Lower volatility is an "illusion". Since there's no active market for private market assets, their valuations are in most cases subjective (DCF or multiples based - Level 3 for Financial Reporting ). An exception would be publicly held investments but they don't live long enough in their portfolios nor they are a big part of them nowadays. Private market funds provide reports to their LPs quarterly at best, so any estimates of volatility are based on subjective returns in discreet time intervals so they are too smooth to make sense. There are de-smoothing approaches but still, they are not based on objective valuations