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Alternative Market Briefing

It is going to be increasingly common that the biggest and the best hedge fund launches are backed by seed capital

Wednesday, June 05, 2019

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Gary Anderson
B. G., Opalesque Geneva for New Managers:

Gerhard (Gary) Anderson, a partner at US law firm Seward & Kissel, shares his thoughts and outlook for the hedge fund seeding landscape.

He was part of the team who drafted the Seed Transaction Deal Points study. The study shows that, in seed deals between 2014 and 2018, the alignment between seeders and managers has improved in various areas such as more working capital support, seed capital lock-up periods, and liquidity rights for seeders in case of harmful events.

Opalesque: The study shows that in observed seed deals between 2014 and 2018, the alignment between seeders and managers has improved. Do you think there is room for further improvements, and in which areas?

Gary Anderson: The best way to look at it is by framing the key drivers of alignment into two pockets. In one are changes in "degree" and in the other are changes in "kind".

Opalesque: What about changes in degree?

Gary Anderson: In respect of changes in degree, one can certainly imagine enhancement and alignment coming from seeders bearing a greater amount of working capital - so, instead of, for example, the ec......................

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