New research adds fuel to debate over need for private equity funds of funds

New research adds fuel to debate over need for private equity funds of funds

A growing number of consultants consider the plain-vanilla private equity funds of funds a quaint relic of days gone by, a tool that has outlived its usefulness.

Underlying this chorus is new research showing funds of funds underperform direct investment in private equity funds. Also, investors in funds of funds are paying an extra layer of fees at a time when private equity returns are expected to be lower, competition is driving down private equity fees overall and the cost of implementing a direct investment program also is falling.

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