Fund of Funds — The Institutional LP Guide for Fund Manag...

TL;DR

Fund of funds remain one of the most accessible institutional LP categories for Fund I–III managers in 2026—even as capital concentrates at mega-funds. Their mandates structurally favor emerging managers, their decision cycles run 3–6 months (faster than pensions or endowments), and their commitments signal credibility to other allocators. The 2025 fundraising trough has bottomed, secondaries are becoming a base layer in LP portfolios, and FoFs are increasingly using continuation vehicles and co-investments to manufacture liquidity. This guide covers FoF types, evaluation criteria, decision chains, access strategies, and pipeline building—written for GPs who need institutional capital without institutional timelines.

This guide is for Fund I–III GPs building institutional investor pipelines. Fund of funds represent one of the most accessible paths to institutional capital for emerging managers—yet most fundraising content treats them as an afterthought. This guide takes an allocator-workflow lens: how FoFs actually make decisions, who controls those decisions, and how to position for allocation.

Why Fund of Funds Matter for Emerging Managers

For managers raising their first, second, or third fund, the path to institutional capital often runs through fund of funds first.

This is not because FoFs are easier to access than pensions or endowments. It is because their mandates, decision structures, and return models are built differently—in ways that favor newer managers more than most LP categories.

A fund of funds pools capital from its own investors and deploys it across a portfolio of underlying funds rather than directly into companies. This creates a structural incentive to find differentiated managers early. FoFs cannot generate alpha by accessing the same oversubscribed flagship funds as everyone else. Their edge comes from identifying emerging talent before the market prices it in.

This dynamic makes FoFs disproportionately valuable as anchor investors. When a credible FoF commits to a Fund I or Fund II, it sends a signal to other allocators that institutional-grade diligence has been completed. Pensions, endowments, and family offices routinely ask who else is in the fund. A recognized FoF name on the cap table compresses the fundraising timeline for everyone who follows.

The 2026 context matters. According to Cambridge Associates, the institutional fundraising drought troughed in 2025 at roughly one-third of 2021 volumes. Capital has concentrated dramatically—the top 10 private equity groups captured approximately 46% of US PE fundraising in 2025, a share not seen since 2014. Yet this same environment has created opportunity for emerging managers with differentiated strategies. FoFs seeking alpha must look beyond oversubscribed flagships, and many are actively building emerging manager exposure as a result.

The decision mechanics also differ from other institutional LPs. Pensions and endowments often operate on annual or biannual allocation cycles, with investment committees that meet infrequently and consultant-driven screening processes. FoFs typically maintain dedicated teams evaluating managers continuously. Their LP decision cycles are shorter—often three to six months from first meeting to commitment, compared to twelve months or more for public pensions.

Family offices, by contrast, vary dramatically in sophistication and process. Some operate like institutional allocators; many do not. Pensions and endowments often have minimum track record requirements that exclude first-time fund managers entirely. FoFs occupy a middle position: institutional rigor with mandate flexibility.

Altss tracks over 400 fund of funds globally, including allocation behavior, decision-maker contacts, and mandate shifts. This guide draws on that dataset to map the FoF landscape from an allocator-targeting perspective.

What a Fund of Funds Is — and Is Not

A fund of funds is a pooled investment vehicle that allocates capital to other funds rather than directly to portfolio companies. FoF managers charge their own layer of fees—typically 0.5–1.0% management fee and 5–10% carried interest—on top of the fees charged by underlying GPs.

This fee layering is the defining constraint of the FoF model. It means FoFs must generate enough gross return to justify two fee loads while still delivering competitive net performance to their own LPs. That math only works if FoFs either access top-quartile managers or identify emerging managers before they become consensus picks.

FoFs exist because certain LP categories—corporate pensions, insurance general accounts, smaller endowments, high-net-worth platforms—lack the internal resources to diligence and monitor a diversified portfolio of private market funds directly. Outsourcing that function to a FoF trades some return (the fee drag) for access, diversification, and operational simplicity.

FoFs are not consultants. Investment consultants like Cambridge Associates, Wilshire, NEPC, Meketa, or Verus advise LPs on allocation strategy and manager selection but do not pool or deploy capital themselves. Some consultants have affiliated FoF vehicles, creating hybrid models, but the core function differs. A consultant recommends; a FoF commits.

