In investing, diversification is often simplified to the rule of “don’t put all your eggs in one basket.” In practice, however, a modern portfolio is built on a far more complex architecture. It is not merely about allocating capital across multiple holdings, but about combining different investment strategies, geographic markets, currency exposures, and stages of the corporate lifecycle.
This multi-layered principle is becoming increasingly important, particularly for funds that combine private equity with technology investments. One example of such an approach is Rockaway Fund, a qualified investor fund built exclusively on investments into funds within the Rockaway group. Its strategy is based precisely on systematic diversification across several layers simultaneously.
Private equity as the stabilizing layer of the portfolio
Approximately 70% of the Rockaway Fund portfolio consists of private equity investments. However, this is not passive exposure to a single segment of the economy – the internal structure of these investments plays a key role.
The fund invests in established companies with proven cash flow and a clear strategy for further scaling – typically businesses built on the digitalization of traditional industries or on infrastructure-critical technologies.
Alongside companies such as Euromedia Group, Productboard, and Rohlik Group, the portfolio also includes investments in defense technologies (for example, the Czech company URC Systems, focused on critical infrastructure protection, or JISR Institute).
It is precisely the combination of these sectors that creates a compelling stabilizing effect. The digitalization of traditional industries has long been one of the main drivers of productivity in the European economy and represents one of the most consistent investment trends of the past decade. In contrast, technologies focused on protecting critical infrastructure fall into the category of so-called structural investments. Demand in this area is largely driven by government regulation, the security situation in Europe, and the long-term growth of public spending on defense and cybersecurity. As a result, these segments have historically shown significantly lower sensitivity to economic slowdowns than most conventional technology investments.
The target gross return for this part of the portfolio ranges between 15% and 25% annually, primarily represented by the investment strategy of the Alpha Fund, which forms the core private equity component of the portfolio alongside defense technology investments.
Growth capital: access to global technological growth beyond Central Europe
The remaining 30% of the portfolio is allocated to growth capital, primarily through venture capital and blockchain investments.
This portion of the portfolio serves a different role than private equity. It enhances growth potential while also expanding geographic exposure. Investments through funds such as Rockaway Ventures, Rockaway Q, and United Founders target early-stage technology projects both in Central and Eastern Europe and globally.
In addition to sector diversification, this approach also introduces diversification across different stages of company development – from established businesses to early-stage ventures. This combination enables the portfolio to respond to structural changes in the technology market and capture emerging trends earlier than traditional private equity strategies.
Diversification today means combining strategies, not just assets
One of the most significant shifts in recent years is the move from diversification across individual investments to diversification across investment approaches.
Portfolios that combine private equity, venture capital, and sector-focused technology investments are now better equipped to balance stability and growth than strategies built on a single market segment.
Multi-layered diversification: across strategies, regions, and stages of the corporate lifecycle is thus becoming one of the key principles of modern capital management. It is also one of the reasons why such hybrid structures are appearing more frequently in investor portfolios. This principle of multi-level diversification is one of the fundamental pillars on which the Rockaway Fund portfolio is built.