Blended investment analysis
A. Blended return profile
| Component | Allocation | Target IRR | Contribution |
|---|---|---|---|
| Leaders Fund I | 48.2% | 20% | 9.64% |
| Fast Track Fund I | 12.0% | 23.16% | 2.78% |
| Opportunity Fund I | 24.2% | 22% | 5.32% |
| Infra One Equity | 9.0% | 20% | 1.80% |
| Allocator One Equity | 6.6% | 20% | 1.32% |
| BLENDED TOTAL | 100% | ~20.9% | 20.9% |
Conservative case (downside scenario):
- Leaders Fund I: 18% IRR
- Fast Track Fund I: 20% IRR
- Opportunity Fund I: 18% IRR
- Infra One Equity: 15% IRR
- Allocator One Equity: 15% IRR
- Blended: ~18.2% IRR
Aggressive case (upside scenario):
- Leaders Fund I: 24% IRR
- Fast Track Fund I: 27% IRR
- Opportunity Fund I: 26% IRR
- Infra One Equity: 25% IRR
- Allocator One Equity: 25% IRR
- Blended: ~25.0% IRR
B. Return composition
Capital gains vs. dividend yields:
- 84.4% of allocation → Capital gains vehicles (Leaders Fund I, Fast Track Fund I, Opportunity Fund I)
- 15.6% of allocation → Yield vehicles (Infra One Equity, Allocator One Equity)
Timing:
- Years 1–3: Minimal distributions (all capital deployment)
- Years 4–7: Early distributions (Fast Track Fund I, Opportunity Fund I exits)
- Years 8–12: Accelerating distributions (Leaders Fund I exits + Infra One Equity dividends + Allocator One Equity dividends)
C. Fee analysis
Total fees paid vs. traditional FoF:
| Structure | Platform Fees | Underlying GP Fees | Total Cost |
|---|---|---|---|
| Allocator One (single layer) | 2% annually | 2% annually | 2.0% management + 20% carry |
| Traditional FoF (stacked) | 1.0% annually | 2.0% annually | 3.0% management + 30% carry |
| Fee advantage (NPV) | ~56% more net profit retained |
On €25M commitment over 10 years:
- Allocator One structure: Net return ~€37.35M (assuming 20% net IRR)
- Traditional FoF: Net return ~€23.75M (assuming 13% net IRR due to fee drag)
- Advantage: €13.6M more (57% additional return)
Institutional validation: Fee efficiency
"Swensen: Funds of funds are a 'cancer'. The head of Yale University's $17 billion endowment believes that funds of funds and consultants are bad for the investment community." — David Swensen, Private Equity International Source: https://www.privateequityinternational.com/swensen-funds-of-funds-are-a-cancer/
"If returns are going to be 7 or 8 percent and you're paying 1 percent for fees, that makes an enormous difference in how much money you're going to have in retirement." — Warren Buffett
"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent." — Charlie Munger
"The two greatest enemies of the equity-fund investor are expenses and emotions." — John Bogle