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From Kirsten Bischoff, New York:
All of their lives hedge fund managers have faced daunting application processes. Acceptance rates at elite private schools (Exeter - 19%), college (Harvard, class of 2014 - 6.9%), top tier MBA programs (Wharton - 11%).
The acceptance rate for managers hoping to secure seed funding? 1%.
That's right. 1%. Near to impossible. Seed capital - currently the great hope of many small and emerging managers is almost completely out of reach for every single one. However, the will to raise assets, combined with the "seal of approval" a seed deal can bestow on a fund, continues to drive the flood of applications into seed firms.
The continued focus on securing even the most elusive assets brought 125 managers to the Bank of America Merrill Lynch Capital Introductions Seed Investors Conference held on Wednesday.
Managers know all too well, "without some strategic investor that will help them reach 'critical mass' it is very difficult to launch today," says Justin Fredericks, Director of Capital Introductions at the firm. With the infrastructure requirements of gun-shy investors, and the looming regulatory demands of SEC registration, critical mass for survival is somewhere in the range of $100m-$125m.
Opalesque's latest weekly series on emerging managers (See: Into the fire) who launc...................... To view our full article Click here
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