Dubai-headquartered Baer Capital Partners is planning to launch two India-dedicated hedge funds this year despite the bearish sentiment ruling the bourses since January-end.
The two funds - Beacon India Opportunities Fund with a corpus of $400 million and the $100 million Beacon India Growth Fund - will invest in listed companies. Baer is in the process of securing the regulatory approval for foreign institutional investor (FII) licence.
"Our shareholders have already lined up money for the Beacon India Opportunities Fund. This fund will invest mainly in mid-cap stocks. Investors will have the redemption option if they give a three-month notice at the month end. None of these funds would be involved in momentum trading, which is usually practised by hedge funds," said Alok Sama, President and Founder, Baer Capital Partners.
Baer Capital's move comes after several leading hedge funds received approval from the Securities and Exchange Board of India in recent weeks.
Recently, Renaissance Technologies, the world's largest hedge fund firm handling assets worth $35.4 billion, received the go-ahead
The liberal approach adopted by the regulator on hedge fund participation has paved the way for several global hedge fund players into the Indian market including DE Shaw, Och-Ziff Capital Management and Citigroup's Vikram Pandit-promoted Old Lane.
Baer Capital, which recently concluded its $80 million investment in the Delhi-based Vatika group has roped in B P Singh (ex-CIO at Deutsche AMC) to head its hedge fund initiative in India. The fund has already put in place a team of 6 people.
Both these offshore funds will be listed in Luxembourg and invest across sectors including IT, pharma, FMCG, banks and auto.
The Growth Fund will be akin to a conventional mutual fund, showing daily NAVs, and invest mainly in large caps with long-only equity strategy. The fund will be scalable in that it could garner more money from investors if required.
Baer Capital is also planning an exclusive $100 million FMCG fund. "We will have a $100 million fund which will invest only in the FMCG space," Sama said.
