Morgan Stanley prime brokers are busy helping negotiate opportunities for i
Morgan Stanley prime brokers are busy helping negotiate opportunities for institutional and HNW investors to provide seed and expansion capital to Asian hedge funds reported Bloomberg this week. Hugh Abdullah, the US investment bank’s Hong Kong-based regional head of capital introductions said that event-driven and equity l/s managers were in demand as investors look to enjoy a share of the revenues. As opposed to money being allocated for management, seed capital gives investors a percentage of revenue streams or secures an equity stake in the business itself: sometimes a more attractive option to ambitious investors looking at start-ups with less than USD10million in AUM. “True hedge fund talent is a scarcer resource out here, people always want to find the next winner,” Abdullah was quoted as saying. With regional AUM still below pre-crisis levels at USD88billion, managers are looking to secure this acceleration capital in order to get to the next level. Abdullah said that a number of funds were entertaining using a seeder to get to the USD50million to USD100million level in order to be viewed as “more investable”. “You’re starting to see certain people offering much larger tickets. However, there are only a handful of groups which can realistically write tickets of USD100million plus,” said Abdullah. The deals Morgan Stanley are currently negotiating are believed to involve investments of between USD30million to more than USD70million.
