Grosvenor Capital Management, the world’s fourth-largest fund-of-hedge-funds manager, has launched a seeding fund, its first formal effort to provide capital to new managers since 1999.

Grosvenor has raised $400m for the Grosvenor Emerging Managers' Fund, according to a source familiar with the situation. It plans to continue fundraising for the rest of the year, as well as look for managers to back, the source added.