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Matthias Knab reports "live" from the GAIM Asia conference in Hong Kong: Blaine Tomlinson, Chairman of London based hedge FoF FRM, indicated his firm, founded in 1991 and managing $14.5bln assets, would be becoming more active internationally; the group is operating five offices at the moment, and he mentioned two more offices would be set up. FRM has six months ago set up a seeding fund to take stake in managers and capture capacity.

Nature of the seeding business has changed and investors are more demanding. A new manager should be aware that investors expect "absolute clarity" in the investment process. He should be able to "connect the dots", particularly explain the triad of investment process, market action and investment performance. Investors need to understand precisely the manager's strategy.

It should be an imperative for a manager to set up a business plan, "success involves a lot of planning". As a seeder, FRM typically allocates $75 to $100m. For a large FoF, seeding can be a natural extension of their role. FRM would be seeing about 1000 managers face to face in a year, and often counsel and advise the fund about the next steps to growing their business.

According to Tomlinson, most managers are optimistic when setting up a fund, and very few actually study the competition, a thing which in many other sectors would be compulsory and a natural part of the business plan and company set up. Each new hedge fund manager should be aware that he ......................

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