellow cells; the marking fills in as you go.
All parts of the book
Forty questions on the book
Five on the seat and its governance, seven on the economics, eight on portfolio construction, seven on manager selection, seven on oversight and the levers, and six on the three cases below. Numbers are marked to a tolerance, multiple choice to the letter, and the score sheet counts your errors part by part: that is your revision list.
Nothing is hidden. The marking sheet holds every answer, every tolerance, and the reason for each answer.
New material, not a restatement. Three situations the chapters name and never take to a number. Each case is one workbook: the note is the first sheet, the model is the rest, and a checks sheet closes it. Type your own figures in and every finding recomputes.
Chapter 5 · Case one
The budget that has to be a range
Chapter 5 says to present the commitment budget as a range and never runs the scenarios. Run on its own fund, its sensitivities hold: a year longer to exit cuts the budget by a fifth, a year shorter raises it by a third. Then the finding. Held at 238, the budget takes the program to 19.2 per cent if exits slow and 11.4 if they quicken: both outside the band. The ceiling needs at most 223, the floor at least 250. No fixed budget survives both, which is why the decision rule does the work.
Chapter 7 · Case two
The buffer, priced as insurance
The chapter’s foundation needs 112 in its stressed year. The policy buffer of 120 pays for itself against a thin one of 40 if that year comes once in 10 years, secondary route, or once in 13 if equities are sold at the bottom. Tiered, 40 in cash and 80 in short-duration paper, it costs 2.0 a year instead of 3.6 and pays if the stressed year comes once in 30.
Chapter 5 · Case three
The breach that cures itself
Chapter 5’s denominator shock takes the private share to 18.3 per cent. Holding the pace, it is back inside the band within a year as public markets recover. Cutting the next two budgets to 70 per cent stays inside the band from the first year, 13.4 per cent at the lowest. Skipping two vintages, the reflex the chapter warns against, keeps the program below the floor for four years.
in every workbook; in the book’s, twenty-two controls, four of them testing the file against the book rather than the appendix
Every figure is illustrative. The plan, the funds, the deals and the hold periods are invented;
the parameters are chosen so the arithmetic ties back to Chapters 3, 5 and 6 rather than
because they describe any particular market.
Opening the file
The workbook opens in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers. It uses no
macros and no add-ins, so nothing needs to be enabled or trusted. If your spreadsheet asks to
update links on opening, decline — there are none.
What changed, and when
22 Sep 2026
A blank version of the co-investment model, ten working documents, forty questions that mark themselves and three new cases. The book’s workbook can now also be downloaded on its own; its content has not changed.
Closing the DealTwo defensible bridges 20.70 million apart, a peg worth 7.00 million, and the six choices that remove 6.60 of a 12.00 earn-out.
CMBS and CRE CLOsWhere the loss actually lands, from appraisal reduction to realised severity, and what the B-piece is really being paid for.
How to Read a Commercial LeaseThe three refinements chapter 19 names and never performs, and the renewal rate below which the mark-to-market is worth nothing.
How to Read a Credit AgreementWhere the default actually comes from, the cure that costs 5.5 times the other, and the capacity nobody adds up.
How to Read a Real Estate Loan AgreementThe cure ratio in closed form, the four-point window in which the cheap cure works, and the cure sized to the wrong threshold.
Office Real EstateA six per cent yield that returns 3.2 per cent once the re-letting cycle is paid for, and the headline-to-net-effective rent arithmetic.
Private Equity Real EstateBoth worked waterfalls to the dollar, the two capital stacks, and the arithmetic of the promote made changeable.
Private Markets PerformanceThirty-one of the thirty-three figures chapter 19 publishes reproduce exactly — and the two that do not are named rather than quietly adopted.
Raising a Real Estate FundThe chapter 17 funnel run on a calendar — when the first close actually lands, and why more travel does not help.
Real Estate FinanceFour people look at one building and reach four numbers; the lender is whole only above 105,109,489, twelve per cent below today’s value rather than forty.
Real Estate Financial ModelingProperty, development and fund models built line by line, and the modelling test worked end to end.
Real Estate Fund ManagementThe waterfall of 6.11, the build-to-core of 8.7 and the proceeds gap, reproduced as live formulas rather than asserted.
REIT Analysis and ValuationFFO of 532.0, AFFO of 381.0, net asset value and dividend safety — every figure a formula you can change.
