Hedge fund seeding firm FRM Capital Advisors plans to capitalize on the dire straits many hedge funds find themselves in with an infusion of up to $300 million.
FRM, a subsidiary of Financial Risk Management, plans to invest in as many as six managers this year, including its first in Asia, Bloomberg News reports. Two deals are expected to close next month, with the Asia investment coming in the third quarter.
“The pricing of deals has improved in favor of the seeders,” Patric de Gentile-Williams, chief operating officer of FRM, told Bloomberg. “You really get your complete choice of deals. We’re seeing lots and lots of very talented people.”
De Gentile-Williams said seeders can get 1% of a hedge fund firm’s fee income in exchange for “well below” $2 million. Just three years ago, it took almost $4 million.
FRM’s investments this year will be between $20 million and $100 million apiece, de Gentile-Williams said.