FoFs are not placement agents. Placement agents represent GPs in fundraising and are compensated through success fees. FoFs sit on the opposite side of the table—they are LPs making allocation decisions, not intermediaries facilitating them.

Understanding this distinction matters for positioning. When approaching a FoF, you are speaking to an allocator evaluating whether your fund fits their portfolio construction, not an advisor helping you raise capital.

The Fund of Funds Landscape That Actually Matters

The FoF universe is often segmented by asset class (PE vs. VC vs. hedge fund) or geography. For GPs building target lists, a more useful segmentation is by the type of manager each FoF is structured to back.

Institutional-Scale FoFs

The largest FoFs—Hamilton Lane, HarbourVest, Pantheon, Partners Group, StepStone, Adams Street—manage tens of billions across PE, VC, infrastructure, and credit mandates. These platforms allocate across the full spectrum of manager maturity, from established flagships to select emerging managers.

For Fund I–III GPs, institutional-scale FoFs are not inaccessible, but competition for their attention is intense. These platforms evaluate hundreds of managers annually and commit to a fraction. Emerging manager allocations typically flow through dedicated programs or carve-outs, often with specific parameters around fund size, strategy, or geography.

Adams Street, for example, has backed almost 150 emerging manager funds globally over the past five years, defining emerging managers as those raising their initial three funds of $1 billion or less. HarbourVest's emerging manager program focuses on funds with target sizes ranging from $100 million to $400 million.

Approaching these FoFs requires understanding which team handles emerging managers, what their current mandate looks like, and whether your fund fits their portfolio gaps. A generalist pitch to the wrong team wastes cycles.

Emerging-Manager-Focused FoFs

A subset of FoFs explicitly targets Fund I, II, and III managers. These include dedicated emerging manager programs within larger platforms and standalone vehicles built around the thesis that younger managers generate alpha.

Examples include Invesco Private Capital's emerging manager program, GCM Grosvenor's Elevate strategy (launched 2023 specifically to seed and scale emerging PE founders), and various regional emerging manager FoFs. Some state pension systems also run internal emerging manager FoF mandates—New York City's Emerging Manager Program reached $13.02 billion in exposure in FY 2025, up from $10.36 billion in FY 2024.

For first-time fund managers, these FoFs represent the highest-probability targets. Their mandates are designed for you. The diligence will be thorough—they are underwriting execution risk, not past returns—but the conversation starts from a position of fit.

Hybrid, Advisory-Linked, and Multi-Strategy Platforms

Some FoFs blur the line between advisory and direct investment. Cambridge Associates operates both an advisory business and discretionary FoF vehicles. Wilshire maintains manager selection capabilities alongside consulting. Partners Group and StepStone combine FoF investing with direct co-investment and secondary strategies.

Multi-strategy platforms add complexity for GPs. The same institution may be evaluating your fund for their FoF vehicle, their co-investment program, and their secondary book simultaneously. Different teams, different mandates, different timelines. Mapping the allocator decision chain matters more here than anywhere else.

Regional and Sector-Specific FoFs

Beyond the global platforms, a layer of FoFs focuses on specific geographies or sectors. Asian FoFs (CITIC Capital, Axiom Asia) concentrate on regional managers. European FoFs (Access Capital, Alpinvest) maintain distinct mandates. Sector-focused FoFs exist in healthcare, climate, fintech, and other verticals.

These FoFs are often overlooked by US-based GPs, but they can be highly relevant for funds with geographic focus or thematic overlap. A climate-focused Fund II may find more traction with a sector-specialist FoF than with a generalist institutional platform.

The 2026 FoF Landscape: What's Changed

The private markets environment entering 2026 has reshaped FoF behavior in several important ways.

Secondaries as Core Strategy

Secondaries are no longer a niche liquidity solution—they are becoming a base layer in institutional portfolios. Cambridge Associates notes that continuation vehicles are estimated to represent at least 20% of distributions in 2026, as LPs overwhelmingly opt for the "sell" option rather than roll. Secondaries fundraising hit $70.9 billion in H1 2025 alone, approaching the $107.6 billion raised for all of 2024.

