Insights · January 2026 · 6 min read
Most multi-asset mandates carry three assumptions that are rarely written down: that policy rates converge toward a neutral level, that funding costs remain accessible at short notice, and that the largest position can be exited inside a month without moving the market. Each is testable, and none is usually tested.
A mandate that only works if rates fall is a directional bet dressed as an allocation. We ask clients to state the range of terminal rates their spending rule tolerates, then check whether the portfolio still funds its obligations at the top of that range.
Subscription lines and short-dated facilities are convenient until they are not. If a facility matures in a stress period, its renewal is a market event, not an administrative one. We model the renewal calendar alongside the capital call schedule.
Listed exposure can be sold in a day; the same exposure held through a fund may take a quarter and a discount. Comparing the two on price alone overstates the liquid sleeve's advantage and understates its optionality.
Write the three assumptions into the investment policy statement, attach a review trigger to each, and record the date they were last tested. The value is not in the numbers; it is in knowing which numbers would force a decision.