Hedge Fund Seeding

Investment approach

Hedge Fund Seeding Portfolios provide capital to start-up and early stage hedge funds. There is potential for enhanced returns through the receipt of profit interests and profit allocations from seeded funds. Additional returns may be generated by monetization of those profit streams. Investors may also benefit from capacity rights that allow them to make direct investments in seeded or subsequent funds.

Key Characteristics

  • Multiple revenue streams may generate higher returns than a typical hedge fund or fund of funds investment
  • Better liquidity than traditional private equity, with 3-4 year lock up of capital per seeded fund
  • Profits interest in active seeded funds continue in perpetuity, subject to a buyout
  • Ongoing profits interest accrue with virtually no capital at risk
  • Profits interest may be monetized via an IPO or private sale