The drawbacks related to the funds of funds of funds approach recommended to pensions by their investment consultants today are enormous and can be summarized as follows: a pension may end up having hundreds of millions of dollars or approximately 20% of its assets invested with over 150 largely unregulated high-risk money managers scattered throughout the world whose identities, securities holdings, trading costs and custodians are unknown.
FORBES: Pensions Perilously Binging Upon Hedge Funds, Funds of Funds and Funds of Funds of Funds (March 20, 2007)