Big Investors go for Big Hedge Fund Names: But There’s Hope for Emerging Managers

April 20th, 2010
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An alternative investment survey of 600 institutional investors that was conducted by Deutsche Bank reported that the number of institutions that provide seed capital to new hedge funds dropped from 20% to 17% over the past year. According to an article from the Financial Times, the decrease could be attributed to the rolling impacts caused by the collapse of Lehman Brothers. Accordingly, big banks are more focused on their core businesses and are less willing to take a risk with new hedge fund start-ups. Chief Operating Officer of FRM Capital Advisors, Patric de Gentile-Williams, said that in the recent past many “investment banks were involved in seeding as an adjunct platform”; but 2010 showed that this is no longer the case.

What’s causing the pull-back? The Financial Times says it could have something to do with the Presidents’ proposal to “limit deposit-taking banks from proprietary trading,” which would bar banks from owning hedge funds. Also according to the Financial Times, institutional investors and banks are favoring big names with proven track records.

What should emerging hedge fund managers do? Senior manager at Thames River Capital, Ken Kinsey-Quick, advises new managers to invest their own money into their hedge fund, as this demonstrates their commitment and belief in their strategies. Mr. Kinsey-Quick is head of Thames River Capital’s Warrior Fund, which provides seed funding to emerging managers.
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For Detailed Investor Profiles on these Investors, click below:
FRM Capital Advisors
Thames River Capital
Related People: Barry Thomas; Bernt Tallaksen; Blaine Tomlinson; Caitlin Chan; Charlie Porter; Clive Peggram; John Aves; Martin Taylor*; Neil Mason; Nick Barnes*; Patric de Gentile-Williams; Tony Zucker
Related Entities: Financial Risk Management; Hillside Apex; Isometric Capital Management; JD Capital; Kingsway Fund; Nevsky Capital; Thames River Argentum Fund; WestSpring Advisors
Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News; Hedge Fund Launches and Hedge Fund Closings

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by Uday Pratap on October 15th, 2010

Patric de Gentile-Williams on Opalesque TV speaks about the enormous and exciting opportunities in the hedge fund seeding arena, how his firm identifies talent, the typical deal structure and advantages of working with an institutional seeding company. http://www.opalesque.tv/youtube/Patric_de_Gentile-Williams/1


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