Asian market fundamentals look good: Eurekahedge

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The market has been getting more shocks. In July there was the Lebanese crisis, the North Korean missile testing and unprecedented heat waves in the US and UK, and of course the big global market driver that consumers are worried about there being a slowdown in consumption and about inflation. These factors are weighing on the markets. But otherwise there are opportunities in emerging markets in Asia.

Q: Just to put India specific focus to this, what is it that you have seen by way of hedge fund activity in the past few months and even if you could set out a broad quantum of the size of these funds that might be focusing on India now?

A: We track about 25 India focused hedge funds. They have a combined Assets Under Management, AUM, of about USD 1.5 billion. What we have seen is that most of the funds are either equity focused or multi strategy funds. The equity focused ones have been doing well, not as much for the multi strategy funds. This suggests of course that this was the latent interest in India over the past 3-4 years at most. Equities have largely seen rising markets, so these funds are bound to do well.

Q: What have you seen by way of emerging markets funds as well, the point being have you seen any new hedge funds actually being launched in the past one month or so or on the flip side have you actually seen redemptions or even shut downs because of the underperformance in emerging markets?

A: June has seen a lot of redemption pressures. We cannot put a number on the July redemption amount because all the funds' performance data has not yet come in. But in June there has been about USD 1.1 billion in redemptions overall of the 25 funds that we track. For the quarter itself there have been net inflows of about 200 million. So the month of June alone took the bulk of all the inflows seen in April and May by a long margin. So June mainly has seen a lot of redemption pressures in hedge funds but we expect investors to return over the next couple of months.