What diversification changes
A Harbor Portfolios vehicle would hold exposure to several fictional private-market assets across companies, sectors, vintages or credit borrowers. One failure need not take the whole vehicle to zero.
That is a genuine benefit, and a narrow one. Diversification addresses single-name risk only.
What it does not change
The vehicle is still illiquid, still valued periodically by estimate, still exposed to manager and vehicle risk, still subject to transfer restrictions, and still capable of losing a substantial part or all of its value if conditions turn broadly against private assets.
Layered fees can also be higher in a portfolio structure, particularly where underlying funds charge their own management and performance fees.
Reading a portfolio vehicle
Look at how concentrated the largest holdings actually are, how correlated the assets are, the drawdown or capital-call mechanics, the reporting frequency, and the expected life and wind-up plan.
A portfolio of ten assets in one sector and one vintage is far less diversified than the number suggests.