Blackstone Alternative Asset Management, part of the US buyout group, will start seeding hedge funds next year. The plan is being developed as part of its $15bn (€12bn) European fund of hedge funds operation.
Managing director Gideon Berger said the group would target start-ups in which the individuals could probably raise the capital without its help but might benefit from the Blackstone name. Blackstone will be counting on its brand and expertise to make it a valuable partner, rather than just a provider of capital, he said. He cautioned against managers that were willing to give up 1% of revenue participation for $1m in capital â the industry standard. "The type of person who is going to give you 30% of their business for $30m is not the business you want to invest with," he said. As the hedge fund industry matures and becomes more institutionalised, demand for new talent is growing. Last year David Kyte, founder of Kyte Group, a UK proprietary trading firm, backed a hedge fund incubator. Kyte also supported the launch of Tomahawk, a long/short equity fund run under the umbrella of Marble Bar Asset Management, and more recently the Shooter Fund, run by Mark Shooter.
