D E Shaw, the world's second-largest hedge fund, is entering India. The New York-based fund, often described as 'the most intriguing and mysterious force on Wall Street', will set up its operations in June.
According to a US hedge fund industry publication Absolute Return, in 2005, Westport-based Bridgewater Associates topped the list of hedge funds with $17.7 billion in assets, followed by DE Shaw with $17.1 billion.
DE Shaw has roped in Anil Chawla, chief executive officer -- commercial finance, India & South East Asia, GE. Chawla will join the fund in June as the country head. He will be responsible for setting up offices and recruiting people.
Chawla had joined as an assistant vice-president in GE Capital in April 1996. He was promoted as chief executive officer -- commercial finance, India in 1999.
Then he became chief executive officer -- commercial finance, India & South East Asia, in March 2003. He heads the corporate growth team, which GE set up last year to triple revenues in India in 3 years to $3 billion by 2008.
The D E Shaw group is a specialised investment and technology development firm. Its activities range from computer-based quantitative investment management to the development and financing of technology-oriented business ventures.
Since its reorganisation in 1988, the firm has earned an international reputation for financial innovation and technological leadership. It will invest in private equity as well as distressed assets in India.
However, the initial kitty of the fund is not known. Industry sources said DE Shaw would be the largest hedge fund in the country, which had recently witnessed a flurry of activities by hedge funds.
Broker-dealer activities of the D E Shaw group are conducted in the US through D E Shaw Securities, D E Shaw Investments, or D E Shaw Valence, which are registered as broker-dealers with the US Securities and Exchange Commission and are members of the National Association of Securities Dealers.
Investment advisory activities are conducted through D E Shaw & Co and D E Shaw & Co, L LC. Technology venture activities are conducted through D E Shaw Research, LLC.
Unlike mutual funds, which rely on a 'buy and hold' strategy, hedge funds move in and out of markets in anticipation of changes and market imperfections, hoping to take advantage of the opportunities.
One of the pluses of hedge funds is that they provide a lot of liquidity to the market, and enhance price discovery at bourses. While their operations do result in unlocking the potential value of stocks, it is normally only in the short term.
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