Europe's largest hedge-fund manager Brevan Howard Asset Management LLP has set up two Mauritius-based investment entities to route funds from its flagship $15 billion Brevan Howard Master Fund to invest in India. The London-based fund house, which manages $24 billion in assets world-wide, disclosed this in a stock-exchange filing last week.
Given its status as a tax haven, Mauritius is the most common way to route funds into India by both financial and strategic foreign investors. Over time it has become the biggest source of foreign direct investment into the country even as there are no big Mauritius located firm to have operations in India.
It is not clear if Brevan Howard already has an exposure in India market. In in disclosure to the London Stock Exchange, it announced the creation of two trading subsidiaries BHIOF Investments Limited and BHMF Securities Limited.
"The purpose of each of the subsidiaries is to hold certain investments in India however the company does not expect any such investments to be of a material nature," it said. So the two units may not lead to significant jump in inflows into Indian bourses but it could open another channel of foreign money.
The interest of hedge funds on India could be due to sharp jump in stock prices over the last six months with the benchmark index Sensex moving up over 75% from its lows.
UK-based fund house had escaped the blood bath faced by many other fund global managers as stock markets tanked through much of 2008 and specially after Lehman Bros declared bankruptcy in September’08.
Alan Howard, the firm’s co-founder and biggest shareholder, switched assets to cash before the credit crisis blew apart. Howard, a former head of the proprietary trading desk at Credit Suisse First Boston, had started Brevan Howard seven years ago with four other colleagues.