Recovery expected for India-focused hedge funds

The India-focused hedge funds is on the road to recovery and are expected to close the calendar year 2012 on a positive note.

After tumbling by in 2011, the Eureka Hedge Fund index for India-focused hedge funds isupnearly 7.4% this year . 

September has turned out to be the second best month for India hedge funds after January, as the Eureka index rose by 8% during the month and marginally outperformed the key equity benchmarks.

This is based on net asset value reported by nearly 19% of India hedge funds to Eureka.

Experts note that the number will improve as more data pours in.

"This September returns will push up inflows to India hedge funds," said Samir Arora, Fund Manager of Singapore based Helios Capital. According to Arora, even though there were some inflows in India funds in past few months, they were not happening on too big a scale.

During September, the key equity benchmark index Sensex gained 7.6% and rupee shot up by 4.8% against the dollar, aiding foreign investors who took position in India at lower levels this year.

Hedge funds focused on China rose nearly 3.3% in September, based on NAV by 19% funds, and 3.9% on a year to date basis. On the other hand, Korea and Japan funds have given negative return this year.

Taiwan is the only country in Asia where hedge funds have better performed than India in 2012 so far. The YTD Eureka Hedge index for Taiwan funds is up 13.9%. However, India's economy is nearly five times larger than Taiwan. The Eureka Emerging Market index for hedge funds has gained nearly 5% this year.

"This September returns will push up inflows to India hedge funds," said Samir Arora of Singapore based Helios Capital. According to Arora, even though there were some inflows in India funds in past few months, they were not happening on too big a scale.

Apart from Helios Capital, some of the India focused off-shore funds include Avatar Investment Management, India Deep Value Fund, HFG India Continuum Funds, Fair Value, Indea Capital Pte, India Capital Fund, Monsoon Capital, Karma Capital Management, Atyant Capital and Atlantis India Opportunities Fund.

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