For emerging managers, this means FoFs are increasingly evaluating how your fund fits within their broader portfolio construction, including secondary and co-investment exposures. It also means competition for primary FoF capital is more intense, as some allocation shifts toward secondaries.

DPI Over IRR

Allocators have fundamentally shifted how they evaluate managers. DPI (distributions to paid-in capital) now matters more than IRR alone. Managers that successfully raised in the past 18 months have demonstrated both higher net IRR and higher DPI in prior vintages. Some firms with strong unrealized performance but lower DPI have failed to raise new funds altogether.

FoFs are leading this shift. Their own LPs are demanding liquidity after years of distribution drought, and FoFs are passing that pressure through to the managers they back. Emerging managers should be prepared to discuss not just projected returns but realistic distribution timelines.

Private Wealth as LP Base

Individual investor capital is increasingly replacing or augmenting institutional capital. The institutional fundraising drought has accelerated efforts to open private markets to individual investors through evergreen funds, interval funds, and defined contribution program inclusion. FoFs are responding by launching wealth-oriented products alongside their institutional vehicles.

For emerging managers, this creates both opportunity and complexity. Some FoFs now maintain multiple vehicles with different liquidity terms, fee structures, and mandate constraints. Understanding which vehicle you're targeting matters.

Emerging Manager Spin-Outs

The challenging environment for established managers has paradoxically created opportunity for new entrants. Some older managers with underwhelming performance are downsizing or winding down, and key investment professionals are opting to spin out or launch their own ventures. Many are going further down-market and targeting niche sub-sectors.

FoFs are actively tracking this dynamic. A clean spin-out from a recognized platform, with clear deal attribution and platform support, can be highly attractive to FoFs seeking differentiated exposure.

Active Fund of Funds Allocators in PE & VC (2026)

The following fund of funds have demonstrated activity relevant to Fund I–III private equity and venture managers. Selection emphasizes mandate relevance and allocation behavior rather than scale alone.

Hamilton Lane — Philadelphia PE, VC, Credit, Infra | All stages | Dedicated EM program Broad platform, separate EM team

HarbourVest — Boston PE, VC, Credit | Established + Select EM | Moderate Global reach, $100-400M EM target fund sizes

Pantheon — London / San Francisco PE, VC, Infra, Credit | All stages | Dedicated EM program Strong European presence

StepStone — Baltimore PE, VC, Infra, Credit | All stages | EM carve-out Acquired Greenspring VC platform

Adams Street — Chicago PE, VC | Established + Select EM | Moderate 150 EM funds backed in 5 years

Partners Group — Zug PE, Infra, Credit | Established | Low for EM Direct bias, less FoF-only

Neuberger Berman — New York PE, Credit | Established + Select EM | Moderate Insurance channel strength

GCM Grosvenor — Chicago PE, Infra, RE | EM focus | High Elevate seeding strategy launched 2023

Aberdeen (abrdn) — Edinburgh PE, VC, Infra | All stages | EM program active European and Asia exposure

LGT Capital Partners — Zurich PE, VC | Established + Select EM | Moderate Swiss family backing

Pathway Capital — Irvine PE | Established + EM | Dedicated EM Custom separate accounts

Invesco Private Capital — New York PE, VC | EM focus | High Explicit emerging manager mandate

Industry Ventures — San Francisco VC, Secondaries | EM + Established | High for VC VC specialist

Horsley Bridge — San Francisco VC | Established + Select EM | Moderate Long VC relationships

Commonfund Capital — Wilton PE, VC | EM + Established | Dedicated EM Endowment LP base

CITIC Capital — Hong Kong PE, VC, Credit | Asia focus | Moderate China and Asia regional

Axiom Asia — Singapore PE, VC | Asia focus | Moderate Southeast Asia specialist

Alpinvest — Amsterdam PE, Secondaries | Established + Select EM | Moderate Carlyle-linked

Access Capital — Paris PE | European focus | Moderate European mid-market

Altss tracks FoF decision ownership, mandate parameters, and allocation behavior with verified contacts across 400+ fund of funds globally. Full FoF profiles with decision-maker data will be available at /lp-type/fund-of-funds.

