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Not sure, but I'd imagine pretty difficult. If you want to be a serious player you definitely need a large amount of capital commitment which in turn means you need the relationships and connects to not only raise that capital but also find the deals to deploy your capital. Now, I may be wrong but I've seen FoFs worth mentioning are generally attached to large asset (alternative asset) management firms, spinoffs from banks or other reputable firms, or started by someone with a lot of clout / tenure in the industry. So on that token it may make sense to me that the folks in the FoF industry are generally more tenured and potentially products of larger orgs who have those deep industry relationships. But that is just my train of thought, could be wrong.
If you have to ask, you can’t afford it
You: "Mama, I'ma gunna bee one a em hedge funndahs. I'ma need mah aylowwence eerly dis weak."
Mama: "Boy, what I tell you bout feedin em hogs? No time tah play buhznusman, go feed em hogs. Then I give yah twuny."
You: "OHH KAHY MAMA. I FEED EM HOGS GOOD, MAMA."
Then you dump it into a discount broker, and buy some shares of whatever ETF you please. You're now you're own little fund of funds.
Go get em, tiger.
At the present your only way to launch a fund of funds that everyone can invest in is either (a) launch your own 401(k) provider and include FoF as a part of the allocation - there are new DOL rulings on this in the past year and FoF can't be a huge allocation, (b) launch as a publicly listed company investing balance sheet money or (c) sell bonds that are backed by PE commitments with a very well-known backstop. May be some insurance related tactics to get a small allocation as well but not super familiar with that space.
All three are extremely difficult (basically impossible) and you would likely have difficulties getting allocations to top - tier PE sponsors as FoF can be a huge headache as clients due to reporting requirements.
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FOF are generally for the pretty rich to get access to investment opportunities the really rich can access. For example a successful small business owner who has USD 10m in net worth isn't going to be subscribing to say even a mid-cap fund like Gryphon Partners funds directly.
Minimum investment threshold at many direct funds, including mine, is either USD 10m or USD 25m committed if you don't work for the fund. FOF is nice, cause you can put 2m as this small business owner into a FOF and have diversified exposure to 5-10 managers but the fee load charged may be too high.
There are some side vehicles for employees etc, but these people investing still tend to be accredited investors. Accredited investor is a pretty low hurdle - the hurdle that most funds run at is Qualified Purchaser which requires 5m+ in investments (ie; house does not count).
Not sure if you have been watching Youtube videos on this - there is a producer of videos about launching your own PE fund who generally pumps out pretty bad information.
Source: I used to be a funds lawyer.
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