Funds of funds offer increased diversification

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Question

Funds of funds offer increased diversification, greater access, liquidity, and additional value-adds, like risk management overlays. There are many funds, and each of these funds is a little bit different. André's fund of funds focuses on a variety of asset classes, including private equity. Among other things, these funds invest in private equity funds with different vintages. They are also major players in the secondary market. All of this can soften and stretch the J-curve's contour, changing the distinct cash flow profile of the private equity space. Thus, when you invest in a private equity fund of funds, your money is put to work faster and more often immediately, as opposed to being gradually deployed as with a traditional fund. This creates a better likelihood that one of the funds is in the distribution or harvesting phase, allowing greater access to liquidity. When using either type of fund of funds, investors receive many benefits. For these benefits, there must be an additional layer of fees. Do you think investing in a fund of funds is worth it? Yes No

Reference no: EM133674298

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