Indian hedge fund Avendus Capital hoards cash as market sell-off rumbles on

Indian hundred rupee notes rolled in a bundle. Photo: Rupixen/Unsplash

India’s largest equity hedge fund manager is hoarding cash as it’s too early to call the bottom to a free fall in the nation’s equity market triggered by global risk-off and local financing woes.

Avendus Capital Public Markets Alternate Strategies LLP has been unwinding its investments to raise cash holdings to the “highest in several years,” Vaibhav Sanghavi, who helps oversee the firm’s funds as co-chief executive officer, said by phone. He declined to disclose the ratio of assets under management kept as cash.

The central bank’s seizure of beleaguered Yes Bank Ltd. last week intensified the risk-off mood fueled by the spread of novel coronavirus cases across the globe. S&P BSE Sensex, the nation’s benchmark equity index, fell the most since August 2015 on Monday, while a measure of volatility in local stocks surged to its highest level in more than five years, data compiled by Bloomberg show.

“The sharp market fall is more in anticipation of global demand being impacted by the coronavirus outbreak. Where does it settle? It will start stabilizing once we see the peak of the epidemic cycle followed by tapering of infected cases,” Sanghavi said.

The alternate strategies business at Avendus manages more than 66 billion rupees ($894 million) under two of its funds, of which the three-year-old Avendus Absolute Return Fund is the nation’s largest by assets under management.

“The risk-reward ratio doesn’t warrant a sell yet, and we would look for opportunities to buy. But the immediate volatility has led us to go into cash,” Sanghavi said.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.