How Fund of Funds Evaluate Managers

FoF diligence is comprehensive. The depth often surprises first-time GPs who assume FoFs are less rigorous than pensions or endowments. The opposite is frequently true—FoFs stake their reputation on manager selection and conduct diligence accordingly.

Quantitative Screens

Track record remains the starting point. FoFs evaluate DPI, TVPI, and IRR against relevant benchmarks, with increasing weight on DPI for funds past the J-curve. Unrealized gains matter less than demonstrated ability to return capital—a shift that has accelerated since 2023.

For emerging managers with limited track record, FoFs look for attribution. What deals did the individual partners lead? What were the outcomes? Can performance be disaggregated from the prior platform? Spin-out managers with clear deal attribution have an easier path than first-time managers building track records from scratch.

Fund size fit matters. FoFs model portfolio construction constraints—they cannot allocate 30% of a Fund I to a single GP commitment. This creates practical minimums and maximums for check sizes relative to fund targets.

Qualitative Underwriting

Beyond the numbers, FoFs underwrite the team. Key questions include:

Decision ownership: Who sources, who decides, who exits? FoFs probe whether track record reflects the individuals at the table today or teammates who left.

Key person risk: How concentrated is the team? What happens if a partner departs? FoFs evaluate succession depth and governance.

Operational infrastructure: Back office, compliance, fund administration, legal—FoFs assess whether emerging managers can scale operations with AUM. Weakness here kills deals.

Strategy differentiation: What is the edge? Sourcing, thesis, sector expertise, geographic access? FoFs evaluate whether the alpha source is defensible and repeatable.

The Emerging Manager Exception

For Fund I managers without prior fund-level track record, FoFs substitute different proof points:

Deal attribution from prior roles: Documented involvement in sourcing, diligence, and exit decisions at previous firms.

Co-investment or personal track record: Angel investments, direct deals, advisory roles with equity outcomes.

Reference network: LPs, founders, co-investors who can validate judgment and behavior under pressure.

Spin-out credibility: For managers leaving established platforms, FoFs assess whether the spin-out was supported, contentious, or opportunistic. A clean spin-out with platform blessing carries weight.

FoFs underwriting first-time fund managers are essentially underwriting execution risk. They want evidence that the team can source, win, and manage deals—even without a fund vehicle proving it yet.

FoF Decision Chains and IC Timelines

Understanding how FoFs make decisions—and who controls each stage—determines how you allocate your own time.

The Screening Layer

Most FoFs maintain dedicated sourcing and screening functions. Associates and analysts conduct initial evaluations: strategy fit, fund economics, preliminary track record review. This layer filters hundreds of inbound inquiries down to a manageable pipeline.

Getting past screening requires mandate alignment. If your fund does not fit the FoF's current parameters—geography, strategy, fund size, manager experience—it stops here regardless of quality. Research before outreach prevents wasted cycles.

Principals and directors lead diligence on funds that clear screening. These individuals own the relationship, conduct deep-dive calls, reference checks, and on-site visits. They become internal advocates—or not—based on what they find.

Winning a sponsor matters more than any other step. The sponsor presents to the investment committee, defends the recommendation, and stakes reputation on the outcome. Your job is to make the sponsor's job easy: clear materials, responsive communication, organized data room.

The Decision Layer

Managing directors and partners control final allocation decisions, typically through formal investment committee processes. IC meetings occur on regular cadences—weekly, biweekly, or monthly depending on the FoF.

FoF IC timelines are generally faster than pensions or endowments. A three-to-six-month process from first substantive meeting to commitment is typical. Some FoFs move faster; few move slower unless diligence uncovers issues requiring resolution.

This compressed timeline reflects the FoF operating model. Unlike pensions with annual allocation cycles and quarterly IC meetings, FoFs maintain continuous evaluation and deployment mandates. Capital is always being put to work.

Getting in Front of Fund of Funds

Access strategies rank by conversion probability, not effort required.

Warm Paths

The highest-conversion introductions come from GPs already in the FoF's portfolio. A recommendation from a manager they backed—especially one performing well—carries significant weight. If you share co-investors, portfolio company connections, or professional networks with existing FoF relationships, start there.

Portfolio company founders can also facilitate introductions, particularly for VC-focused FoFs. A founder who built a successful company with the FoF's capital vouching for a new manager creates a credible entry point.

