Samir Arora to launch hedge fund

The high-profile former chief investment officer of Alliance Mutual Fund, Samir Arora, is set to launch a hedge fund in April. According to sources in the know of developments, Arora is currently busy marketing the fund to overseas investors.

A source close to the former CIO said, "Samir is aggressively marketing his fund to overseas investors and was in India at an investor conference held early this month."

Arora was let off last year after the Securities Appellate Tribunal found no merit in the charges levelled against him by the Securities and Exchange Board of India.

The market regulator had banned Arora from the capital markets for five years on charges of insider trading. Sebi subsequently decided to appeal against the tribunal's decision in the Supreme Court.

An e-mail questionnaire sent to Arora's last known address bounced.

Several Indian fund managers have been joining hedge funds of late. While higher pay is attracting them to the sector, a fund manager at a hedge fund told Business Standard: "Things at hedge funds are not as rosy as they look from the outside. The Indian markets are in a structural bull phase. So it is easy to make money.  The challenge will come when the markets are declining. We will have to protect the assets of investors and also give them decent returns."

Hedge funds typically charge around 2 per cent of the assets under management as professional fees and a minimum 20 per cent share of the profits.