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13 hedge funds receive SEBI approval

Hedge funds are similar to mutual funds in the sense of being investment vehicles which pool investors’ money

March 03, 2014 12:30 IST | India Infoline News Service
Over 13 hedge funds have received the SEBI (Securities and Exchange Bo­ard of India) approval after the regulator allowed hedge fund-like stra­tegies to launch operations in India under alternative investment fund (AIF) Category-III segment, according to a media report.
The fund houses which have received SEBI approval include Avendus India, Karvy Capital, Motilal Oswal, Ca­pveda, DSP BlackRock, Ed­elweiss and Ambit Capital, the report added.
SBI Pipe Fund is waiting for SEBI approval, the report further said.
A hedge fund is a popular product overseas. But, in India it is still at a nascent stage. Hedge funds are similar to mutual funds (MFs) in the sense of being investment vehicles which pool investors’ money. This is then invested as per the funds mandate and returns are distributed among unit holders.
However, hedge funds use strategies far more complex than a typical MF which mostly focuses on generating returns within one asset class or through simple asset allocation.
Hedge funds use various strategies such as long-short, derivatives, leverage and so on and aim to give a level of absolute return with minimum risk.

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