responsAbility's Asset Classes

Fund of Funds

What are Fund of Funds?

A “Fund of Funds” (FoF) is an investment strategy wherein a fund invests in multiple other types of funds typically private equity-, private debt-, mezzanine finance- or other funds. This multi-layered investment approach enables investors to access a broad range of assets and strategies, including those that might be beyond reach for individual investors due to high minimum investment requirements or limited access. The diversification offered by a Fund of Fund is twofold. Firstly, it diversifies across asset classes, reducing the impact of volatility in any single market or sector. Secondly, it benefits from the diverse expertise of various fund managers, each specializing in different investment strategies and markets. By spreading investments among multiple funds, an FoF aims to reduce risks and enhance potential returns, while also benefiting from professional management at multiple levels.

Our Fund of Funds Approach

Our Fund of Funds approach is tailored to capture growth opportunities in emerging markets. It is characterized by a diversified investment strategy that spans various geographies, vintages, strategies, and stages, aiming to reduce volatility and risk while targeting market rate returns. Our experienced team focuses on selecting top-performing emerging fund managers, with an emphasis on consumer mid-market private equity and late-stage venture capital funds. Our investment portfolio includes primary fund investments, secondary fund investments, and co-investments.

Central to our approach is the integration of an ESG (Environmental, Social and Governance) and Impact (ESGI) strategy, which includes thorough ESG and Climate Assessments, Impact Assessment, and diligent Monitoring and Reporting. This strategy aligns with the EU Sustainable Finance Disclosure Regulation (SFDR), ensuring that our investments are not only financially sound but also socially responsible and environmentally sustainable.

Meet our Fund of Funds Leadership Team

Profile photo of team member Michael Fiebig

Michael Fiebig

Head of Private Equity & Fund of Funds. Member of the Executive Management

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Profile photo of team member Ralph Keitel

Ralph Keitel

Head of Fund of Funds Investments

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Profile photo of team member Severin Fries

Severin Fries

Head of Finance & Operations, Fund of Funds

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Profile photo of team member Anthony Njoroge

Anthony Njoroge

Principal and Co-Head of Africa and Latin America, Fund of Funds

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Profile photo of team member Thomas Walenta

Thomas Walenta

Principal and Co-Head of Asia-Pacific and Europe, Fund of Funds

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Profile photo of team member Felix Knidlberger

Felix Knidlberger

Principal and Co-head Africa and Latin America, Fund of Funds

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Profile photo of team member Kenneth Chin

Kenneth Chin

Principal and Co-Head of Asia-Pacific and Europe, Fund of Funds

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Fund of Funds and Impact

Fund of Funds (FoFs) are instrumental in amplifying the reach and effectiveness of impact investing. By leveraging their unique position, FoFs can address critical needs in various sectors, driving substantial social and environmental change:

  • Scalability of Impact: Through pooling resources, FoFs can provide substantial capital to impact funds, which in turn can scale their operations and increase their impact. This scalability is particularly important in sectors where large capital injections are needed for significant change.

  • Diversification Across Impact Themes: FoFs can invest in a variety of funds, each with a focus on different impact themes such as renewable energy, sustainable agriculture, healthcare, education, and financial inclusion. This diversification allows investors to contribute to multiple impact areas, spreading the positive effects across various sectors and geographies.

  • Access to Specialized Funds: Many impact investing opportunities are available through specialized funds that might be inaccessible to individual investors due to high minimum investment requirements or limited knowledge. These funds can for example be specialized in a sector, or in a geography such as lower income markets. FoFs can aggregate capital from multiple investors, enabling access to these specialized funds and thus broadening the impact investing landscape.

  • Risk Mitigation: Impact investing can involve unique risks, including market, regulatory, environmental, social and governance and execution risks, especially in emerging markets. By investing in funds these risks can be monitored and managed ‘on the ground’, where also value can be added. In this way FoFs can mitigate these risks, making impact investing more palatable for a broader range of investors.

  • Long-term Commitment: Impact investments often require a long-term commitment to realize substantial social or environmental outcomes. FoFs, with their diversified and balanced portfolios, can afford to stay invested for the long term, thus aligning with the time horizon needed for many impact projects to mature.

Our Fund of Funds Mandates

SIFEM Mandate

The Swiss Investment Fund for Emerging Markets is the development finance institution of the Swiss Confederation. SIFEM promotes long-term, sustainable and broad-based economic growth in developing and emerging countries by providing financial support to commercially viable small and medium-sized companies (SMEs) as well as fast-growing enterprises which in turn helps to create secure and permanent jobs and reduce poverty. responsAbility has taken over SIFEM portfolio management on March 1st 2023