Hedge funds operating in the US and other parts of the world provide a good business process outsourcing opportunity for India, given the business model of the funds shifting their assets from one market to another, experts have said.
"Hedge Funds are an off-shoring opportunity for India as products and services required by such funds can be accessed at cost effective rates from here," Marti G Subrahmanyam, professor of finance, economics and international business at New York University, said in Mumbai.
He was speaking at Federation of Chambers of Commerce and Industry's two-day annual capital market conference.
Hedge funds are pooled investment vehicles whose investment in publicly traded securities is huge as compared to average investors.
"Products and services required by Hedge Funds which can be outsourced from India include clearing and back-office support, accounting and reporting services, risk management services among others," Subrahmanyam said.
There are about 10,000 hedge funds worldwide with almost $1,500 billion capital as of December 2006 and their number has doubled in the last three years.
Prominent hedge funds with over $10 billion capital include Bridgewater, GSAM, Citadel, SAC Capital, Renaissance, DE Shaw, Vega and Tudor, Subrahmanyam said.
"Speed of execution is the key to their (hedge funds) success and they are willing to pay for the quality of this service," he added.
He said the need for outsourcing their back-office support also arises from the fact that they practice a wide range of strategies, some of them complex and in a variety of markets.
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