Investment Vehicle

A fund of funds provides an attractive mechanism for investors to establish a meaningful allocation to small market private equity. Many institutional investors and high net worth individuals have difficulty accessing this market segment efficiently. The extensive degree of due diligence necessary to invest successfully in small funds which are not widely known often precludes consideration by such investors. In addition, these funds, which sometimes have a regional focus, often wish to remain small and admit few new investors. Finally, a number of such funds are highly desirable and often oversubscribed. The principals of Method Advisors have long-standing relationships with, and access to, managers of a significant number of such funds.

Method Advisors’ fund-of-funds structure provides an elegant solution to the problem of gaining exposure to the smaller market for both smaller and larger investors. For smaller investors, the issue is often one of access, as private equity funds typically require a minimum investment that is in excess of the amount that some investors are able or willing to invest on their own. Conversely, larger institutional investors may typically commit an amount to individual private equity partnerships that would represent a substantial portion of an individual small market fund’s total capital, a situation which many investors may perceive to be untenable. An investment in a fund of funds allows for a level of diversification that is otherwise difficult to achieve for investors of all sizes.