Komfie Manalo, Opalesque Asia: Data provider Peltz International said that asset flows into hedge
funds continue to go to larger managers and fund managers with less than
$100 million in assets account for less than 4% of the total industry
assets.
The trend is likely to continue this year, however, Peltz said there is
sufficient money out there to get talented managers to get started as
the hedge fund assets continue to grow.
In a white paper, Peltz said that seeding has evolved over the past four
years. It is no longer pure seeding, but has also taken a more
consultative approach with customized portfolios. From 2000 until 2004,
managers didn't want people to know if they had been seeded. Now, it is
considered a plus.
"More managers today are looking for a strategic partner when they
launch as costs are higher than ever and it takes longer to raise
capital. Having a strategic partner allows the manager to spend time to
build infrastructure, hire analysts and focus on his portfolio. It gives
him time to put together a proper team and allows time for the strategy
to play out," the report added.
It continued that in the past, most seeded managers had been from banks.
Now, they are spin outs from hedge funds or managers at multi-manager
platforms with entrepreneurial ambitions. Seeders observe more movement
occurring along the early-stage investing spectrum. For example, an
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