It’s always the portfolio… its diversification and composition, the relative performances and correlations, the needs of its overseer, and the chain of others who come in and out along the line.
Private equity and venture capital fund managers may at any point be caught between the urgency of portfolio companies and that of their limited partners. The limited partners, who often are fund managers themselves, are caught between the needs of their portfolio positions and their capital sources on the other side. And so on.
It’s a delicate situation all along the way of financial intermediation, where the two endpoints of the line – the individual whose savings and livelihood is ultimately at stake, and the business that gets funded or doesn’t – are in a sense portfolios of one, or highly concentrated in any case, all-in, so to speak, and exposed to their own concentrated profile.
When the chain of go-betweens for a variety of reasons gets disrupted, this is also an opportunity. What doesn’t kill you makes you stronger, as they say. Now is a good time to get strong.