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Opalesque New Managers: Covid-19 had an impact on the number and nature of seed investments throughout 2021, according to US law firm Seward & Kissel's latest study, Seed Transaction Deal Points, which observed an increase in the seeding of less-liquid investment products such as private equity GPs and venture capital firms, as well as continuing interest in hybrid and other relatively liquid funds that invest in private companies.
"While 2021 activity remained relatively steady (as opposed to the outsized peaks and valleys observed during the dislocations of 2020), overall seed activity was more consistent with 2020 levels (which were somewhat reduced vs. 2019), and, particularly in terms of the seeding of hedge funds and other liquid strategies, had not recovered to the pre-COVID pandemic trajectory observed in 2019 and early 2020."
While there were fewer investments in long/short equity strategies, they remained a significant portion of overall seeding activity.
Strategies that are more resistant to fee compression and strategies that were able to provide enhanced liquidity were in high demand, as in prior years.
As capital raising was challenging during the pandemic,...................... To view our full article Click here
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