Hedge fund seeding managed account platform unveiled

seedling_in_hands_410Deutsche Bank and Financial Risk Management plan to launch a hedge fund seeding managed account platform, the dbalternatives Discovery platform.

It will be based on Deutsche Bank’s existing dbalternatives managed account platform, but will extend investor protection afforded by its managed account framework into the hedge fund seeding arena.

Developed a decade ago, the platform aims to address hedge fund investor concerns regarding fraud, transparency, liquidity and independent valuation.

“The aim of hedge fund seeding is to identify and invest in the funds of select emerging hedge fund managers and to provide strategic guidance to support their development,” a joint statement says. “In return for committed capital, seeding investors receive fund returns and a share of the manager’s revenue. The latter represents an attractive way to benefit from any growth of the hedge fund manager’s assets under management.”

Financial Risk Management says it will select and negotiate strategic investments in emerging managers, which will be made through managed accounts on the dbalternatives Discovery platform. Deutsche Bank says it will also raise capital for a seeding fund, which will invest in early stage hedge funds.

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