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From Kirsten Bischoff, Opalesque New York:
Almost all of the asset-raising advice we have seen in this environment doles out the same message: competition is fierce and many managers have compelling stories, therefore the biggest challenge is “not giving investors a reason to say no”.
However, the process may be less of a verbal minefield for managers than the above phrasing may indicate.
“I think we’re more sophisticated than that,” says Christopher Kelley, of the vetting process his private equity-structured hedge fund seeder The Harvest Fund, uses to find potential managers. Kelley, Principal at Boston-based Moody Aldrich says the most important is a team’s past track record and future potential. “If you’re going to be seeded, you’re going to have traded well, you’re going to have a track record and be well known within your strategy. You’re also going to have an outlook on your strategy, and a vision for how to build your firm.”
For the hedge fund industry the good news has been that after massive outflows, asset levels have finally stabilized. However, any inflows (and the number of net inflows remains low) are by and large going to the largest hedge funds, those with established names and institutional infrastructures. That means, for young funds, for those who have only been in existence for a year or two, allocations have been scarce.
Right now, seed funds represent the best...................... To view our full article Click here
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