Section A Group 6 Abhay Sharma 1A Aniruddh Srivastava 9A Devansh Doshi 16A Manasi Jain 23A Sachin Gupta 38A Vidooshi Joshi 55A
Section A Group 6 Abhay Sharma 1A Aniruddh Srivastava 9A Devansh Doshi 16A Manasi Jain 23A Sachin Gupta 38A Vidooshi Joshi 55A
Abhay Sharma 1A
Aniruddh Srivastava 9A
Devansh Doshi 16A
Manasi Jain 23A
Sachin Gupta 38A
Vidooshi Joshi 55A
Biggest insider-trading scandal in HEDGE FUND
history
Rajat Gupta had tipped off Raj Rajaratnam, the owner of $3 billion Galleon fund
about Warren Buffett's confidence-boosting $5 billion investment in the teetering
investment bank in September 2008, during the depths of the market turmoil.
Aggressively Managed High Initial Minimum
Portfolio Investment
HEDGE
FUNDS
Family Pension
offices funds
Private Endowm
banks ents
Long Only Short Only
Professional management of
money
Mutual Funds Hedge Funds
Aggressively pursue
Risk averse
risk
Generally
Regulated
unregulated
Absolute Returns
Benchmarks
• Analyze relative returns versus a benchmark example the S&P 500 Index
Quartile Chart
• the top quartile of peers on an absolute return comparison, standard
deviation, and a variety of other metrics
Qualitative Factors
• Evaluations of management
A fund must have good, strong management just like a
company
• Back-office operations
Including trading, compliance, administration, marketing,
systems, etc
• Scale
It takes a subjective opinion to determine whether a fund's
strategy will be impacted by having too large of a fund and
by how much returns will be affected
A novelty in India
New investment style in a country that traditionally prefers
buying and holding stocks
Domestic investors are not used to the high fees commanded
in the hedge fund industry
High success threshold in a country where plain vanilla bank
deposits offer nearly double-digit returns
India-focused foreign funds returned 12.3 percent last year
Overseas funds are not regulated
SEBI imposes
A 1,000-investor limit
A 10 million rupee (US$188,000) minimum investment
requirement
A minimum size of 200 million rupees (US$3.8 million)
Typically, India-based hedge funds are relatively risk-averse
and invest in illiquid equity funds
Source: CFA Institute