A bear market rally on the Indian bourses is attracting a renewed interest from the hedge fund managers. It is now, Stephen Mandel, one of the highest paid hedge fund managers in the world, eyeing the Indian stock markets. Lone Pine Capital LLC, run by Stephen Mandel, and Traxis Partners LLC, are among 56 overseas funds who have registered with market regulator SEBI in July alone to invest in Indian markets, reports Bloomberg.
Interestingly, this period saw the maximum number of hedge funds registering in India. Samir Arora’s Helios Capital Management Pte is another leading hedge fund that have registered with SEBI. Stonewater Capital LLC was another one. Caxton Associates LLC, an $11 billion fund started by Bruce Kovner, and Daniel Loeb’s Third Point LLC are also among 293 funds approved in India this year. Dubai-based Baer Capital Partners had recently launched Beacon India Alpha Equity Fund, a long/short equity fund.
Why sudden surge of interest? The funds were asked to register in India to invest in indian shares, or given 18 months to sell their holdings. SEBI board will meet today to evaluate the impact of those rules, Bloomberg reported quoting the finance ministry.
Hedge funds were going through its worst patch after the break-out of subprime crisis. Emerging markets like India is expected to help revive returns of the $1.9 trillion hedge fund industry. It remains to be seen if the interest in India can be sustained. The experience of a few hedge funds in the recent past in the country have been not good, as many went out of business. Mirae Asset Management, Korea’s largest asset management firm, liquidated one of its India funds owing to steep losses. Venus Capital Management’s $100 million Special Situations Fund, a $100 million long-short hedge fund focused only on India recorded a 22.25% dip in the first half. The whole hedge fund industry in India is going through a process of deleveraging.
