Hedge funds returned an average 5.2 percent in May, the best performance in more than nine years, as they attracted more money and global markets rallied, Eurekahedge Pte said. The Eurekahedge Hedge Fund Index, tracking more than 2,000 funds, has advanced 9.2 percent this year, according to a preliminary report by the research firm based on the 27 percent of funds that reported May performance. The industry recorded net inflows for the first time in 10 months in May, gaining $1.5 billion, while total assets rose by $5 billion, the report said.   more »

India will introduce exchange-traded interest-rate futures to provide a mechanism to institutions and households to hedge their interest-rate risks. The contract will have 10-year government bond with a 7% semiannual compounding notional coupon rate as the underlying security, the Reserve Bank of India and the Securities and Exchange Board of India said in a joint report on interest-rate futures. The size of a single contract will be 200,000 rupees ($4,196) and the maximum maturity of the contract will be 12 months, it said. The contracts will be traded on the currency derivatives segment of a recognized stock exchange, the report said.   more »

Better fasten those seat belts, investors, because if hedge fund managers have any insight at all, the credit crunch and market turmoil may not be over yet. About 800 gathered for the GAIM International hedge fund and alternative investment event in Monaco.Russell Abrams, founder and senior portfolio manager of Titan Capital Group, which manages hedge funds using volatility arbitrage strategies, said 2009 could shape up as mirroring 2008 somewhat.As for the major currencies in the short term, he said the dollar will benefit as stimulus efforts begin to kick in: "I feel once [stimulus efforts] they start to bite, the American economy is ready to go and could go really, really strongly." But for the longer run, Leskinen said, the strength is not that convincing. "I think the shift of the world's economies has gone to China and India and these BRIC (Brazil, Russia, India and China) economies. They are the new economy superpowers in the economic world.   more »

Asia-based hedge funds will see a turnaround in inflows in the third quarter as investor confidence returns, but new players may still struggle on concerns over risk controls in the scandal-hit industry. Like their counterparts in Europe and North America, Asian hedge funds have suffered heavy redemptions since Lehman Brother's collapse in September and the Madoff fraud spooked investors and spurred a retreat to safer assets. But the pace of withdrawals is slowing, and several industry players predict Asian hedge funds could see net inflows during the second half of 2009, judging by expressions of interest by potential investors and requests for research and due diligence. Lipper's Gentilini estimates that in a post-Madoff era, new funds may need $250 million in assets under management to generate enough fees to cover the overheads needed.   more »

Hedge fund Helios Capital has overweight positions in Indian infrastructure and bank shares as it hopes the Congress-led government's election victory will expedite reforms and boost growth in Asia's third-largest economy. State Bank of India, the country's largest, state-run Punjab National Bank, Crompton Greaves and Alstom Projects are part of Helios' holdings, and fund manager Samir Arora said it could buy more. "If you are playing the stability or policy or better government or reforms, then it has to be basically these two sectors," Arora, who manages nearly $200 million in Indian equities at the Singapore-based firm, said on Friday.   more »

After overseas pension pools and foreign portfolio funds, it’s now sovereign wealth funds that find India an irresistible investment destination. Governmentpromoted investment funds of various countries have invested close to Rs 14,850 crore during the eight-year period beginning 2000, according to a report released by the United States Government Accountability Office. Sovereign wealth funds are typically state-owned investment funds that have a global invesment horizon and are sometimes owned by central banks of countries.   more »

A recent RBI (Reserve Bank of India) Report shows that India private banks continued to expand their contingent liabilities, or off-balance sheet exposures, in line with the trend seen in recent years. Contingent liabilities of banks in India increased nearly 88.44% to Rs. 144.3 trillion in 2007-08 as more companies rushed to hedge their foreign exchange contracts to tide over the volatility in currency markets. This is over and above the 80.2% growth in off-balance sheet exposures seen in 2006-07.As a consequence of this significant rise in contingent liabilities, the total off-balance sheet exposure of private banks in India at the end of March 2008 was more than three times the size of their consolidated balance sheet.HDFC Bank, one of the most reputed and admired private banks in India, leads the pack with an exposure of 445% of total assets, followed closely by Yes Bank, one of the smallest private banks at 405% of total assets. In contrast, the largest bank, the PSU State Bank of India, has been the most conservative with its contingent liability exposure at 92% of total assets.   more »

The Childrens' Investment Fund, the $9.5 billion (6.5 billion pounds) London activist hedge fund, has liquidated its holdings in Indian state-owned banks, according to the Financial Times, in one of the biggest single selldowns by a foreign institutional investor in the country's stock market. In the past three months, the fund has sold holdings in eight banks, from state-owned Bank of Baroda to Union Bank of India, the FT reported.   more »

Mark Fuchs, chief executive of Singapore-based Fuchs Capital Partners, said in an interview with Dow Jones Newswires that he is launching a hedge fund focused on trading blue-chip, large-capitalized Southeast Asian stocks in the region in two months. Fuchs, the former head of Credit Suisse Group's (CS) Southeast Asia equities division, has teamed up with two other Southeast Asian veterans: Winston Loke, who was previously Credit Suisse's Chief Operating Officer for Asia-Pacific ex-Japan, Australia equities and Mark Maroongroge, most recently a portfolio manager with London-based hedge fund HBK Capital Management. He declined to elaborate on the size of the fund, however, other than to say it will start off "modest" in size but would eventually be "significant."   more »

West Palm Beach (HedgeCo.net) - India hedge fund manager, Taurus Mutual Fund, launched India’s first actively managed Equity Oriented Shariah compliant fund, the ‘Taurus Ethical Fund’. With a minimum investment of INR 5000 ($100K), the open-ended diversified equity fund opens on February 19, 2009 and closes on March 20, 2009. Launching in Mumbai, the hedge funds has been certified by an independent Shariah Board named TASIS (Taqwaa Advisory and Shariah Investment Solutions).   more »