Getting Ahead of the Game
Too early to call out the winners
Long-term investment strategy
Tenaciously applying a long-term investment horizon over the multi-year life of the funds optimizes portfolio return on capital, as investments progress from early-stage to enhanced valuation.
Scalability of investments
Investors may scale up or scale down their fund participation through a fund of funds strategy. Scaling up means investing in a higher number of funds and those funds requiring large minimum investments by pooling funds invested with other participating investors. Scaling down means an investor with more capital can spread their direct funds investment over a greater variety of direct funds within the fund of funds, investing less in each individual fund.
Due diligence, fund selection and monitoring
Fund selection is accomplished through a rigorous due diligence process that includes an evaluation of IT risks unique to Web3 and Artificial Intelligence assets. A fund of funds strategy leverages the wide range of expertise of multiple investment managers specializing in particular asset classes, industries, sectors, and geographic locations.
After we complete due diligence and commit investment capital to selected funds, we actively monitor these funds within our fund of funds allocation to ensure that our fund performance goals are on track for ultimate achievement.
Diversification through a fund of funds strategy with hundreds of underlying investments reduces overall portfolio risks. Diversification is accomplished using a single parent fund spanning many verticals.
Diversification using fund of funds can encompass asset class, industry, creator, geographic location, management expertise, and investment stage variations. This type of diversification reduces underperformance risks from undefended concentration, correlation, reliance on the decision-making style of any one manager, negative selection bias, and investment selection.
A fund of funds approach can lower total investment costs below the subscription amounts required when making multiple individual fund investments at their minimum participation thresholds.
In an early-stage industry, the winners have yet to be definitively determined. For Web3 and Artificial Intelligence, it is too early to call out the true winners that will become market dominators, monopolists, and unicorns. Therefore, to invest in this space now, the preferred investment approach for institutional investors and other professional investors is diversification that is as broad as possible.
Eharo Ltd (FRN 971072) is an appointed representative of Brooklands Fund Management Limited (FRN 757575) which is authorised and regulated by the Financial Conduct Authority.