The Asset – With only 40 to 50 hedge funds, India’s hedge fund market is still at a nascent stage of development. Most of these funds are in equity, investing more long-only than long/short. The others concentrate either on the mid-cap space (where they employ value-investing strategies with little, if any, hedging), on private equity investments, or on companies at the pre-initial public offering stage.
The principal challenge for the development of the hedge fund industry in India is that the markets are strictly regulated. For example, an overseas fund manager has to be registered as a foreign institutional investor to be able to invest in the Indian markets.