Direct Outreach

Direct outreach works when it demonstrates research. Generic emails fail. Mandate-specific emails—referencing the FoF's stated strategy, recent allocations, or publicly available investment criteria—get responses.

The goal of initial outreach is a screening call, not a commitment. Frame the ask appropriately: you are requesting 30 minutes to explore fit, not pitching for capital in the first email.

Verified contact data matters here. Reaching the right person—the principal covering your strategy, not a general inbox—compresses the timeline. Altss tracks decision-maker contacts and routing for FoF allocators specifically to address this bottleneck.

Events That FoFs Actually Attend

FoFs attend ILPA events, SuperReturn, and various regional allocator conferences. Key 2026 events include:

ILPA Summit Europe (April 27–29, London): Limited to 30 GP firms with pre-scheduled one-on-one LP meetings. One of the most efficient investor engagement platforms.

SuperReturn International (June 2–6, Berlin): The largest private equity conference globally—over 5,500 attendees including 1,800+ LPs. Massive networking opportunity for broad investor outreach.

ILPA Summit (November 3–5, New York): Limited to ~75 established managers and ~15 emerging managers. Highly curated LP-GP matching.

SuperReturn North America (March, Miami): 800+ decision-makers including 250+ LPs.

Event-based introductions work best as follow-ups to prior contact, not cold introductions. FoF teams at conferences are inundated. A brief meeting with context ("following up on our exchange last month") converts better than a badge scan.

For a comprehensive conference calendar, see: The 2025–2026 LP & Family Office Conference Calendar.

Consultants as Long-Term Relationships

Some FoFs maintain consultant relationships—particularly hybrid advisory-FoF platforms like Cambridge Associates. Key consultants include Cambridge, Wilshire, NEPC, Meketa, and Verus. Consultants can facilitate introductions but are not shortcuts. Building consultant relationships is a multi-year process that pays dividends across multiple fundraises, not a tactic for the current raise.

What FoFs Expect After They Commit

FoF commitments come with reporting and governance expectations calibrated to their own LP obligations.

Reporting Discipline

FoFs expect quarterly reports with standardized metrics. ILPA templates are increasingly standard, including:

ILPA Quarterly Reporting Template
ILPA Capital Call/Distribution Notice Template
ILPA Fee Reporting Template

Capital calls and distribution notices must be timely and documented. FoFs manage cash across dozens or hundreds of underlying funds; late or unclear notices create operational friction that damages relationships.

Transparency Norms

FoFs expect proactive communication on material events: key person departures, significant write-downs, strategy drift, or portfolio company issues. Surprises erode trust. A FoF learning about problems from sources other than the GP damages the relationship more than the problem itself.

Fee Sensitivity

FoFs operate with their own fee layer. They are structurally sensitive to GP fee loads because every basis point of GP fees compounds their own drag on net returns. Management fees hit record lows in 2025, averaging just 1.61% of assets—well below the legacy 2% standard—as managers offer discounts to secure commitments.

This creates negotiation dynamics around management fees, catch-up provisions, and fee breaks for larger commitments. Emerging managers should expect FoF LPs to push on economics more than some other LP types.

Common Fund of Funds Fundraising Mistakes

Certain errors appear repeatedly in FoF fundraising processes.

Mandate mismatch: Pitching a $50M seed fund to a FoF that writes $75M minimum checks. Pitching a buyout strategy to a VC-focused FoF. Research prevents wasted time on both sides.

Wrong entry point: Emailing the managing director before establishing any relationship with the team. FoFs have hierarchy; respecting it accelerates rather than slows the process.

Underprepared data rooms: FoF diligence goes deep. Incomplete, disorganized, or inconsistent materials signal operational weakness. The data room is part of the diligence—treat it accordingly.

Ignoring FoF LP constraints: FoFs answer to their own investors. Understanding what those LPs require—reporting standards, ESG policies, concentration limits—helps you understand what the FoF can and cannot do.

Over-promising on timeline: Telling a FoF you are closing in 60 days when you are not pressures the relationship. FoFs evaluate many managers; artificial urgency rarely accelerates their process and often backfires.

