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FoFs have a range of strategies of course, but broadly speaking LPs that invest in FoFs pay them a management fee and carriedinterest (on top of the fee & carry of underlying VC funds they invest in) for access, diversification, active management or a combination of all three.
There are different flavors of family investment offices today, some are “single family” offices which invest on behalf of one uber wealthy family and their descendants whereas others are “multi-family” that might aggregate the wealth of a number of rather wealthy but not uber wealthy families. Insurance Companies.
There are different flavors of family investment offices today, some are “single family” offices which invest on behalf of one uber wealthy family and their descendants whereas others are “multi-family” that might aggregate the wealth of a number of rather wealthy but not uber wealthy families. Insurance Companies.
a VC fund’s entire portfolio in aggregate, net of management fees and carriedinterest) a good return from an LP’s perspective would be 2.5-3.0x So at a fund level (e.g. typically, which in most cases would to >20% IRR.
Firstly, “fund size” can be misleading as some firms prefer to raise a large aggregate amount split between several concurrent funds. A cynical observer might argue this is why some firms raise many concurrent small funds… then they have both large management fee streams and high volatility on each given carriedinterest pool.
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