Getting startup capital from institutions looks better these days, especially if the economic arrangement is favorable
By Barry Cohen
The addition of two new single-manager hedge funds to the platform of $13 billion alternative investment firm Investcorp provides more evidence that emerging managers are considering more closely the once-scorned notion of finding an institutional seeding partner.
Until recently, hedge funds that had been seeded by institutions were often viewed as lacking in entrepreneurship. Investors were also concerned that the seeding firm might have an advantage, by having superior access to capacity and information. That attitude is changing. "People now realize that the backing of a good seeding organization, which could have many options to provide capital to other managers, can be regarded as a feather in the cap for the startup manager," says Dan Lancellotti, managing director of capital introductions at Citi.
Investcorp, with main offices in New York, London...