India Hedge Funds Are World’s Best Performer on ‘Modi, the Hero’
Hedge funds investing in India have become the world’s best performers this year on expectations that Prime Minister Narendra Modi will revive Asia’s third-largest economy.
India-focused hedge funds, with a sixth of the $16.5 billion in assets of those investing in Japan, are set for the strongest return in five years after Modi secured the nation’s largest election victory since 1984 in May.
“Times have changed and we have Modi, the hero,” said Samir Arora, Singapore-based founder of hedge-fund firm Helios Capital Management Pte. Helios Strategic Fund, which bets on rising and falling stock prices, has returned 36% this year through the end of July.
The best-performing hedge fund investing in India in 2014 is the India Insight Value Fund, which returned 78% until the end July, according to data compiled by Eurekahedge. It is followed by The Mayur Hedge Fund, which gained 49% and the Malabar India Fund LP, which added 48.6%.
While Modi’s government swept into office in May with the biggest lower-house majority in three decades, some investors are concerned he may fail to deliver on pledges to push through measures to reform the economy.
“If Modi fails to reform the economy, it will be very negative for inflows,” said Anil Ahuja, Singapore-based manager of the IPEplus Fund 1. The fund invests in stocks, bonds and currencies and has gained 21% since its start in October, according to data compiled by Bloomberg.
Source: bloomberg