Ignoring the DPI shift: Presenting only IRR projections without addressing distribution timelines. FoFs are under pressure from their own LPs to return capital; show you understand this.

Fund of Funds vs Other LP Types

Decision timeline

Fund of Funds: 3–6 months
Pension: 9–18 months
Endowment: 6–12 months
Family Office: 1–6 months

Emerging manager appetite

Fund of Funds: High (mandate-dependent)
Pension: Low–Moderate
Endowment: Moderate
Family Office: Variable

Diligence depth

Fund of Funds: High
Pension: High
Endowment: Moderate–High
Family Office: Variable

Process vs relationship

Fund of Funds: Process-driven
Pension: Process-driven
Endowment: Relationship + Process
Family Office: Relationship-driven

Consultant influence

Fund of Funds: Low–Moderate
Pension: High
Endowment: Moderate–High
Family Office: Low

DPI sensitivity

Fund of Funds: High (2025+)
Pension: Moderate
Endowment: Moderate
Family Office: Variable

For Fund I–III managers, FoFs offer a compelling combination: institutional process without multi-year timelines, diligence rigor without consultant gatekeeping, and structural appetite for emerging managers. They are often the most efficient path to first institutional capital.

For more on LP types and how they compare, see: How to Raise from Family Offices in 2025 and Best LP and Investor Databases for Emerging Managers 2026.

Choosing a Fund of Funds Database

Identifying FoF targets requires data infrastructure. The decision is not whether to use a database, but which database matches your workflow and accuracy requirements.

Contact accuracy: Can you reach decision-makers directly, or does the data route to general inboxes and outdated contacts? FoF teams are small; reaching the wrong person delays the process by weeks.

Decision routing: Does the database map who screens, who sponsors, who decides? Understanding the allocator decision chain is critical for FoFs with multiple teams and strategies.

Mandate clarity: Is the FoF's current allocation focus documented? Mandates shift. A database showing last year's parameters creates targeting errors.

Freshness: How recently was the data verified? FoF personnel change, strategies evolve, allocation paces fluctuate. Stale data compounds over time.

Allocator signals: Does the database track fundraising signals—recent commitments, conference attendance, mandate changes? Signals indicate timing and receptivity.

Workflow integration: Does the data export cleanly into your CRM and outreach systems? Data that requires manual re-entry creates friction.

Preqin remains the institutional reference standard—broad LP coverage, recognized brand, extensive historical data. For large platforms with analyst teams and existing subscriptions, Preqin provides comprehensive baseline intelligence. Limitations include contact freshness (email bounce rates are commonly cited by users), limited decision-chain mapping, and pricing that excludes many emerging managers.

Altss approaches FoF data differently. Built on OSINT methodology, Altss prioritizes decision-maker verification, mandate accuracy, and allocator behavior signals. The focus is GP-to-LP workflow: who to contact, when to contact them, and what mandate they are currently executing. For emerging managers targeting FoFs specifically, Altss provides allocator-behavior intelligence that legacy platforms were not designed to surface.

For detailed comparison, see: Best LP & Investor Databases for Emerging Managers 2026 and Altss vs PitchBook vs Preqin vs Dakota: Which LP Database Wins in 2025.

Building a Fund of Funds Pipeline

FoF relationships compound across fund cycles. The manager who cultivates relationships during Fund I closes faster in Fund II and becomes a preferred allocation in Fund III. Pipeline building is a long-term practice, not a fundraise-specific tactic.

Start Early

Begin FoF outreach 18–24 months before your target fundraise launch. The goal during this period is not to secure commitments but to build familiarity: introductory meetings, periodic updates, informal check-ins. When fundraising begins, you are reconnecting with known contacts, not introducing yourself cold.

Prioritize Ruthlessly

Segment your FoF universe into tiers:

A-tier: Mandate fit is strong, emerging manager appetite is documented. Prioritize time and relationship investment here.

B-tier: Potential fit, but one or more parameters are uncertain. Worth pursuing but not at the expense of A-tier.

C-tier: Long shots—large platforms where you have no warm path, FoFs with unclear mandates, or those with minimal emerging manager history. Maintain awareness but invest limited cycles.

