There are two simple ways of constructing a private equity fund of funds portfolio: topdown,
which is driven by strategy, or bottom-up, which is driven by fund manager selection.
Pantheon’s investment approach tends to be bottom-up, with emphasis on rigorous
due diligence in fund manager selection. However, we include a top-down overlay in
designing our overall investment strategy, particularly with respect to risk aspects.
Pantheon has provided performance data for an independent study by HEC School of Management, Paris, and the London Business School on replicating the investment strategy of buyout funds with public market investments.
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