Creating a Fund of Funds Allocation
While the Sector Profile and Allocations sections of the Construction Wizard are primarily meant for Direct Investments, they can be easily customized into a Fund of Funds investment profile.
Tactyc provides a pre-built Fund of Funds Sector Profile that can be quickly customized to create a Fund of Funds Allocation.
Setting up the Fund of Funds Sector Profile
Under Sector Profiles, create a new profile using the Add Another Profile option
Select the Fund of Funds Investment from Tactyc Datasets
The Fund of Funds profile creates a standard $100m fund, with a 2% GP commit and a 3x return. You can change the Round Size, Valuation and Exit Valuation parameters to customize this profile for a different return. For e.g. to create a 4x return profile, you would increase the exit valuation to $400mm (4 x $100mm valuation)
Setting up the Fund of Funds Allocation
Under Allocations create a new allocation (for e.g. a "Fund of Funds" allocation)
Under Linked Sector Profile connect this new allocation to the Fund of Funds sector profile defined above
Under Initial Check Size enter the expected investment in each fund
Tactyc should then automatically calculate the number of fund investments based on the amount of capital allocated to this allocation.
Adding an Actual Investment with the Fund of Funds profile
Once a Fund of Funds sector profile has been defined, you can then add a new investment using this profile, just like you would for a Direct Investment
This investment will be created with a round called Capital Call and you can specify the amount invested as part of the capital call
When defining the capital call round:
Investment Amount: Amount invested by your fund into the portfolio fund
Round Size: Amount called from all LPs in this capital call round
Pre-Money Valuation: Cumulative amount raised from all partners prior to this round. Please set this to $0.01 for the first round, or the value of the GP commit if you know that.
Future Capital Calls then also be added by added a new Capital Call round
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