Kuwait investment firm launches new India-specific fundAugust 28th, 2008 - 2:46 pm ICT by IANS
Dubai, Aug 28 (IANS) Kuwait-based investment company Global Investment House (GIH) has launched a new hedge fund aimed solely at the Indian market.The new Mayur Hedge Fund is a long short absolute return growth-oriented fund with a net long bias and will provide investors the opportunity to benefit from the long-term growth of the Indian market, according to a GIH statement.
This is GIH’s first direct India-focused product.
“India is an open economy and there is substantial potential for growth bolstered by foreign exchange inflows,” Joseph Joseph, head of hedge funds at GIH, said in the statement.
“However the economy is not dependent on foreign money as it is underpinned by domestic institutional money such as domestic life insurance companies which are amongst the biggest investors at present,” he pointed out.
According to Shailesh Dash, head of alternative investments at GIH, the investment case for India is powerful as the country’s growth dynamic is based on domestic consumption, services, high levels of investment and infrastructure spending.
He said that the Mayur Hedge Fund was well positioned to effectively tap into these trends to the benefit of its investors.
India is already the fourth largest economy in the world in terms of purchasing power parity and is projected to be approximately 60 percent of the size of the US economy by 2025.
The country plans to spend an estimated $475 billion between now and 2012 on roads, railways, ports, electricity transmission lines and other infrastructure, the GIH statement said.
“The development of a world class infrastructure is central to India’s emergence as a global economic powerhouse,” it stated.
The Indian stock market also offers one of the world’s most diversified basket of stocks and sectors.
According to Joseph, the fund would aim to build and maintain a diversified portfolio of well researched exposures, and would be capable of offering strong downside protection as well as upside gains by shorting equities and index strategies.
India’s derivatives market has a turnover of over $7.7 billion per day, which provides liquidity to make this strategy feasible.
The new fund will be advised by a team in Global Investment House India Private Limited, a wholly owned subsidiary of Global, based in Mumbai and headed by Dileep Madgavkar, formerly chief investment officer of ICICI Prudential Asset Management.
There will be no exit fee charged on the fund, which will target a return of 15-20 percent.
“This is despite the fact that uncertain global markets are undergoing a correction and the Indian markets are likely to be range bound in the near term,” the GIH statement said.
Global received its foreign institutional investor (FII) licence and issued its first India economic report in 2006 and has committed approximately $100 million in the Indian markets.