PE Glossary
Fund-of-Funds (FoF)
Fund-of-Funds · An investment vehicle that allocates capital across multiple PE funds rather than investing directly in companies. FoFs provide diversification but add an extra layer of fees.
Example
A €500M fund-of-funds invests across 15 separate PE funds rather than directly in companies. LPs in the FoF gain diversification across vintages, strategies, and geographies through a single commitment, but pay management fees at both the FoF and underlying-fund layers.
Related terms
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