Hedge Fund Seed Capital
Hedge Fund Capital Guide Part 1
Hedge Fund Seed capital is the money a hedge fund tries to raise to launch or within it's first year of operating to try to "get it off the ground" and hopefully raise enough assets to appear respectable to initial investors and provide initial momentum towards breaking even as a business. Hedge fund seed capital is in high demand, there are literally hundreds of investment groups looking for it right now and only three or four handfuls will receive any significant amount of it. Some hedge funds are seeded with as little as $500,00 while others receive up to $350M. From my experience I would guess that 70% of first year hedge fund seed capital levels range from $3M to $25M.
Hedge Fund Seed Capital Sources
- Hedge Fund Seed Capital Source #1: High Net Worth individuals (accredited investors) who are familiar with your trading skills, past portfolio management experience, or clearly understand your competitive advantage in the marketplace.
- Hedge Fund Seed Capital Source #2: Family & Friends who are accredited investors.
- Hedge Fund Seed Capital Source #3: Private Equity Firms. Many private equity funds have jumped into the space of seeding hedge funds and many will in turn work on raising assets for your fund once it will benefit both your fund and themselves.
- Hedge Fund Seed Capital Source #3: Hedge Funds. Some hedge funds have huge amounts of free cash flow and are looking for ways to re-invest it within strategies they understand and do not directly compete with products that they plan to create on their own.
- Hedge Fund Seed Capital Source #4: Associated banks or investment networks will often seed new hedge fund products they are launching with significant levels of capital.
Hedge Fund Seed Capital-Related Trends
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