Thu, Jul 30, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Investor interest in seeding hedge funds doubles to 21% in 2010

Tuesday, December 14, 2010
Opalesque Industry Update - Difficult fundraising conditions have fuelled demand for seed capital injections that investors are increasingly keen to meet.

The latest Preqin survey shows that the number of hedge fund investors expressing an interest in seed investments has almost doubled, from 11% in 2009 to 21% in 2010. Investors feel that the benefits of investing in these funds, such as fund ownership, fee negotiations and early access to the next generation of hedge funds, far outweigh the disadvantages in the current climate. Seed investments are also evolving post-crisis, as investors award seed capital to more established vehicles that may have encountered fundraising difficulties or lost assets through the crisis.

Other Survey Findings:

• Investors are setting higher barriers to entry for their fund managers, with the proportion of investors that would consider

investing with managers with a track record of two years or less falling from over 50% in 2009 to 38% in 2010.

• Investors are more willing to invest in smaller funds. In 2009, 25% would only consider investing in funds with at least $500 million in assets under management. In 2010, this figure has fallen to 19%.

• 72% of funds of hedge funds on the Preqin database will invest with an emerging manager and a further 13% would consider such an investment.

Amy Bensted, Manager - Hedge Fund Data commented:

“The industry contracted following the market crisis, and most funds lost assets. Investors have recognized this and are now willing to invest in smaller funds. Although investors are wary of investing in funds in their very early stages, fund managers that are able to build up a track record through investment of their own capital, or of a small fund, will be attractive to the institutional market. In 2011 we can expect investors to continue to look at smaller, and indeed emerging fund managers, and more capital to flow into the sector.”

(press release)

To view the report in full, please view this month’s Preqin Hedge Fund Spotlight: Source

Preqin is the leading source of information for the alternative assets industry, providing data and analysis via online databases, publications and bespoke data requests.


KB

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Bridgewater turns bearish on China[more]

    Komfie Manalo, Opalesque Asia: The world’s biggest hedge fund Bridgewater Associates and one of the most vocal of China’s potential is now turning its back against the world’s second largest economy as it joins a growing list of high-profile investors who are challenging China’s potentials.

  2. Opalesque Exclusive: Despite bumpy June/July, CTAs hold on[more]

    Bailey McCann, Opalesque New York: To say that things have been rocky in managed futures recently is putting it mildly. In June, the industry saw its worst month on a performance basis in the past four years. Then yesterday,

  3. Launches - Ex-Brevan Howard star Rokos builds team for new fund, Former Och-Ziff manager’s firm starts health care hedge fund, Industry veterans launch commodity investment firm Aron Capital Management, Nikko Asset Management launches two UCITS funds, Capital Group plans to debut Asian investor targeted fund[more]

    Ex-Brevan Howard star Rokos builds team for new fund From WSJ.com: Chris Rokos, a former star trader at Brevan Howard Asset Management LLP, has hired an economist from Nomura to join the team he’s assembling for his much anticipated hedge fund launch. Mr. Rokos, whose firm is due to b

  4. Institutions - Pension fund dismisses Texas consultant, Rhode Island pension fund gets 2.2% investment return, far below assumed rate of 7.5%, New Jersey pension investments see a drop-off in returns[more]

    Pension fund dismisses Texas consultant From Sandiegouniontribute.com: The county retirement board on Thursday terminated the Texas consultant who was given the reins of the $10 billion pension fund, and whose investment picks left many employees and retirees feeling taken for a ride.

  5. SWFs - Sovereign wealth funds paid around $14 billion in fees[more]

    From SWFinstitute.org: When it comes to the financial sector, asset management is one of the most profitable industries in the world. The Boston Consulting Group put out a 2014 figure saying there is US$ 74 trillion worth of professionally-managed assets. One of the fastest growing institutional inv

 

banner