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F-o-F Firm Makes Headway on Fund VII

Portfolio Advisors, one of the nation’s largest fund-of-fund managers, revealed in an SEC disclosure that it has already raised at least $200 million for its newest fund, Portfolio Advisors Private Equity Fund VII LP. In referring to the company’s previous two funds, which closed in 2011 and 2008, Paul Crotty, a managing director, said that his firm was “gratified to have succeeded in a very difficult fund-raising environment.”

The Darien, Conn.-based asset manager, which oversees $60 billion in assets, revealed just last week that it had made its final close on Fund VI after having raised $1.1 billion. Fund V, which closed in 2008, had raised a similar amount. While Crotty said he was prohibited from discussing funds that were currently seeking money, he did say that for Funds V and VI, the firm felt that $1 billion was an ideal size “because it translates to appropriate and available commitment sizes with the best available fund managers.”

Portfolio Advisors, which was founded in 1994, said in a press release that investors in Fund VI included “university endowments, private foundations, insurance companies, family offices and high net worth individuals.” It said that 80 percent of investors in Fund VI had already invested in a Portfolio Advisors fund. “Each of our funds in the past has a core of repeat investors as well as select new investors,” said Crotty.

By their nature, private equity funds-of-funds are less risky than straight private equity funds because of their inherent diversification. They often also provide access to funds that are in very high demand. The drawback for investors is another layer of fees.