HSBC Halbis plans India mid-cap hedge fund

By Laurence Fletcher

LONDON (Reuters) - HSBC Halbis Capital Management told Reuters on Monday that it plans to launch a long-short India mid-cap hedge fund because it sees good opportunities there and that it wants to launch more emerging market funds.

Speaking at the Reuters Hedge Fund & Private Equity Summit in London, Bill Maldonado, head of alternative investments at HSBC Halbis, said the firm is looking to separate out an India mid-cap portfolio of up to $400 million from its main India market neutral fund.

"The fund managers there now do see a lot of opportunities in the mid-cap area and they would love to do a mid-cap fund, and we're looking very seriously at doing that," Maldonado said.

"We'd like to separate it from our main hedge fund. If we see opportunities we'll put those into a different product so people know exactly what they're getting."

Such a launch could take advantage of recent falls in India's stock market. Over the past three months, for example, the BSE Mid-Cap is down 36.9 percent and is on a price/earnings ratio of 11.3 times forecast earnings, compared with 15.5 times for the benchmark Sensex .BSESN.

Maldonado said the mid-cap fund product would probably have to have investor lock-ups and very different liquidity terms to the main India fund.

The new portfolio would be $400 million or less in size and would be launched in the third quarter of the year, he said.

Maldonado also said the group wants to launch further emerging market-focused hedge funds to take advantage of these economies' growing global significance.  Continued...