| Private equity player Baer Capital Partners plans to launch $ 250 million India-dedicated hedge fund by the year-end. Baer Capital is the first hedge fund to announce its India plans, after the recent proposal by the Securities and Exchange Board of India allowing direct entry of hedge funds. |
| The fund is likely to be called Beacon India Growth Fund. |
| Baer Capital will have to register as a foreign institutional investor (FII). |
| The fund will be investing in public (or listed) companies. It will be a long biased hedge fund using futures/derivatives to hedge itself against market decline. It will have more flexibility to stay in cash or take concentrated position and will be focused mainly on the mid-cap stocks across sectors. |
| "We have applied for our FII registration and we expect a minimum annual return of 25-30 per cent out of all our investments both through private equity and hedge fund. We will see more of hedge funds coming to India in the coming days and a lot of strategic activity happening in the space as hedge funds bring a lot of liquidity and efficiency into the capital markets, "said Alok Sama, president & founder, Baer Capital Partners. |
| The hedge fund will be raised from Europe (40 per cent), West Asia (30 per cent) and the balance from the US and Asia. |
| The private equity firm which entered India last year will also be launching its second $250 million open-ended Beacon India Equity fund by the middle of next year. |
| The Beacon India Private Equity Fund has closed $ 7 1/2 million investment into an art auction company and will be closing three more deals in a power transmission company ($20 million), software services space ($12 million) and will be co-investing with 2-4 more investors into a North India-based real estate developer ($100 million). |
| The private equity firm has appointed Deepak Shahdapuri on the board of the art auction company and the software services company. On the other two companies board, it has appointed Brij Singh, former senior MD at Merrill Lynch (the power transmission company) and Rajeev Thakore (the real estate developer). |
| "Our growth themes focus on consumer oriented and infrastructure services sectors. Next year, we will do an infrastructure fund which will also partly invest into real estate," Sama said. |
| Baer Capital Partners has also received couple of mandates for M&A advisory. It will also be applying for its merchant banking licence as it plans to get into ECM (Equity Capital Market) as well. |
| The shareholders of Baer Capital Partners are the Fleming Family (10 per cent), Dubai Holding (15 per cent), founders Michael Baer, Alok Sama and Brij Raj Singh (together 50 per cent) and the balance by Shuaa Capital and CQS Management, London-based leading hedge fund company. |
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