Look-Through Exposure
Look-through exposure is the allocator’s assessment of underlying holdings and risk factors across funds to understand true portfolio concentration.
Definition
Look-through exposure evaluates what an allocator actually owns beneath fund and manager labels. It aggregates underlying sector, geography, issuer, factor, and asset-type exposures across the portfolio. This matters because a portfolio can appear diversified by manager count while being concentrated in the same underlying exposures. Allocator Context Institutions increasingly require look-through analytics to manage correlation, concentration, and hidden beta. In private markets, look-through is harder due to limited transparency and reporting lag, but allocators still attempt it using portfolio company data, sector classifications, and manager-provided exposures. Decision Authority Look-through findings influence committee decisions on sizing and new allocations. If a proposed manager increases underlying overlap with existing exposures, the ticket size is often reduced or the allocation is deferred. Why It Matters for Fundraising Managers that provide clear, consistent exposure reporting reduce allocator uncertainty and improve allocation probability. Allocators do not want surprises—especially hidden overlap that changes portfolio risk under stress. Key Takeaways Reveals true underlying risk and concentration Prevents “diversified on paper” portfolios Transparency improves allocator comfort and sizing A common driver of allocation caps