Swiss private bank, Julius Baer, has teamed up with Singapore-based fund managers, Abhijit Raha and Tarun Gandhi, to launch a multi-strategy Indian hedge fund off its platform.
The Julius Baer Multi Opportunities India Millennium Fund launched with between $10 and $20 million under management, raised largely from private investors. The fund aims to generate an annual return of 15%, while also placing an emphasis on controlling volatility. In the current market context, Raha says he expects the fund to have a capacity of about $200 million.
The fund, which has a minimum investment of $100,000, is expected to attract a diverse range of investors, including high net-worth individuals through Julius Baer's private banking channels as well as institutional investors through introductions made by the fund's prime broker, UBS. Raha points out that the fund's multi-strategy approach to trading India distinguishes it from most of its Indian hedge fund peers, a number of which have begun to spring up over the past twelve months.
"There are not many teams that have the expertise to run a multi-strategy approach to trading India, since most India-focused fund managers tend to come from long-only equity-focused backgrounds. Our team has both the experience and the expertise in place to run a multi-strategy portfolio," says Raha.
Prior to setting up the new fund, Raha was at CLSA where he was responsible for establishing the firm's brokerage business in India and ran its operations there for six years. He later shifted to Singapore and became executive director for CLSA's brokerage in South East Asia. Raha points out that his experience in setting up a business and familiarity with investment products and operations is complemented by Gandhi's absolute return portfolio management experience.
For the last decade Gandhi worked with Cargill's hedge fund, where he created the group's India portfolio, which he ran till 1997. He later moved to head up the firm's Asia trading desk in Singapore, gaining experience trading money market instruments, foreign exchange and interest rates. Gandhi left Cargill's Singapore-based hedge fund operations in 2004 as a managing director and portfolio manager.
The group also draws on the talents and stock picking skills of an advisor based in Mumbai who was formerly CIO of Kotak's Indian mutual fund. Prior to this he was managing money for private clients through an absolute return investment style. Raha adds, "Our multi-strategy approach allows us invest in a variety of asset classes which further enables us to control volatility,"
However, he notes that under India's current the FII (Foreign Institutional Investor) licensing regime, only 30% of the fund's portfolio is permitted to be in non-equity products. "As the Indian market continues to develop the fund will be well placed to exploit new opportunities," he says.
In addition, Raha points out that the fund has a dedicated risk manager, and has stop loss and exposure limits in place. The fund's risk management is also monitored by Julius Baer.