Global hedge funds are boosting their presence in the long-shunned Indian market

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Global hedge funds are making a beeline to set up shop in India, a market long-shunned by international investors, tempted both by its growing depth and liquidity and its emergence as an alternative to investing in China.

Singapore-based multi-strategy hedge fund Dymon Asia Capital and Citadel Securities are among funds and securities brokers entering a market they had smaller exposure to in the past, worried about tax issues and their ability to hedge investments through short-selling.

“But in the last 12 to 24 months, India has become more and more of a significant contributor in terms of returns and risk-taking in the overall portfolio." Prashant Kothari, senior investment manager at Pictet Asset Management, points to how Indian stocks have received foreign inflows of around $6 billion so far this year, representing more than half the total net inflows into global stocks.Sachin Kewalramani, portfolio manager and head of Asia fundamental equities at hedge fund Citadel, said the firm was looking to hire more investment professionals and engineers from India for its international equities team.

Yak said they were in the process of opening an office in Bangalore overseen by an Indian native cofounder.

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