This document was originally composed as part of the Carolina Venture Fellows program in 2004. It was also used by Parish Capital in some of our early marketing materials.
The universe of emerging manager private equity fund-of-funds is both small and relatively young. Swensenís Pioneering Portfolio Management, often considered the modern guidebook to practical institutional asset management, makes short comment on private equity as part of alternative assets as a class, has limited discussion of the role of a fund-of-funds, and the only discussion of emerging is in regards to developing economies.1 While the role of an emerging manager private equity fund-of-fund, its manager selection process, and observations about private equity style are all of significant interest and could fill several volumes with their nuances, this paper will focus on basic elements of this market. The author will look at existing definitions of emerging managers, discuss their potential for superior returns and conclude with rationales for institutional investors to pursue them as an asset class using a fund-of-funds.