Bloomberg – FRM Capital Advisors Ltd., a unit of London-based asset manager Financial Risk Management Ltd., plans to make as much as $300 million of strategic investments in hedge funds this year, including its first in Asia.

FRM Capital may invest in six more managers in 2009, with two expected by June and its first Asian deal in the third quarter, Chief Operating Officer Patric de Gentile-Williams said. The London-based company makes strategic investments in hedge funds for two to four years in exchange for a share of their fee incomes for as long as 10 years.

Record losses and redemptions have cut hedge funds’ assets and fee revenue, making them more reliant on so-called seeders like FRM Capital. Some investment banks, insurers and private equity houses have exited the hedge fund seeding business amid the credit crisis, said de Gentile-Williams.

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Bloomberg – Assets owned by hedge funds including borrowings may have fallen by 75 percent to a decade- low, with less competition paving the way for better returns, said Blaine Tomlinson, chairman of Financial Risk Management Ltd.

The total book size of assets owned by hedge funds may have declined to $2 trillion, from $8 trillion, he said at the GaimAsia 2009 hedge fund conference in Hong Kong today, reducing the industry to a level last seen a decade ago. Tomlinson founded Financial Risk Management, a London-based fund of funds manager overseeing $10 billion, in 1991.

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