Hedgeweek Comment: AIG's hedge fund seeding is right on cue
What a novel idea. The asset management arm of giant insurer AIG is forming a partnership with a hedge fund investment group to seed emerging hedge funds.
AIG Investments is teaming up with Larch Lane Advisors, an alternative investment affiliate of UK-based Old Mutual Asset Management, to invest between USD50m and USD200m with hedge fund start-ups, teams of traders leaving established management groups and more mature hedge funds that need restructuring.
Larch Lane chief executive Mark Jurish says: 'Talented investors are leaving large hedge funds to start their own businesses, but many of them have not been able to reach their capital targets. The current supply/demand imbalance for start-up hedge fund capital represents the best seeding opportunity I've ever seen.'
There is no doubt that the fast pace of hedge fund asset growth has slowed. The credit crunch and liquidity squeeze has put a dampener on hedge funds in recent months and some managers have gone out of business. At the same time, many executives have left their firms to set up hedge funds on their own.
While larger managers have weathered the storm, smaller and start-up firms are struggling to attract investors. For some of them, AIG's seed money might just prove to be the key - for start-ups to develop, and for AIG to benefit from the outsized returns that studies show early-stage managers deliver. Other large players should follow AIG's example and step up to the mark.
- Special Reports
- By Location
- Asian Hedge Funds
- BVI Hedge Fund Services
- Bermuda Hedge Fund Services
- Canada Hedge Fund Services
- Cayman Hedge Fund Services
- Channel Islands Stock Exchange
- Future of offshore funds
- Gibraltar Hedge Fund Services
- Guernsey Hedge Fund Services
- Hedge Funds in Germany
- Hong Kong Hedge Fund Services
- Ireland Hedge Fund Services
- Isle of Man Hedge Fund Services
- Jersey Hedge Fund Services
- Jersey Private Equity Services
- Latin American Hedge Funds
- London Hedge Fund Services
- Luxembourg Hedge Fund Services
- Malta Hedge Fund Services
- Middle East Hedge Fund Services
- Singapore Hedge Fund Services
- South African Hedge Fund Services
- Spanish Hedge Funds 2008
- Switzerland Hedge Funds
- US East Coast Hedge Fund Services
- US Hedge Fund Services
- By Subject
- Conference reports
Latest Special Report
- By Location
- How to set up a hedge fund