Allocators stopped treating it as a trade

The interesting change in institutional participation this year is not the size of allocations, which remains modest. It is the duration. Positions opened in the first quarter were still open at the end of the second, through a drawdown that would previously have triggered exits.

That is the signature of a strategic allocation rather than an opportunistic one, and it changes what price action means. Flows that do not respond to volatility are flows that do not amplify it.

What the mandates actually say

• Sizing set as a share of the alternatives sleeve, not as a standalone bet.
• Rebalancing bands rather than discretionary exits — mechanical, and therefore countercyclical.
• Custody requirements that exclude most venues before any investment view is formed.
• Reporting cadence aligned to the rest of the portfolio, monthly rather than daily.

The committee approved a band, not a view. Nobody rings me when it moves ten per cent any more.

What to watch

Whether the rebalancing bands survive their first genuine drawdown at scale. They have not been tested by one yet.