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From Kirsten Bischoff, Opalesque New York:

According to HFR hedge funds saw net inflows during 3Q09 when investors added $1.1bn to industry assets. But, even as assets begin to flow again fundraising for managers is still a struggle. While launches during the summer of 2009 picked up speed, target assets for launch remain significantly lower than they were in years past. This presents a dilemma for many of the traders and managers who have left banks with the hopes of starting funds. But there are investors who believe that now is the time to get in with funds on the ground floor and seed or incubate emerging managers.

“We are very focused right now on the single manager seeding business,” said Ken Shewer, chairman of The Kenmar Group at the most recent Opalesque Roundtable (Connecticut).

The advantage for seeding funds lays not only in having access to and capacity reservations with managers in early stages of growth, but typically seeders also share a stake in the firm and then help the managers grow the infrastructure and attract additional assets. “We currently see a huge gap in this very exciting area where we are spending a great deal of our time in order to capitalize on the opportunities available to us.”

Non-traditional seeder One of the complaints about seeders by emerging funds seeking “seed” capital during ......................

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