Global hedge funds, which are on the lookout for multi-fold returns on their investments, are slowly entering the booming domestic real estate sector. Major hedge funds operating in the Indian property markets include Och-Ziff Capital (founded by hedge fund legend Dan Och), New Vernon Capital, Farallon Capital Management (the world’s largest single-manager hedge fund), Marathon Realty, DE Shaw and Tiger Global (a $1.4 billion hedge fund run by ex-principals of legendary trader Julian Robertson’s Tiger Management). Hedge funds invest in the real estate sector through three routes, namely, through the purchase of equity stakes in listed/unlisted property developers, by direct participation in real estate projects or by putting a part of their funds into real estate funds floated for the Indian market, according to senior industry officials. Though hedge funds do not have India-dedicated funds, they invest in the Indian market from their global or the Asia-Pacific funds. According to industry estimates, about $1.6 billion private equity/hedge funds investments have been made in the real estate sector last year (Jan-Dec). It is expected to cross $2 billion this year. Some of the hedge funds’ investments in India include New Vernon’s commitment of $250 million to the real estate sector from its $2 billion India-dedicated fund, DE Shaw’s $400 million investment in DLF Assets, which will develop SEZs across the country, Och-Ziff Capital’s 25 per cent stake acquisition in Nitesh Estates, a Bangalore-based real estate developer, for $51 million. Farallon has been a big investor in the Indiabulls Group, a big player in the property sector.   more »