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Research from Preqin shows multi-manager private equity vehicles are increasingly turning to new avenues to attract capital, including emerging managers and alternative investment methods. Among the reasons explaining why private equity funds of funds have not kept pace with the growth of the overall private equity market since the financial crisis, Preqin cites the expansion of in-house teams at large investors and a desire to go through direct commitments to comingled funds. In response, the report notes, funds of funds are targeting both emerging managers and the smaller investors that may lack the experience or expertise to evaluate them. Funds of funds are also differentiating themselves by making greater use of alternative investment methods like co-investments, SMAs and secondaries.

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