Private Equity Fund of Funds

A private equity fund of funds pools capital from investors and invests in private equity limited partnerships.

Benefits of a Fund of Funds

• Private equity investing is typically reserved to wealthy individuals with substantial money for investing, usually more than $250,000. Fund of funds require smaller investments and so present an alternative for smaller private equity investors.
• Fund of funds offer the benefit of diversification by investing in a variety of different funds, and even different industries.
  

Disadvantage of a Fund of Funds

• A fund of funds charge an additional layer of fees for the fund of funds manager.
• The minimum requirement is still substantial and may be too much of a commitment for some investors.
  

Link to This Resource: Private Equity Fund of Funds

http://privateequityblogger.com/2008/07/private-equity-fund-of-funds.html

Private Equity Outlook

A recent report on private equity revealed the most pessimistic outlook in five years.

Of 100 private equity executives Grant Thorton surveyed, 85% predicted deals would be smaller in the coming year. The majority of those executives also expect the number of deals to drop. Industry experts believe that this slump is a reflection of the credit crunch and declining economy.

The report was not all bad news, at least for the private equity-owned companies. 84% of the surveyed executives expect their portfolio to grow in the next 12 months, 34% predict major growth. Employees for private equity-owned companies also have some good news, only 2% of those PE executives plan to reduce portfolio company staff, rather the majority plan to increase staff.

With the crunch expected to last at least a year, private equity executives are taking a longterm view.

Link to This Resource: Private Equity Outlook

http://privateequityblogger.com/2008/07/private-equity-outlook.html