Other People's Money with Max Wiethe The Market’s Biggest Whales are Making Huge Changes: Total Portfolio Revolution | Steve Novakovic of CAIA
Jan 13, 2026
Steve Novakovic, Managing Director of Educational Programs at CAIA, shares his insights on the shift from strategic asset allocation to the Total Portfolio Approach (TPA). He highlights the significance of CalPERS' recent changes and discusses the evolving landscape of private markets. Novakovic explains how secondary markets are enhancing liquidity for investors and delves into the friction between hedge fund fees and performance. He emphasizes the necessity of educating retail investors about alternatives and looks ahead to exciting CAIA educational initiatives for 2026.
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2025 Distributions Improved — Watch Continuations
- Distributions from private equity improved in 2025 but may be inflated by continuation funds.
- IPOs can unlock material liquidity, but timing and manager lockups may delay cash to LPs.
Use Secondaries To Manage Liquidity And Pacing
- Use secondaries as an active liquidity and pacing tool when distributions lag.
- Expect reasonable marks and no stigma; secondaries let LPs rebalance and control vintage exposure.
Secondary Discounts Reflect Fees And Asset Type
- Secondary discounts vary by asset type; mid‑market buyout portfolios often trade at ~5–10% discounts.
- Discounts reflect embedded fees and the buyer prepaying future manager fees.