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Article: Why do private equity funds-of-funds grow?
- Article from:
- Journal of Academy of Business and Economics
- Article date:
- March 1, 2008
- Author:
CopyrightCOPYRIGHT 2008 International Academy of Business and Economics. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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ABSTRACT
Private equity funds-of-funds ate investment vehicles that combine investor commitments for allocation to a portfolio of private equity funds. Over the last fifteen years, there has been an explosion in the private equity funds-of-funds market. In this paper, we argue that the growth of these funds is the result of increasing demand for private equity investments, changes in the regulations governing limited partnerships, and the need for diversification in private equity investments. The presence of this new pool of investment money in private equity suggests that more investments will get funded locally as well as globally and therefore, venture ...