Karvy said today that they will be launching their hedge fund soon. Hrishikesh Parandekar, CEO & Group Head (Broking, Wealth Management and Asset Management), Karvy Group said that thanks to the new norms for Alternative Investment Funds (AIF) issued by Sebi, earlier on in the year, will see many hedge funds being launched.
The AIF guidelines will regulate all private equity players, venture funds, real estate funds, and even hedge funds.
Parandekar said that the fund will constitute both equity and currency. It will follow quantitative algorithm method of investing, he said. Karvy is still in early stages of getting approvals for the the same.
Like mutual funds, hedge funds pool investors' money and invest those funds in financial instruments in an effort to make a positive return. They can invest in any asset class - stocks, bonds, commodities, real estate, private partnerships, - or exotic debt products like packaged sub-prime mortgages. They can run highly concentrated portfolios. Up until now, hedge funds have been more or less unregulated.
Sebi has fixed a higher share of continuing interest for fund managers of hedge funds when compared to those managing private equity/venture funds, infrastructure funds or those looking at the small and medium enterprises (SMEs).