Filling the Basket: Fund of Funds Managers Construct Diversified Portfolios
Interest in real estate fund of funds investing is on the rise in the United States, offering a way to invest in a greater number of real estate private equity funds while limiting the number of manager relationships juggled by an already overextended staff.
“The fund of funds universe in real estate is relatively new, compared to the hedge fund or private equity fund of funds universe,” says Ed Casal, CEO of Madison Harbor Capital, a real estate fund of funds manager.
Globally, real estate fund of funds investing has really taken off. According to Maarten Thissen of Kempen & Co., a private placement firm based in the Netherlands, there is not a huge difference between real estate funds of funds in the United States and European funds of funds. The focus is “in general, diversification,” says Thissen.
In addition to the benefits of sourcing, screening and selecting the managers most prepared to execute attractive strat