India-focused hedge funds lose over 25 per cent in 2008

Hedge funds, known to be the most seasoned investors across the world markets, have lost considerable ground in the year so far with India-focused funds losing over 25 per cent on the back of global economic uncertainties, a recent report said. Hedge funds are pooled investment vehicles whose investment in publicly-traded securities is huge as compared to average investors. As per data compiled by international fund tracking firm HedgeFund.net (HFN), the Indian average was down by 25.08 per cent so far this year. This decline was even sharper then China, Russia and Brazil who witnessed a decline of 13.67 per cent, 4.35 per cent and 4.81 per cent respectively.

“Increased volatility surrounding the ultimate failure of investment banking giant Bear Stearns and the ensuing US Treasury actions defined a difficult month (March),” HedgeFund.net said. The downtrend was across the board with majority of hedge funds posting a decline. Among the other averages, the HFN Asia average declined 8.40 per cent while the global average was down 1.91 per cent and HFN European average was 3.71 per cent so far this year, as per the real estimates till April 18 released by the HedgeFund.net.

HFN Hedge Fund Aggregate Average, an equal weighted benchmark of all single manager hedge funds and managed futures products in the HedgeFund.net database, was down 1.35 per cent in March this year, its first negative Q1. “Emerging markets experienced a sell-off in March led by funds investing in China, India and the West Asian/North Africa region, which was hurt by funds investing in Turkey,” HedgeFund.net added.

The HFN Emerging Markets Average was down 2.36 per cent in March and negative 4.27 per cent in the first quarter this year. HFN’s regional and country-specific benchmarks show funds investing in India dipped by 12.52 per cent in March and a negative 25.49 per cent in Q1, while those investing in China were negative 6.13 per cent in March and down 13.28 per cent in the first quarter, HedgeFund.net said.