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Groups move to launch India-focused absolute return funds

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In separate moves, US, UK and India-based investment groups unveiled plans to launch India-focused absolute return funds this week.

New York-based Fulcrum Investment

In separate moves, US, UK and India-based investment groups unveiled plans to launch India-focused absolute return funds this week.

New York-based Fulcrum Investment Group. LLC revealed it has entered into an agreement with Dawnay Day AV Financial Services Pvt. Ltd. (India) to launch a new India-focused, multi-strategy fund to be named the Fulcrum DDAV India Opportunity Fund (“the Fund”). The Fund’s investment objective is to achieve high absolute risk-adjusted rates of return through a multi-strategy approach.

The Fund will be advised by Dawnay Day AV Financial Services Pvt. Ltd (DDAV) which is based locally in Mumbai, India. DDAV is a joint venture between Alok Vajpeyi and the Dawnay, Day Group (UK). DDAV’s well-established investment team is led by Vajpeyi and Nitin Raheja, who together bring a long history of success and expertise in Indian market investing to the Fund.

Vajpeyi was formerly President of DSP Merrill Lynch Asset Management in India, subsequent to which he formed AV Financial which was recently renamed Dawnay Day AV Financial Services after a joint venture with the U.K. based financial services and property investment company Dawnay, Day Group. Vajpeyi is considered as one of the leading figures in the investment community in India. Raheja was formerly the equity portfolio manager for Sun F&C, one of India’s largest mutual fund companies and has a stellar track record. Vajpeyi and Raheja each have over 15 years of investment experience in the Indian markets.

In addition, the Fund has tapped Ravi Jain, formerly CEO of EGAR Technology and to provide risk oversight. DDAV will be supported by their research arm, DDAV Analytics Pvt. Ltd, which has an experienced team of research analysts led by Paresh Sharma, a leading figure in Indian equity research.

Fulcrum has been laying its foundation in India for over two years. John Morris, Managing Member of Fulcrum, said: “In this venture, we have been able to successfully bring together some of the best talent with respect to Indian market investment expertise, experience and track record. Alok and Nitin are among the most highly regarded investment professionals in India and we are proud to have them as our advisors. India has been one of the strongest growing markets recently.”

Morris added: “However, we are just at the beginning of a potentially long economic growth and expansion cycle in India. The growth and economic reforms provide tremendous investment opportunities. The Fund will be well positioned to take advantage of these opportunities through its multi-strategy approach and its focus on risk management.”

The multi-strategy fund will be comprised of (i) directional value and growth investments (ii) long/short (market neutral) equity investments (iii) arbitrage investments including merger arbitrage and index arbitrage, and, (iv) longer term private-equity-like investments in emerging companies. The Fund will primarily invest in publicly listed companies with a mix of large cap, mid cap and emerging companies that are well poised to benefit from the high growth in India as well as the building of infrastructure within the country.

Ravi Jain said: “Successful investing in India requires a lot more than analysis of balance sheets and charts. It requires constant contact with the markets and companies. Alok and Nitin’s reputation and stature in the market, gives them access to the senior management of hundreds of companies, with whom they constantly meet and have followed for years. This gives them an unparalleled level of market intelligence on which to base investment decisions”.

The Fund will utilize local knowledge and tested information networks in its decision making. Through a multi-strategy approach, it will focus on fundamentals of the economy, business sectors and companies and seek investment themes resulting from India’s development and reform policies. It will seek to exploit arbitrage opportunities in both the stock and derivatives markets.

The Fund is expected to formally launch in January. The investment criteria and other details of the fund will be announced shortly.

Fulcrum Investment Group, LLC is a New York City-based integrated alternative investment firm with global reach. Fulcrum specializes in strategic marketing, innovative product development, tailored client servicing and reporting, and business risk consulting. The firm provides a traditional investment management platform that allows managers to focus on their comparative advantage, managing portfolios. Fulcrum is committed to providing the highest level of service while affording managers access to a globally diversified spectrum of investors. Fulcrum has offices in New York and Hong Kong.

Dawnay Day AV Financial Services Pvt. Ltd is a joint venture between Alok Vajpeyi and Dawnay, Day International (U.K.). DDAV is an India-based financial services and investment advisory firm that provided highly customer focused solutions for individual and institutional clients in India and abroad.

EM Capital Management, LLC and Kotak Mahindra Investment to co-advise the EM Capital India Discovery Fund

The second launch is from EM Capital Management, LLC, which this week unveiled the formation of the EM Capital India Discovery Fund co-advised by Kotak Mahindra Investments, India’s largest securities firm.

The fund is an absolute return fund with a value, long-bias and unique approach integrating both quantitative fundamental valuation and private equity methodology, focused on small to mid-cap firms listed on Indian exchanges and global India- focused firms. A portion of capital may be invested in promising unlisted companies.

Robert Bell, CFA is Chief Investment Officer, formerly Director of Global Investment Implementation at AXA Rosenberg, the USD 70 billion equities manager.

Dhruba Gupta, formerly Deputy Treasurer of the International Monetary Fund is Managing Director of EM Capital Management’s New Delhi office. Seth R. Freeman, founder of EM Capital, Inc., the emerging markets advisor is CEO based in Orinda, California.

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