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You've built a track record. Now it's time to run your own fund. We help portfolio managers and traders transition from employee to fund manager with institutional capital behind you.
Launching your own fund takes a vehicle, service providers and day-one capital, and that capital usually comes from a seed investor. A seeder typically takes 15 to 25 percent of the new management company's gross revenue (Tannenbaum Helpern), and the right to buy that share back later appeared in fewer than half of deals, so it has to be negotiated at the start (Seward & Kissel). Before you resign, check your employment agreement for non-compete, non-solicit and confidentiality terms.
Spinning out in numbers
15 to 25 percent
The share of the management company's gross revenue a seed investor typically takes (Tannenbaum Helpern).
Five times
The most common formula buyout price: five times the seeder's trailing 12, 24 or 36 months of payments (Seward & Kissel 2014 to 2018 study).
Three years
The seeder's lockup in half of 2023 seed deals, up from about 10 percent in 2018 (Seward & Kissel, 2023).
1.27 years
The average track record investors required in a 2026 survey; 58 percent would consider a flagship fund with one year of history or less (AIMA and Marex, 2026).
561 launches
Hedge fund launches across the industry in 2025, against 287 liquidations (HFR).
The arithmetic, with round numbers
Take a $200 million fund charging a 1.5 percent management fee. That is $3 million a year in management fees. A 20 percent revenue share sends $600,000 a year of that to the seeder, plus 20 percent of any performance fees. A buyout at five times trailing 12 months of payments would cost $3 million on the management fee share alone. These figures are illustrative, not a quote. Our seed deal cost research covers the ranges in detail.
Questions
Can I apply while I am still employed at a fund?
Yes. Many managers first get in touch while still at a hedge fund, prop shop or asset manager. Review your employment agreement for non-compete, non-solicit and confidentiality terms before sharing performance or client details.
What is day-one capital?
Day-one capital is an anchor allocation that is in the fund when it opens, so you launch with assets under management instead of starting from zero. It usually comes from a seed investor in exchange for a share of the fund’s economics.
What does a seed investor take in return?
Typically a share of management and performance fee revenue, and sometimes capacity rights or reduced fees, often for a set period or until a buyout. See what a hedge fund seed deal actually costs.
How should I present my track record?
Show the performance you can attribute to yourself, explain how it was calculated and over what period, and say whether it has been independently verified. Include it in the pitch deck you upload with your application.
Can I buy the seed investor out later?
Only if the deal says so. In Seward & Kissel's 2014 to 2018 data, an explicit buyout right appeared in fewer than half of seed deals. Where one was agreed, the most common price was five times the seeder's trailing 12, 24 or 36 months of payments.
How short a track record will investors accept?
Shorter than it used to be. In the AIMA and Marex Emerging Manager Survey 2026, the average track record investors required was 1.27 years, and 58 percent would consider a flagship fund with one year of history or less.
Last updated: November 2026. Figures come from the linked studies and describe the market, not any single deal. General information, not investment, legal or tax advice.
Further reading: What a hedge fund seed deal actually costs, with sourced figures on revenue share, lockups and buyouts.
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