Seward & Kissel LLP’s latest Seed Transaction Deal Points study highlights a notable shift in seed investment trends, signaling increased investor interest in illiquid strategies such as private equity and private credit—moving away from traditional hedge funds and liquid products.
The 11th annual edition of the study indicates that institutional investors continue to dominate seeding activity, driving up median investment sizes and influencing the evolution of deal structures. These deals now show a stronger emphasis on alignment among managers, seeders, and third-party investors.
“This change is fueling innovation in seed deal terms,” said Gary Anderson, Partner at Seward & Kissel and lead author of the report. “We anticipate this trend to intensify, with private markets likely to surpass hedge funds in terms of seeding volume.”
The findings point to increasing flexibility and creativity in deal structures, with seeders embracing shared start-up costs, investor-aligned liquidity terms, and long-term support frameworks. These dynamics underscore a maturing market focused on sustainability, risk management, and strategic alignment.
Key highlights from the 2024 report include:
- Innovative Deal Terms: Illiquid structures are prompting greater diversity and customization in agreements.
- Manager Incentives: Structured deals are rewarding long-term commitment and strategic growth.
- Focus on Risk and Alignment: Investors are prioritizing collaborative terms to manage market volatility and ensure stable partnerships.
The full study is available for download, and Gary Anderson is open to media discussions regarding the insights and implications of the findings.
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News Source: Businesswire.com
