Assets under management of foreign institutional investors (FIIs) slumped 39 per cent in the 18-month period ending June 30, broadly in line with the drop in stock prices from the peak recorded in January 2008. According to data released by SEBI last week, FIIs’ asset base shrank to Rs 6,29,647 crore towards the end of June from Rs 10,27,141 crore recorded at the end of 2007. The benchmark, BSE Sensex, declined 28 per cent in this period while the broad-based BSE-500 and the BSE Mid-cap indices are down 36 and 48 per cent respectively. SEBI released this data for the first time on Friday. According to Mr Gul Teckchandani, an independent strategist, some of the investments FIIs made in mid-cap stocks at the peak are still quoting 50-75 per cent lower from that level. This explains the slightly larger value erosion of FIIs’ asset base.   more »

Citigroup-owned hedge fund Old Lane is increasing its stake in KVK Energy & Infrastructure in a deal worth Rs 116 crore, a person directly involved in the transaction said. Old Lane will invest by subscribing to compulsorily fully convertible debentures of the Indian infrastructure development company. After conversion into equity, the total foreign direct investment in privately held KVK Energy & Infrastructure will rise to 70% from 33%.   more »

An India-focussed hedge fund, which owes its name to this year’s Oscar winner for the best song, has garnered $11 million for buying Indian stocks which are ‘slumdogs’, but with potential to become ‘millionaires’. The money has been raised by ‘Helios India Jai Ho Fund’ named after the theme song of the movie ‘Slumdog Millionaire’ that scooped eight Academy Awards this year— and would be invested in the stocks that are like slumdogs of the market, but could gain significant value over time. The fund, launched by Singapore-based Helios Capital Management, seeks to replicate the storyline of worldwide box office hit, wherein the protagonist rises from Mumbai slums to become a millionaire after winning a television quiz show.   more »