Swiss Bank Plans India Hedge Fund

Stephen Harris

12 May 2005

Mirabaud & Cie is planning to launch an India hedge fund of up to $100 million. Targeted at investors globally the fund will start off with up to $20 million and will be launched in the next six to eight months. Mirabaud & Cie already runs a $750 million Asia Capital Holding Fund which invests all over Asia. Global hedge funds could ratchet up their investments in Asia during the next 12 to 18 months as fund managers seek undervalued assets, according to industry executives. Hedge funds have about $65 billion currently invested in Asia, accounting for about 6.5 per cent of the $1 trillion in these funds globally, far less than the region's 15 per cent share of world share-market capitalization, according to industry figures. Eurekahedge, an industry consultant, predicts growth in Asian assets to $85 billion in 2005, from $60 billion in 2004. Hedge fund investments in Asia outside Japan are going to increase "dramatically" to "well over $100 billion," Colin Lunn, the Asia head of sales for alternative fund services at HSBC, said in press reports. "There are a lot of sleeping giants out there." "We find that strategies like distressed debt and private-equity plays work better in Asia," he said, because "you have a lot more undervalued assets in Asia than in the rest of the world." He also said fund managers were adding commodities to their portfolios to take advantage of China's ravenous appetite for raw materials.