Retail Real EstateThe occupancy cost of every unit in a centre, the sixteen per cent of the rent roll no tenant can sustain, and the right-size-convert-or-hold decision priced.
Sale and LeasebackA €179.5 million transaction end to end, with rent cover measured on the entity that actually signs the lease.
Self-Storage Real EstateThe cohort engine behind a 590-unit store, and the rate increase on existing customers priced against the move-outs it causes.
The Fund Finance ProfessionalChapter 8 builds the reported-to-eligible NAV bridge; chapter 9 computes every ratio without it. Two points at every state — and what a subscription line does to the IRR.
The Growth Equity InvestorWhat a pro rata cheque really costs, and the band where defending your ownership loses money.
The Private Credit InvestorThe two coverage ratios are not measured on the same thing: the erosion is 47.7 per cent, not the 28.7 the headline implies.
The Private Equity Fund Controller PlaybookThe book defines IRR, DPI, RVPI and TVPI, tells you to update them at the exit, and prints not one value. Computed: a 1.833× deal inside a fund at 0.892 TVPI.
The Venture Capital AssociateWhat defending a position costs, and how many companies a reserve pool actually defends.
Financial Risk ManagementA fund inside every limit that cannot meet a redemption — and the number that decides it is the one with no currency attached.
Business ValuationThree advisers land 26.8 per cent apart on one company, and the whole gap turns out to be 1.96 points of perpetual growth.
Quantitative FinanceThree models agree to a quarter of one per cent about a number that one unobservable input moves a hundred and three times as much.
Asset ManagementFour people quote four returns for one mandate, all correct and 2.7017 points apart — forty-eight times the manager’s net skill.
Alternative InvestmentsA manager reports 13.29 per cent and the endowment earns 6.26 — both correct, and only a third of the advertised advantage arrives.
Credit AnalysisFour defensible EBITDAs on one borrower give leverage from 3.19x to 6.47x — and the add-back argument is fifty times the covenant headroom.
Venture CapitalOne company out of twenty-eight returns 56.7 per cent of the fund, and half the capital goes in after the decision — at half the return.
Machine Learning for FinanceFive people quote the accuracy of one credit model, all five are right, and the number that decides how much money it makes is none of them.
Commercial Real Estate InvestingThe equity earned 8.6647 per cent and the investor received exactly 8.0000 — the preferred return, and nothing above it.
Mergers and AcquisitionsThe board paper says the deal creates 13,436,667 of value. The arithmetic says it destroys 17,530,855. Nobody is lying.
DerivativesThe treasury report says the hedge cost 1,233,698. That is the interest differential, not a cost.
Treasury ManagementFive cash balances for one company, all correct and 145,600,000 apart — and the revolver that is two-thirds of the liquidity leaves at a revenue fall of 8.4127 per cent.
Financial Planning and AnalysisRevenue 3.0190 per cent above budget and operating profit 16.3209 per cent below it, in the same quarter, with every figure correctly stated.
Energy TradingA position report that is 91.7031 per cent hedged and correctly computed, on a book that is short 2,542,000 MWh — and a margin call of 198,400,000 the next morning.
Construction Cost ControlA contract sum of 26,301,102 became a final account of 29,153,363 on the building that was drawn — and 85.8 per cent of what was lost was knowable on the day it was signed.
Pricing StrategyA list price of 148.00, a pocket price of 112.51, and the nine deductions in between — with what one point of price is actually worth.
Trade FinanceSix routes to payment on one 4,200,000 export order cost between 178,040 and 223,268, a spread worth 14.8 per cent of the margin, and a day of buyer credit costs 1,031.76.
Cost AccountingOne factory costed twice on the same 13,440,000 of overhead, and 4,053,091 moves between four product families.
Contract ManagementA bid 5.50 a unit cheaper, signed on paper worth 9.81 a unit more — and 94.68 per cent of it was knowable on the day of signature.
Capital MarketsFour defensible readings of one bond, the cost of an issue under each convention, and the placement discount computed at a constant discount.
Financial RegulationThree ratios pass and the fourth is in breach by 1,956.0 million: the output floor, the liquidity buffer after encumbrance, and the loan split.
Bank ManagementFour defensible readings of one balance sheet, the deposit beta measured two ways, and the liquidity that lasts 3.9 days.
The Real Estate WorkoutFour ways out of one broken loan, discounted to today, and the 58.7 cents at which a payoff beats enforcement.
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