Private equity concentration risk usually shows up one fund at a time: a large position, a sector bet, a single sponsor. The harder risk to see is the same company owned by several of your managers, each reporting it in its own format and at its own value.
This guide covers where concentration builds in an LP portfolio, how to measure it across GPs, why two managers can value the same company differently, and how to set limits that hold up once you look through the funds.
Key takeaways
- Overlap is normal. Club deals, syndicated rounds, co-investments, and continuation funds put the same company in more than one vehicle.
- Measure the total. Add your look-through share of every fund position and your direct co-investments by company before you apply a limit.
- Different marks are not always errors. Different share classes carry different rights and values per share. The same class on the same date at a different price needs an explanation.
- Marks do diverge. A study of mutual funds holding the same private companies found valuations that differed by as much as 25.6% across fund families.
- Concentration has several axes. Track single company, sector, country, sponsor, and vintage, not only the largest position in each fund.
Where concentration builds in an LP portfolio
Single company
- The same company held through several funds and co-investments.
- Small in each fund, large in total.
Sector
- Different strategies that converge on the same industries.
- Visible only after you map every fund to one taxonomy.
Sponsor
- Several funds and co-investments with one GP.
- Measured on NAV plus unfunded commitments.
Country and currency
- Underlying companies concentrated in one market.
- Currency exposure that the fund’s domicile does not show.
Vintage
- Commitments clustered in a few years.
- Holdings bought under the same market conditions.
Seniority
- Equity in one fund and a loan from another to the same business.
- A restructuring hits both positions.
Why the same company appears in several funds
- Club deals and syndicates. Large buyouts and growth rounds often have several sponsors, each investing from its own fund.
- Co-investments. You add a direct position next to a fund that already owns the company.
- Follow-on rounds. In venture and growth portfolios, new investors join at each round, so two of your managers can end up in the same company in different classes.
- Continuation funds. GP-led secondaries move companies from older funds into new vehicles that you may also back.
- Private credit. Sponsor-backed companies borrow from direct lenders, so your credit funds can lend to companies your equity funds own.
How to measure concentration across GPs
| Metric | Calculation | Source |
|---|---|---|
| Single-company exposure | Your look-through share of every fund position plus direct holdings, by company | Schedules of investments, co-investment statements |
| Top-company share | Your largest company exposures as a share of private NAV | Look-through |
| Sector share | Exposure by industry as a share of private NAV | Look-through, mapped to one taxonomy |
| Sponsor share | NAV plus unfunded commitments with one GP, as a share of the total | Capital account statements |
| Overlap count | Companies you hold through two or more vehicles | Look-through |
The inputs are the same ones you use for look-through analysis: each fund’s schedule of investments, scaled to your share, plus your co-investment statements.
Example: the family office’s largest exposures
This continues the family office from our look-through and co-investment examples: three fund interests and one direct co-investment, with private NAV of $17.1 million at June 30, 2026.
Largest single-company exposures ($000)
| Company | Held through | Securities | Your exposure ($000) | % of private NAV |
|---|---|---|---|---|
| Portfolio Company A | Fund III, Fund IV, direct co-investment | Common stock, Series B preferred stock | 3,610.0 | 21.1% |
| Portfolio Company B | Fund III | Series C preferred stock | 1,326.0 | 7.8% |
| Portfolio Company F | Fund IV, Credit Fund I | Series D preferred stock, senior loan | 1,180.0 | 6.9% |
| Portfolio Company C | Fund III | Common stock | 990.6 | 5.8% |
| Top four companies | 7,106.6 | 41.6% |
Four companies make up 41.6% of private NAV, and the largest, Company A, comes from three positions. Healthcare services overtakes software as the largest sector once the co-investment is added: 32.0% against 31.8%. And 53.2% of private NAV sits with one sponsor, through Fund III and the co-investment beside it.
Illustrative example. All funds and companies are fictional. Fund positions are scaled by the family office’s share of each fund’s net assets.
When two GPs value the same company differently
In the example, Fund III carries Company A common stock at $6.19 per share and Fund IV carries Company A Series B preferred stock at $10.00. Those are different securities with different rights, so different values per share are expected. Now suppose a third manager reported Company F Series D preferred at $9.20 per share in the same quarter that Fund IV reported it at $8.00. Same class, same date, 15% apart: that gap needs an explanation.
Gaps like that happen. In a study of US mutual funds holding private companies, researchers found that valuations of the same private security varied across fund families by as much as 25.6%. One example: WeWork’s Series G shares were valued at $41 billion, $30 billion, and $25 billion by different fund managers in the same quarterly reports. The study covered mutual funds, not private equity GPs, but the mechanics are the same: the same company, different models, different dates, different judgment.
