Implications of Hedge Funds on the Indian Capital Market

Abstract:     
In spite of tall claims that Hedge Funds have been demystified, the fact remains a big segment of the investment community is not aware of the risk return permutations that this asset class has to offer. Hedge fund is not a new terminology for those tracking Indian Capital market at least for the last 10 years. The interesting part has been the increased acceptance (even by the regulator) of their presence, in spite of the fact that they are not permitted to 'invest' in Indian markets. The impact which these funds can have on the financial stability could be substantial - but like any other coin it has positives and negatives. The Monetary Policy of 2007-08 gave a never-before opportunity to Hedge Funds- Access to the Indian HNI's and Institutional investor's share of Portfolio Pie. The paper investigates the impact of Hedge Funds on emerging Indian financial markets as well as the possible implications of marketing of hedge funds in India. The paper is an attempt to tread down the lightly traveled path named Hedge Funds.

Number of Pages in PDF File: 12

Keywords: Regulation, Financial Stability, Risk

JEL Classification: G11, G15, G23, G28

working papers series