Financial Express –Statements emanating from different quarters indicate that the desirability of allowing trading by hedge funds in the country is being examined. When and under what regulatory framework would the same be introduced, if at all?<\/p>\n
Hedge funds have everywhere been the cause of animated discussions. The debate has centered on the nature of these investments, as well as their role in market mishaps. The jury is still out on the role of hedge funds during times of market stress “are they perpetrators of the crime” or are they merely “quick on the draw” to maximise their profit or minimise their loss?<\/p>\n
A hedge fund is a private investment fund open only to a limited number of very high networth investors, who are charged management fees and performance fees. The management fees are typically around 2% of the assets under management. The performance fees differentiate these funds from other pooled investment schemes such as mutual\/pension funds. The performance fees characterise the investment manager\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s prowess and are normally 20% of the gross returns of the fund in a given year.<\/p>\n