Risk Management Lessons from a Listed Private Equity Fund‐of‐Funds

This chapter discusses the risk management lessons learned from a listed private equity fund-of-funds. The private equity fund-of-funds concept began to take off in Switzerland in 1996 to 1997. Switzerland has a comparatively large institutional investment market, and the country, for a number of years now, has represented a deep pool of potential capital for private equity. Its private equity fund-of-funds industry has an international mix of professionals with diverse backgrounds in direct private equity, industry, consulting and investment management that enables fundraising on a global scale through the understanding of local investment cultures. This chapter presents an overview of the Swiss private equity funds-of-funds industry. It examines in detail the Private Equity Holding AG (PEH), a Swiss private equity fund-of-funds founded in March 1997 and at that time managed by the Vontobel Group. Domiciled in Zug, PEH together with its subsidiaries comprises the Private Equity Group. The chapter also analyzes publicly quoted private equity funds-of-funds market and explains the relevant period of PEH's history.