An allocator is a professional or institution responsible for distributing capital across multiple investment strategies, managers, or asset classes, typically to optimize returns and manage risk.
Allocators include pension funds, endowments, sovereign wealth funds, family offices, and fund of funds. They assess a wide range of investment opportunities and conduct thorough due diligence before deploying capital. Their role often includes defining mandates, monitoring performance, assessing operational risk, and ensuring alignment with long-term financial objectives. Allocators work closely with General Partners (GPs) and analyze fund terms such as liquidity, drawdowns, and track record verification. Their influence shapes fund structuring, manager selection, and often includes early-stage discussions like soft and hard circles.
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