Michael steinhardt, a pioneer in the hedge fund industry, has always criticized hedge fund managers as asset aggregators. In an interview with American Consumer News and Business Channel this spring, steinhardt said that today's fund managers seem to be satisfied with the rate of return and outperform the market. The real way to make money is to expand the scale of assets and survive by management fees. He said that today's hedge fund business is becoming a reward mechanism, encouraging big funds instead of seeking to win returns.

Some observers (or skeptical observers) think that the introduction of seed investment by hedge funds will give investors a chance to participate in the mechanism that steinhardt disdains but can bring high returns, so as to get a slice of it. After all, as long as funds continue to flow in, the model of collecting management fees can ensure that even the most mediocre fund managers can make money. Who would refuse such a good thing?

The so-called seed investment, you may have heard, is to inject early capital. The seeds of hedge funds are big enough to help fund managers get started; Moreover, some seed investors also provide recommendation, risk management and background help. If the investment comes from well-known companies, such as Larch Lane, Reservoir, Protégé, Blackstone or Tianqiao, it is tantamount to taking the reassurance of success in advance.

Hedge funds that get seed investment are a bit like contract slaves. Seed investors provide funds to help promote, which may sometimes bring a good reputation to hedge funds. In return, investors will get the equity of hedge funds and part of the fund management fee income within the agreed time.