fund of funds - to clarify the story

Just to be cure as recently FoF have been discussed a lot here. It’s clear that “pure” FoF is more like asset management and that it’s hard to transition into PE, IB or so. The only remaining question is: does it make any difference if somebody works at FoF which is also active in secondaries and co-investments? From what I understood secondaries require a lot of valuations, similarly co-investments. Will working on these two provide better skill-set to move into IB, PE or equity research?

I’m not sure what you mean by secondary but we recently instituted a hedging program or option to hedge I should say. Willy

Sorry - I wasn’t precise. I was referring to private equity fof and secondary investments. The reason why I’m asking is that I read (question: is it true?) that while evaluating PE secondary investments once can acquire decent modelling skills (i.e. discounted cash flow analyses, EBITDA and valuation multiple calculations, comparable company analyses, and company/market). However I’m trying to verify whether that’s indeed the case.

FOF in my view is really a knit picky complliance type job. You never really get to make calls on your own as you always outsource that decision to “experts” in their field. Even though you might have, as I have now, a situation in which your Canadian Tactical Mandate is being butchered by a guy who clearly walks the walk, talks the talk but just under performs every way you measure him. He’s better looking that me, sounds way more investment savvy than me, dresses way better than me but basically messed up every call he makes. I mean if you print out an analysis on Zephyr, this guy basically fails to add any value at all. What kills me is that senior management at my firm is not bloodly likely to turf this guy as he manages a few other funds for us and if we dump him for our Canadian tactical mandate we’ll have to do a review of everything he has his greasy little hands on. My point: you can sit in your office at a FOF and KNOW that you can beat the “experts” you hire and not really be able to do anything about it, even though when you apply for jobs at these very firms you get the old “You do not have enough direct relevant experience for the position”. Willy

Well I cannot say. Right now I am looking at adding Global Real Estate as an Asset Class. Our firm is innovative but I still think we are a wayz off from adding PE and the more sexy stuff to our portfolios. A lot of what we do is a fine line between whats good from a portfolio management standpoint and what our advisors can sell/push. Willy