A day after Dr B K Modi group announced their foray into the private equity space with a special opportunity fund, here’s a hedge fund that is starting a fund to buy underperforming shares of Indian companies. Christened ‘Helios India Jai Ho Fund’, it is promoted by Helios Capital Management Pte.
According to a Bloomberg report, the firm plans to raise about $50 million by the end of July for its long-only fund. The corpus will be raised from institutional investors in Europe and the U.S. as well as wealthy individuals in the Middle East.
Samir Arora, founder of Singapore-based Helios Capital, told in an interview to Bloomberg, “We want to find slumdogs from the Indian equity markets who have the potential of becoming millionaires. There are many, many companies that have survived the past 18 months with dignity and we want to focus on such companies. The idea is to buy stocks in companies that do not have life threatening debt, are sure shot survivors and have become cheap on some appropriate parameters.” Arora has been investing in the Indian equities market since 1993.
With five investment professionals, Helios manages an India-focused hedge fund called the the Helios Strategic Fund that bets on rising and falling stocks. As for the mandate for the Jai Ho fund, investments will be made in stocks that have fallen at least 50% since the end of 2007.
Arora was the head of Asian emerging markets at Alliance Capital Management Holding LP, now known as AllianceBernstein Holding LP, and the chief investment officer of the U.S. money manager’s Indian mutual fund business from 1998 to 2003. He moved to Mumbai from New York in 1993 to help Alliance Capital set up its Indian mutual fund business, after the government opened its stock market to foreign investors.