Hello Janardhan,The LLP structure will benefit hed...

2008-11-11T12:25:00.000+05:30

Hello Janardhan,

The LLP structure will benefit hedge funds (as opposed to mutual funds or portfolio managers registered with SEBI). Currently, under SEBI guidelines, there is no way for an asset manager to run a short-bias fund, leveraged fund etc..
For example, if an investor believed in Jan 2008 that the markets will collapse the only professional advise he had access to were brokerage research analysts. There is a conflict of interest there since brokerages earn revenues from higher client trading volumes rather than the client making money. An asset management firm, on the other hand, prospers only if the clients prosper. There are several other strategies which cannot be made available in India under the current regulatory structure (however India focussed funds based outside of India can offer these).

With the LLP structure, fund managers can float a LLP for each strategy and the clients can become partners and the fund manager can be paid his fees directly by the LLP depending on the scheme's performance. The limitation here is that this structure will probably not be feasible for a large number of clients (and for small investors).

Hi Varun,Was a little confused on how LLP would be...

2008-11-11T11:48:00.000+05:30

Hi Varun,

Was a little confused on how LLP would benefit funds - could you elaborate on this??

The article on Bear Sterns collapse in Bloomberg was interesting.

Regards,
Janardhan
bjan.rao@gmail.com (johnbelpu@blogspot.com)

Comments on Varun Khandelwal's blog: Limited Liability Parternship to come to India !

Hello Janardhan,The LLP structure will benefit hed...

Hi Varun,Was a little confused on how LLP would be...