Maintain CRM Discipline

Track every interaction: meeting notes, follow-up commitments, personnel changes, mandate updates. FoF relationships span years; memory fails. A well-maintained CRM ensures continuity across fundraises and team changes on both sides.

Re-engage Between Funds

The period between fundraises is when relationships deepen or atrophy. Managers who disappear after Fund I closes and reappear for Fund II asking for capital signal transactional intent. Managers who provide portfolio updates, share relevant market insights, and maintain contact demonstrate partnership orientation.

Altss supports this workflow by tracking FoF mandate shifts and allocation behavior between your fundraises—surfacing when a dormant relationship becomes active again.

For more on fundraising strategy, see: Guide to Fundraising in 2025: A Strategic Playbook for Emerging Fund Managers and How to Raise a Fund Without a Placement Agent.

FAQ

Do fund of funds invest in first-time managers?

Yes, particularly emerging-manager-focused FoFs. GCM Grosvenor's Elevate strategy, Invesco Private Capital, and dedicated programs within Hamilton Lane, Pantheon, and others explicitly target Fund I and Fund II managers. The diligence focuses on team attribution, spin-out credibility, and operational readiness rather than fund-level track record. Seeders like TPG, GCM, and Wafra are also playing an increasingly important role, providing catalytic capital and operational support to fledgling firms.

How long does FoF due diligence take?

Typically three to six months from first substantive meeting to commitment, faster than most pensions and endowments. Timeline depends on mandate fit, data room readiness, and IC calendar. FoFs with dedicated emerging manager programs often move faster because they have specialized teams and streamlined processes for evaluating newer managers.

Which fund of funds focus on emerging managers?

Key emerging-manager-focused FoFs include GCM Grosvenor (Elevate strategy), Invesco Private Capital, Commonfund Capital, and dedicated emerging manager programs within Hamilton Lane, Pantheon, Adams Street, and HarbourVest. State pension emerging manager programs—including California, Illinois, New York, and Texas—also deploy through FoF structures. Family offices, HNWIs, and regional FoFs remain strong supporters of startup managers.

What is the minimum fund size for FoF investment?

No universal minimum, but portfolio construction math creates practical floors. FoFs writing larger checks generally require fund sizes of $100M+ to maintain reasonable concentration. Smaller emerging-manager-focused vehicles may invest in funds as small as $50–75M. HarbourVest's emerging manager program, for example, focuses on funds with target sizes between $100 million and $400 million.

How do I find FoF decision-maker contacts?

Legacy databases provide coverage but often route to outdated contacts or general inboxes. Altss verifies decision-maker contacts and maps the internal routing—who screens, who sponsors, who decides—specifically for FoF allocators. For conferences, the ILPA Summit uses proprietary matching algorithms to schedule qualified GP-LP meetings based on investment preferences.

What's changed about FoF evaluation criteria in 2025–2026?

DPI has become significantly more important than IRR alone. FoFs are under pressure from their own LPs to return capital after years of distribution drought. Managers that can demonstrate value realization—not just paper gains—are looked upon favorably. Continuation vehicles and secondaries have become standard portfolio management tools, and FoFs increasingly expect GPs to have realistic distribution timelines.

Conclusion

Fund of funds represent one of the most efficient paths to institutional capital for emerging managers entering 2026. Despite broader fundraising headwinds and capital concentration at mega-funds, FoF mandates continue to favor newer managers, their decision cycles move faster than pensions and endowments, and their commitments signal credibility to other allocators.

The value extends beyond any single fundraise. FoF relationships built during Fund I compound into anchor positions for Fund II and core allocations for Fund III. The managers who invest in these relationships early—understanding how FoFs evaluate, how they decide, and how to stay relevant between fundraises—build durable institutional investor bases.

The market has shifted. DPI matters more than IRR. Secondaries and continuation vehicles have become standard tools. Individual investor capital is augmenting institutional sources. FoFs are adapting, and emerging managers who understand these dynamics will find opportunity where others see only headwinds.

Altss tracks fund of funds alongside the full LP universe, mapping decision chains, mandate parameters, and allocation behavior. For managers building FoF pipelines, verified contacts and allocator intelligence replace guesswork with precision.

Altss provides allocator intelligence infrastructure for fund managers. Access FoF profiles, decision-maker contacts, and mandate data at altss.com.

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