Basic Question
I know this is something I should know but I’m a freshman so please bear with me. I am not a HF expert by any means but I’m trying to learn and I didn’t find my answers in my searches. This is a question about a SkyBridge Capital type of firm. From what I understand they are a seeding and HF advisory firm. So please fill in the blanks and correct me please. So they will help develop the funds in return for a piece of ownership. Also when it comes to seeding they will take someone’s money and tell them what funds to put it in? Thank you for dealing with my stupidly and thanks for the help!
Basically, Skybridge collects money from a group of investors, and then invests it in a diversified portfolio of hedge funds. This is a pretty common strategy, and generally a firm that does it is called a "fund of funds".
What Skybridge and other "seeding funds" do differently is seek out new/emerging managers and negotiate a deal where they get a % of equity in the management company (the entity that receives the management and incentive fees from the hedge fund) in return for their investment. Skybridge then benefits from both the performance of its investment in the fund itself AND the potential growth/success of the fund overall.
Their other service lines, things like managed accounts and "hedge fund advisory," are essentially variations of the above.
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