Parag Patel, a former telecommunications analyst with hedge fund SAC Capital, last October launched the Indian Performance Fund, an equity long/short vehicle with a long-bias, with US$4 million. To date, the fund has returned 5% and is managing some US$5 million in assets.
Patel said he’s looking for deeply undervalued stocks in the smaller Indian companies because of its inefficiency. “I see more opportunities in small- and mid-cap stocks overseas than I do in the U.S. because it’s just a more inefficient market,” he said.
Some of Patel’s current core holdings include Panyam Cements and Mineral Industries, a cement manufacturing company located in Southern India. “Its shares are trading at less than 40% of replacement cost and the company has hired investment bankers to sell itself,” said Patel.
The fund is also investing in the IT services, food processing, manufacturing businesses, and media sectors. Patel currently employs an Indian national based in Chennai, India, as an analyst and plans to hire another analyst based in the same office this year.
Patel’s offering charges 1.5% for management and 20% for performance, with a US$500,000 minimum investment requirement.