By Claire Makin
Mark Jurish, chief executive of Larch Lane Advisors, has a message for institutional investors looking to participate in the growth of the hedge fund industry. It is that seeding is a great option. To him, the reason is clear: seed investing may offer returns that are better than industry averages because investors hope to benefit from asset growth as well as performance. "It is common knowledge that fees are high. As a seed investor, you have the potential to earn a part of the fee back," he says.
Not that Jurish thinks seeding early-stage hedge funds provides easy pickings. "What we've learned over many years and several different funds is that this is a difficult business," he says. Since 2001, the Rye Brook, New York-based firm has helped seed some 25 hedge funds with about $700 million of capital. Along the way, Jurish and his...