What is a Fund of funds?
A fund of funds (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities This type of investing is also referred to as multi-manager investment.
There are different types of FOF in the marketplace including fund of venture funds, fund of hedge funds and fund of private equity funds.
HFI Holdings is a private equity FOF that is focused upon investing into private equity funds that have investments in natural resources and infrastructure.
HFI Holdings constructs its portfolios of managers with a proven performance track record across geographies and strategies
What is the difference between a private fund of funds and a public fund of funds?
A private fund of funds is an investment company that has a fixed term (i.e. 8 years).
A public private equity fund of funds is a company that floats on an exchange with the purpose of committing capital to traditional private equity limited partnerships.
“Indirect” indicates that the company does not directly invest capital to private equity deals but “indirectly” via investments in limited partnership, so this category could be described as ‘actively managed traditional private equity’.
An investor buys a share of the listed company over an exchange and in the end he owns a portfolio of limited partnerships diversified across vintages, regions, etc.
HFI Holdings will be floating publicly so that new investors can participate in its portfolio of private equity funds strategy.