CNN Money – Growing companies could be tapping into a new source of capital in 2007: Hedge funds are getting into the private-equity business. And although some are investing in large venture capitalor similar institutional funds, other managers are hitting the VC breakfast circuit in search of direct investments.<\/p>\n
Hedge fund Managers have always had the freedom to invest 10 percent of their fund, known as a “side pocket,” in illiquid assets. Traditionally they’ve chosen real estate or big energy companies. But lately they’ve been looking at more creative outlets, including small growth businesses.<\/p>\n
“This is money directly going to companies,” says Russell Tencer, managing partner at the Parker Boston Group (parkerboston.com), a consulting firm that has played matchmaker for half a dozen such deals in the past year. “We found that around half our contacts in the hedge fund world were willing to consider making a private-equity investment.”<\/p>\n