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B. G., Opalesque Geneva for New Managers:

The emergence of the COVID-19 pandemic and related global, national and local responses played an outsized role in the number and nature of seed investments throughout 2020, says Seward & Kissel, a large U.S. law firm that has just released its 2020 Seed Transactions Deal Points Study. There were was a smaller number of seed investments that year and seed investors sought to include additional protections to manage the risk of unknown market conditions.

Investments in traditional long/short and macro strategies remained a significant portion of overall observed seeding activity. Credit-focused strategies also remained popular with seeders. In addition, hybrid structures - whose investment portfolios can often include significant exposure to illiquid positions (i.e. an exposure level well in excess of traditional side pocketing) - attracted a number of seed investments.

Of the deals where working capital support is provided - which is now a majority of seed deals - a clear preference is emerging for using deferrals or other adjustments to the revenue share as a way of increasing the amount of capital available to fund the manager's operations, the report says.

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