HEDGE FUNDS IN INDIA, SCOPE OF HEDGE FUND, PRESENT SCENARIO, STRATEGIES OF HEDGE FUNDS, OVERVIEW OF HEDGE FUND, FEES STRUCTURE OF FUNDS, PERFORMANCES OF LOCAL AND FOREIGN FUNDS, ASSET UNDER MANAGEMENT DATA

1. HEDGE FUNDS IN
INDIA

2. Team
Members
Dipti Basheer Saurabh Santhanam

3. What is a hedge fund?
 “To hedge one’s bets “ i.e. betting on other side to limit the possibility of loss on a speculation.
 Hedge funds
 Pool of funds of the highly influential investors.
 Open to limited number of investors .
 Required high investment
 Includes high expertise based investments strategies and risk management .

4. Overview
 Reduced regulated oversight.
 Private in nature.
 Often most aggressive investment strategies
• Absolute return funds
• Directional funds
• Short selling
• Leverage
 Greater investment flexibility.
 Performance fees or incentive allocation.
 Frequently substantial investment by advisers and portfolio managers.
 Tax benefits from funds structure.

5. Hedge Funds in India
Cater to individual investors
First Implication
Uncorrelated
returns
Surge in earnings
Loose charm for
other investment
avenues
Second
Implication
Increase in demand
Increase competition
Reducing investment
fess
Also has cost to it
Registration
Independent audit
Transparency
Proper disclosure

6. Some Of The Hedge funds in India
 HFG India Continuum Fund
 Avatar Investment Management
 India Deep Value Fund
Redart Capital
 Karma Star Fund
 India Capital Pvt Ltd
 India Value Investment Limited
India Insight Value Fund

7. Indian Hedge Fund Managers

8. Scope
 The scope of hedge funds in India seems to be good, if it basically deals with the following
problems:
• Confined only to High Net worth Individuals (HNIs)
• Legal provisions
• Many regulatory provisions on short selling which is one of the major strategies used in
hedge funds to maximize returns.
• When compared with other countries, other countries funds seems to be more appealing.
 Some factors moving in favor of hedge funds in India are:
• Many hedge fund schemes are being launched with highly skilled fund managers
• Larger scope of expansion because of anticipation of good returns from the market.
• Consistent increase in the investments by HNIs.

9. Fund of funds
Fund of fund is investing in various managers or various stratagies to diversify the
risk.
Types of FOF:
1. Conservative: These are funds which invest in the funds of Equity neutral, fixed
income arbitrage and convertible arbitrage.
2. Diversified: These are funds which invest in the funds of various strategy among
various managers.
3. Market defensive: These are funds which invest in the funds of short biased
strategies.
4. Strategic: These are funds which invest in the opportunistic funds which is
investing in emerging markets, individual sector, etc..

10. Strategies of hedge funds
Strategies
Event
Driven
Relative
Value
Equity
Hedge
Macro
Bottom up, short term(based on corporate events)
Finding opportunities from mispricing.
Fixed Income arbitrage, volatility etc.
Bottom up, use fundamental/technical analysis
Top down, overall market/economic trends

11. FEES STRUCTURE
A common fee structure is “2 and 20” & “1 and 10”
The 2% and 1% fee is the ANNUAL FEES or the MANAGEMENT FEES.
Typically for covering OPERATIONAL EXPENSES.
20% and 10% is the PERFORMANCE FEES, charged on the year’s NET
PROFIT.
Paid when the fund earns substantial profits or when outperform the INDEX.

12. PRESENT SCENARIO OF HEDGE FUNDS IN
INDIA
The Reserve Bank of India (RBI) on 16 November removed restrictions on
alternative investment funds of category 3 which includes hedge funds are based
in India for accepting foreign capital.
The total amount managed by all Indian hedge funds is $3.6 billion, of which
$3.2 billion, or 88.63%, is managed by managers based outside the country.
The global hedge fund industry has a size of $2.24 trillion, according to data
from hedge-fund tracker Eurekahedge.

13. SOURCE :
EUREKAHEDGE

14. SOURCE :
EUREKAHEDGE

15. Asset Under Management
SOURCE :
EUREKAHEDGE

16. Indian Hedge Funds Returns In %
SOURCE :
EUREKAHEDGE

17. In News

18. Sources
 www.moneycontrol.com
 www.timesofindia.com
 www.slideshare.net
 www.nauticalweb.com
 www.livemint.com
 www.redartcapital.com
 www.eurekahedgefund.com
 CFA BOOK