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India Focussed Hedge Fund Down 22% in 2008, Suffer Huge Losses

20 August, 2008

A hammered Indian stock market and upcoming concerns about higher oil prices, inflation and political turmoil doom the Indian hedge fund industry.’s $100 million Special Situations Fund, a $100 million long-short hedge fund focused only onIndia is down 22.25% in the first half, Reuters reports.

Vik Mehrotra, CEO and founder of Venus Capital Thomson Investment Management News in an interview that he expects Indian markets to fall another 10 percent to 20 percent or more this year, which would claim casualties among the 120 or so dedicatedIndia hedge funds, which he said collectively have about $6 billion under management.

Mehrotra added that there’s a lot more pain to come in India’s hedge fund industry and that many will go out of business. “The whole hedge fund industry is going through a process of deleveraging”, he said.

Venus Capital founded in 1994 and has about $550 million under management across three funds and claims itself as the oldest India-focused hedge fund group. The Boston based India focused hedge fund picked up a 5 percent stake for about $2.5m in India’s leading art house, Osian.

Mehrotra’s Special Situations Fund’s largest allocation is to the energy sector and its biggest holding is Reliance Industries Ltd. He is particularly upbeat about Reliance, which is gearing up to open a new pipeline this year and predicts the stock will double in the next two years.


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India Focussed Hedge Fund Down 22% in 2008, Suffer Huge Losses

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