Morgan Stanley Brokering More Asia Hedge Fund Seed Deals

May 24 2011 | 12:43pm ET

Seeding Asia hedge fund startups is becoming big business for Morgan Stanley.

The investment bank's prime brokerage is seeing more interest in Asian seeding from institutional and high-net-worth investors, and is in the process of negotiating several deals on their behalf, Hugh Abdullah, head of capital introduction in Asia, told Bloomberg News.

"True hedge fund talent is a scarcer resource out here," Hong Kong-based Abdullah explained. "People always want to find the next winner."

Right now, they're looking for it primarily among event-drive and long/short equity hedge funds, he said. In general, the investors, including funds of funds and specialized seeders, especially from the U.S. and Europe, are seeking to invest between $30 million and $70 million.

"You are starting to see certain people offering much larger tickets," Abdullah said. "However, there are only a handful of groups which can realistically write tickets of $100 million-plus."

Seeders aren't the only ones increasingly interested: The start-ups themselves are actively looking for help.

"In Asia, a number of funds are entertaining using a seeder to boost their assets to the $50 million to $100 million level, just to be viewed as being more investable by other investors," Abdullah said.


In Depth

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Cash: An Asset In Adolescence

Aug 31 2017 | 3:34pm ET

If the investment industry has a rebellious teenager in the house today, that teenager...

 

From the current issue of