Hedge Fund Seed Capital Could Reach $5B

Jan 4 2011 | 2:57pm ET

There could be a lot of money available for nascent and start-up hedge funds this year, with available seed capital potentially hitting $5 billion.

Seeders have already raised about $3 billion, Justin Fredericks, head of Americas capital introductions at Bank of America Merrill Lynch, told Hedge Funds Review. "We believe there could be another $1 billion to $2 billion of seed capital raised in 2011," he added.

The Blackstone Group is likely to be among the biggest players, with plans to raise about $1.5 billion. Investcorp, NewAlpha, SkyBridge Capital Partners and Revere Capital Advisors are also expected to be very active.

"The seeding landscape has changed since the financial crisis," Fredericks said. "We have seen some people exit the seeding business, but there have also been a number of new entrants."


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