HSBC Halbis Capital Management told Reuters on Monday that it plans to launch a long-short India mid-cap hedge fund because it sees good opportunities there and that it wants to launch more emerging market funds. Speaking at the Reuters Hedge Fund & Private Equity Summit in London, Bill Maldonado, head of alternative investments at HSBC Halbis, said the firm is looking to separate out an India mid-cap portfolio of up to $400 million from its main India market neutral fund.   more »

In August 2007, SEBI decided to regulate hedge funds by asking them to register as Foreign Institutional Investors. But before going into the debate of whether this was the correct move by the market watchdog or not we need to have an overview of the relevant provisions under which such registration is proposed. It was after the SEBI (Mutual Fund) Regulations of 1996, that the asset management business under private sector took its root in India. In the same year SEBI also notified Regulations and Rules governing Portfolio Managers who pursuant to a contract or arrangement with clients, advise clients or undertake the management of portfolio of securities or funds of the client. There is no information about any hedge funds domiciled in India. Further, on account of limited convertibility, offshore hedge funds (domiciled in Bahamas, Bermuda, The British Virgin Islands and the Cayman Island) have yet to offer their products to Indian investors within India. Although, Indian hedge funds are not known to exist, there is nothing to prevent a group of persons from pooling their resources to invest in stock markets, indulging in speculative trading and using leverage to enhance profits. As regards foreign hedge funds operating in India, this could be done through the Foreign Institutional Investor (FII) route (through their sub-accounts) or as they have been doing through instruments like Participatory Notes (PNs). SEBI (Foreign Institutional Investors) Regulations, 1995, regulate the funds through the FII route. Under these regulations (Regulation 2(f)), a Foreign Institutional Investor is defined as an institution established or incorporated outside India which proposes to make investment in India in securities.   more »