Paige Finn DohertyFounding Partner, Behind Genius · Founding Partner at Behind Genius Ventures

What are pushbacks Invariantes Fund Co-Founder Fernando Pontaza faced with his investing strategy?

19 Mar 2023 · 1 min

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Fernando Pontaza, co-founder of Invariantes Fund, explains why investors push back on the fund's 50/50 split between fund-of-funds and direct investments. When both generate a 3× return, the double layer of carry from underlying funds plus Invariantes cuts the LP's blended return roughly in half compared to a direct-only peer fund.

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I'd be curious to hear more about maybe some of the pushbacks that you got deploying both as a fund of funds on half your portfolio and then also half direct.
We did get some pushback, mainly on the fee side of things, since it's a double-stacked fee structure on the 50% that we invest in other funds. But we put a lot of thought into it. But let's say hypothetically that you're returning 3x on Your funds are returning 3x to you and your directs are returning 3x to you. And then if you take out the carry from the funds and then the carry from our own carry post the carry of the funds, the impact on the blended side of things, all things being equal, is about 6x of your multiple. Mm-hmm. Meaning you would get that much less in a peer, in the half that it's deployed only into funds.