https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AFund_of_funds 2026-04-30T07:41:26Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Fund_of_funds&diff=9087&oldid=prev 2026-03-11T04:57:54Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>💼 &#039;&#039;&#039;Fund of funds&#039;&#039;&#039; is an investment vehicle that allocates capital across multiple underlying funds rather than investing directly in individual securities — and within the insurance industry, it serves as a common structure for [[Definition:Insurance company | insurers]] and [[Definition:Reinsurance | reinsurers]] seeking diversified exposure to alternative asset classes such as [[Definition:Private equity | private equity]], hedge funds, [[Definition:Insurance-linked securities (ILS) | insurance-linked securities (ILS)]], and real assets. By pooling access to a curated portfolio of specialized managers, a fund of funds gives an insurance company broad diversification without requiring the in-house expertise to source and monitor dozens of individual fund commitments.<br /> <br /> 🔄 An insurer typically invests in a fund of funds through its general account or a dedicated [[Definition:Investment portfolio | investment portfolio]] managed under guidelines set by the company&#039;s [[Definition:Chief investment officer (CIO) | investment team]] and constrained by [[Definition:Risk-based capital (RBC) | risk-based capital]] rules. The fund-of-funds manager performs due diligence, selects underlying managers, negotiates terms, and provides consolidated reporting. For ILS-focused fund of funds, the underlying holdings may include [[Definition:Catastrophe bond | catastrophe bonds]], [[Definition:Collateralized reinsurance | collateralized reinsurance]] contracts, and [[Definition:Industry loss warranty (ILW) | industry loss warranties]], giving insurers and pension-affiliated investors a way to access reinsurance-like returns with portfolio diversification benefits.<br /> <br /> 📊 The trade-off insurers weigh is the additional layer of fees — management fees at both the fund-of-funds level and the underlying fund level — against the access and diversification benefits. For smaller carriers or mutual insurers that lack a large alternatives team, the structure can be the most practical route to asset classes that regulators and rating agencies increasingly expect to see in a well-constructed investment portfolio. As [[Definition:Insurtech | insurtech]] data platforms improve transparency around alternative-asset performance, some carriers are beginning to complement fund-of-funds allocations with select direct commitments, but the aggregated model remains a staple of institutional insurance investing.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Insurance-linked securities (ILS)]]<br /> * [[Definition:Private equity]]<br /> * [[Definition:Investment portfolio]]<br /> * [[Definition:Catastrophe bond]]<br /> * [[Definition:Risk-based capital (RBC)]]<br /> * [[Definition:Alternative investments]]<br /> {{Div col end}}</div>

PlumBot