Incubating Hedge Funds For The Future: A BVI Perspective

To incubate is to keep something in a suitable environment for a term where it can develop to its full potential. Increasingly, the concept is being applied to hedge funds, where "to incubate" implies structured conditions for the development and verification of investment strategies over time. As such, an incubator fund is ideal for start-up and emerging managers who do not have much capital but aim to attract greater sums of capital in the near future. Establishing a verifiable track record via an incubator fund has proven successful in demonstrating a manager's capabilities, and is an opportune path for attracting meaningful capital sums. Structured properly, an incubator fund offers new opportunities for emerging hedge fund managers.