Hindu Business Line- India-focused hedge funds have lost a jaw-dropping 26.6 per cent till date in 2008, after clocking returns of nearly 52 per cent last year.
Hedge funds are believed to be able to generate positive returns, even when the stock markets fall as they use a host of strategies such as short selling, market timing and arbitrage to take advantage of every blip in the market.
The loss suffered by these India-centric funds led by little-known ‘hedgies’ (hedge fund managers), dwarfs the losses made by similar country-specific funds in China (negative 13.7 per cent), Russia (negative 4.6 per cent), Brazil (negative 4.2 per cent), real-time estimates captured from hedge fund tracking firm HedgeFund.net (HFN) show.
The developments are in line with the difficult period faced by funds such as Monsoon Capital, a $1.2 billion hedge fund firm, which lost over 40 per cent till March 20. Hedge fund managers earn fat fees, sometimes as high as 20 per cent, for earning high returns.
