Glossary · alternatives
Fund of Funds
Also known as: FoF, multi-manager
- Definition
- A fund of funds invests in multiple underlying funds (typically PE, hedge fund, or VC) rather than direct assets. Provides diversification and access at lower minimum per underlying mandate, at the cost of an additional fee layer.
FoFs typically charge 0.5–1.0% additional management fee plus modest performance fee on top of underlying fund fees. Useful for clients below the direct-fund minimum threshold (e.g. US$1M minimum to a PE FoF vs US$5M per direct PE fund). Singapore family offices often use FoFs for PE / VC access until their alternatives book grows large enough for direct mandate construction.
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