I have a question for a long time. why does the USA have all these Investment banks like Goldman Sachs and Blackrock or some big hedge fund? and India don’t have any of this. today we all cherish the success stories of Silicon Valley companies but all these companies were built because of this financial institution. They back this tech company very early on. Today India wants to be the same strong place as Silicon Valley, but we are only focusing on the Tech part, not the financial side. Building and running a tech company is tough because it requires money and we don’t have that much money In India. So we are completely dependent on the USA and other foreign counties.
There are quite a few reasons, but Hedge funds aren’t like MF, they can equally have long and short positions.
MFs get a lot of tax breaks being buy+hold type vehicles for local investors. (Even moving positions i believe isn’t capital gains etc)
Firstly, shorting here is relatively cumbersome.
Next, Hedge funds would be treated like corporates, and they’d have to pay 30%+ on profits etc and the whole Indian taxation would apply.
So from what i understood long back, its not like they don’t exist but its not viable.
And if they have a system that works, why will they take the pain of running it here when same thing can be done elsewhere.
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I doubt that there’s something as AIF Category 3 So Hedge Funds would most likely come under this but again it’s rather cumbersome to set it up in India
So yeah I agree to this part