Wednesday, September 05, 2007

Short Selling Hedge Funds Priority

The reputation of global hedge funds may have taken a knock after the subprime mess in the US, but as far as India is concerned, there seems to be no such problems for India-focused hedge funds.

Hedge fund managers across Asia are converging in Hong Kong next week for a four-day conference, of which one session will discuss the prospects and potential for the hedge fund industry in the Indian equity and debt markets.

The inaugural Hedge Funds World India 2007, to be held on September 14, is being held in conjuction with the 10th annual Hedge Funds World Asia 2007,

The meeting, which comes after the Securities and Exchange Board of India (Sebi) taking a stand that hedge funds be allowed to enter the Indian equity markets directly by registering as a foreign institutional investor, will discuss among other things the possible strategy to be adopted by hedge funds when short selling is introduced.

The Sebi board, about a couple of months back, approved short selling of securities by institutional investors, including foreign funds.

G Anantharaman, wholetime director of Sebi, will be a key speaker for the event. The Sebi executive will chair a session will discuss short-selling by foreign investors (including hedge funds) and concretising the policy on hedge funds, both offshore and domestic.

“You always associate hedge funds with risk and destabilisation. But, actually, most India-specific hedge funds are long-only players. They don’t enter and exit fast,” said an advisor for one of the hedge funds in India.

“There are hedge funds that adopt short-selling strategies. Once short selling is introduced, it opens up opportunity for a completely new strategy for hedge funds,” he said.

Hedge fund tracking firms reckon there could be anywhere between 12 and 15 India-focused hedge funds (onshore and offshore). They could be handling about $ 1.5 billion to $ 2 billion in assets, they say.

Some of the names are Kuvera Capital, Avatar Investment Management, Monsoon Capital, Amoeba Capital Partners, Helios, India Capital Fund, Atyant Capital India Fund, Boyer Allan India Fund, Baer Capital Partners, among others.

At least half-a-dozen foreign funds, which are renowned for their hedge fund strategies, are operating directly in India by registering themselves with the Securities and Exchange Board of India.

They include Italy-based Aletti Gestielle Societa, Toronto-based DGAM Emerging Markets Equity Fund, Karma Capital Management and Blackrock Advisors.

The meeting will feature Ajay Bagga, CEO of Lotus India AMC, Ved Prakash Chaturvedi, managing director of Tata MF, Gautam A Prakash, managing director and founder of Monsoon Capital, Harpreet Singh, head of branch banking & wealth management services of Centurion Bank of Punjab, Anish Modi, CEO of India Debt Management and Rahul Saraogi, principal of Atyant Capital Partners.

Business Standard


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