Why not direct investing or private equity fund investing?
- Lack of expertise to evaluate companies or fund managers
- Lack of access to top-performing fund managers
- Unable to meet the minimum investment requirement for private equity funds
Fund of funds as an alternative vehicle
- Spread capital out across private equity funds
- Well-diversified: across sectors, strategies, and geographies
- More expensive: 1% mgmt fee, 5% carry (on top of the private equity funds’ fee)