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September 05, 2002 at 08:00 PM
NEW YORK (HedgeWorld.com)–With an influx of new investors worried about capacity constraints in the hedge fund industry, capital-introduction events are increasingly attracting embryonic funds that are often winning allocations even before trading starts.
That’s according to Jane Halsey, the founder of the Roundtable Forum, which has been bringing together hedge fund managers with prospective investors at regular gatherings since 1999. “There was a time when investors would demand at least 12 data points on a track record before considering an allocation. But things have changed and investors are looking at managers pre-launch. There’s definitely a shift,” Ms. Halsey said.
Interest in pre-launch funds is being driven in part by a growing number of incubator groups looking to forge relationships with managers early on and swap seed capital in exchange for fee-sharing arrangements. There’s also interest from investors, including funds of funds, seeking to form ties to new talent early on, Ms. Halsey said.
“Some funds may have shorter track records, but they may not have difficulty in attracting capital if the managers have run portfolios before–for example, a mutual fund,” she said.