Common reasons for a gap
- Different securities. Liquidation preferences, seniority, and conversion rights change the value of each class.
- Different dates. One GP marks at quarter end, another relies on financials from the prior quarter.
- Different methods. Multiples, discounted cash flows, and recent transactions can produce different values, and each GP calibrates them in its own way.
- Stale marks. A position carried at its last round price for several quarters may not reflect the business today.
For how GPs set these values and what the fair value notes disclose, see our guide to Level 3 assets.
Concentration limits that work across managers
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Define each limit on look-through exposure
Single company, sector, and country limits apply to direct plus look-through exposure, not to fund NAVs.
-
Measure sponsor exposure with unfunded commitments
NAV alone understates how much of your future capital one GP controls.
-
Set a valuation gap threshold
When two vehicles mark the same security on the same date more than a set percentage apart, ask both GPs for their basis.
-
Test before you commit
Run new commitments, co-investments, and secondary purchases through the limits before you sign.
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Review every quarter
Recalculate when new schedules of investments arrive, and record which quarter each fund reflects.
What can hide concentration
- Condensed schedules. GPs may name only positions above 5% of a fund’s net assets, so smaller overlaps hide in grouped lines.
- Code names and holding companies. The same business can appear under different names in different funds.
- Funds of funds. A fund of funds has to name only the underlying holdings above 5% of its own net assets.
- Reporting lags. Schedules arrive 45 to 90 days after quarter end, so a new overlap can exist for a quarter before you see it.
How FundCount surfaces overlap across GPs
FundCount AI Document Intelligence collects statements from your investor portals and email, converts them into accounting-ready data, and posts them to your books, with the source document one click from each posted figure. It now also extracts the schedule of investments from GP financial statements, so holdings from every manager land in one dataset.
- Extracts asset-level data from GP financial statements: security name, industry, country, round or share class, shares, cost, and fair value.
- Tracks quarter-over-quarter movements in cost and fair value for each holding.
- Shows exposure by industry, country, and share class, filtered by year, quarter, fund, and holding company.
- Shows where the same security appears across different GPs.
- Keeps co-investments, valued from their own schedules of investments, next to fund holdings.
The extracted data sits in the same platform that runs FundCount’s portfolio accounting, partnership accounting, and reporting, used by family offices and by the fund administrators that report to LPs.
Watch-outs
- FundCount extracts what each GP discloses. Grouped lines in a condensed schedule stay grouped until the GP provides the names.
- Holdings data covers what each fund owns and what it is worth. Company KPIs such as revenue and EBITDA come from GP portfolio company updates.
Find the companies your managers share
In a guided walkthrough on real-world scenarios, we extract holdings from several GPs’ financial statements and show one company held through two managers, with each manager’s mark.
FAQs
What is concentration risk in private equity?
The risk that a large part of your portfolio depends on one company, sector, country, sponsor, or vintage. For LPs it often builds across funds, where no single fund report shows it.
How do LPs measure concentration across funds?
By looking through each fund to its holdings, scaling them to their share of the fund, adding direct holdings, and grouping the results by company, sector, and country.
Why do GPs value the same company differently?
They may hold different share classes, mark on different dates, use different methods and inputs, or carry a stale value. Only a gap in the same class on the same date points to a real disagreement.
What concentration limits do LPs use?
Policies vary. Common limits cap single-company, sector, and country exposure on a look-through basis, and sponsor exposure on NAV plus unfunded commitments.
Can a condensed schedule of investments hide overlap?
Yes. It names only positions above 5% of the fund’s net assets and groups the rest, so a smaller position in a company you already hold can sit in a grouped line.
How often should LPs check concentration?
Every quarter when new schedules of investments arrive, and before every new commitment or co-investment.
Sources and methodology
Sources: Agarwal, Barber, Cheng, Hameed, and Yasuda, Private Company Valuations by Mutual Funds, as summarized by UNC’s Kenan Institute (November 2019); FASB ASC 946-210-50, as quoted in SEC staff correspondence; ILPA Quarterly Reporting Standards, Best Practices, version 1.0 (October 2011). FundCount capabilities come from FundCount’s product documentation and client announcements, reviewed in October 2026.
Example: all funds and companies are fictional and reconcile with our look-through and co-investment examples. The third manager’s Company F mark is hypothetical.
Scope: general information, not investment, accounting, or legal advice.
Published: October 2026.
