Institutional investors must deal with irrevocable commitments, cash flow
uncertainty, and illiquidity when making new commitments to maintain their
portfolio exposure to private equity funds. This study develops a dynamic
recommitment strategy to preserve the strategic allocation to private equity.
For each period, the level of new commitments is determined by characteristics
of the existing private equity portfolio, including received distributions,
uncalled capital from old commitments, and the current allocation relative to
its target level.