India-focused hedge funds delivered a yearly return of 53% as on July 2007 while the sensex returns was 44%.According to Hedge Funds Net which tracks the hedge fund flows across the world, the current assets of hedge funds investing in India are to the tune of approximately $14 billion. In just 2 years the assets have multiplied 5 fold from $2.8 billion to $ 14 billion.

Anectodal evidence points to the fact that during 2005 and 2006 these funds trailed behind the sensex returns while the trend has reversed this year thanks largely to rupee appreciation to the tune of 8%..

While the debate on hedge funds investing through P -Notes rages, there is a new breed of funds that is all set to reach our shores – Yes ..the Soverign Wealth Funds or Government owned Reserve Funds.. Some of the well known investments of Soverign Wealth Funds are China’s investments in BlackStone Group LP – one of the largest private equity firms in the world , Qatar Royal Family’s Investment in J Sainsbury of U.K.

The total assets managed by all hedge funds put together is estimated to be in the region of $1.3trillion while the Soverign Wealth Funds currently manage in excess of $ 3 trillion!