Fund of Funds
A fund of funds (FOFs) can be described as a fund structure investing into multiple other funds, this type of fund usually invests into mutual funds, real estate, private equity, or hedge funds.
This type of fund looks after a wide diversification and asset allocation, it can either be “fettered” meaning that it will invest into funds managed by one specific management company, or it can also be “unfettered” which in this case it can invest into a wider range of managers from different companies.
What are the key advantages of a FOFs?:
- Great diversification between the strategies
- Risk & volatility mitigation
- Investors have access to funds in which they could not get access to
- Manager(s) expertise into multiple assets class, fund(s) type
What type of strategies are eligible?:
- Hedge funds
- Private equity
- Green energy allocations
- Real estate
- Crypto assets