Whats the difference between fund of funds and endowments

Rank: Monkey | 43

So whats the difference between the two? I heard Fof has a bigger focus on fund rasing, but from investment perspective, should be very similar. What a difference would it make for a junior analyst then?
Thanks so much ;>

Comments (3)

Nov 30,2011

It will depend on the fund of fund and the endowment; some fund of funds and some endowments do direct and co-investment whereas others solely allocate to outside managers. Some endowments, especially smaller endowments, may allocate to other intermediaries like funds of funds, rather than picking managers themselves.

One other difference is that an endowment should be diversified across asset classes and may have non-alternative investments as well as PE/HF etc. I've never seen a fund of funds that allocates to more than one asset class (within reason-you might have a VC FOF that does various stages of VC and growth equity, for example), though I've seen managers who have both a PE FOF, a RE FOF, and a HFOF for example.

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Nov 30,2011

Thanks Kenny, thats great insight...Im not sure if you are in the industry...but im currently work for a large endowment and looking to switch to fof.... the only reason is about LOCATION. The endowment I work for is in a college town, and I really cant stand it anymore.

Any advice will be greatly appreciated!

Nov 30,2011