New delhi, April 08, 2015: Last month, the Reserve Bank of India (RBI) enhanced the limit for investments overseas under the Liberalised Remittance Scheme, where all Indian resident individuals, including minors, are allowed to freely remit up to USD 250,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. For the sake of history, the RBI had announced a Liberalised Remittance Scheme (the Scheme) in February 2004 as a step towards further simplification and liberalization of the foreign exchange facilities available to resident Indians. The RBI had in August 2013 reduced the ceiling from US$ 200,000 to US$ 75,000 per person in a financial year under the LRS in view of the worsening current account deficit and a volatile rupee. Commenting on the enhancement of the limits under the LRS, Kapil Khandelwal, Director EquNev Capital, a leading investment banking and financial advisory company based out of Bangalore, “We welcome this signaling of the strong sentiment by the RBI on foreign exchange reserves of the country and freedom to the Indians to invest abroad to broad base their investment portfolio and also diversify their risks in investing into asset classes abroad. After months of discussions with the Finance Ministry and RBI, we are glad that our efforts and requests to enhance the LRS limits have yielded results”
Earlier this month, EquNev Capital has launched the distribution of K1T Capital is a systematic quant based hedge fund to the Indian investors to leverage the enhanced limits under the LRS 2015. K1T Capital has developed proprietary algorithms that are designed to capitalise on the volatility of U.S Equity markets specifically the S&P 500 and S&P 400 on the NYSE (New York Stock Exchange) and invests in the NYSE directly taking positions once daily. Adds Kapil Khandelwal, who is also Advisory Board Member of K1T Capital, the asset management company for the K1T Capital Hedge Fund, “the investments in this fund complies with all the requirements for investment by a resident Indian individual investor under the Liberalised Remittance Scheme, 2015 provided the individual complies with all the KYC and anti-money laundering norms set by the RBI.”
K1T Capital has back tested its proprietary algorithms on the S&P 500 and S&P 400 of NYSE. Of the 68 quarters, since 1998, in the back test there were only 2 quarters giving negative returns to the investos. 97% of quarters were positive. On the historical hypothetical testing the fund has shown returns annual average 37.9% pa. Commenting on the past and future performance of the proprietary trading system deployed by the K1T Capital, Simon Wajcenberg, CEO, K1T Capital, “while past performance is no barometer of the future performance of the fund, the S&P 500 is now turning into an exciting phase of volatility in the next few quarters as was witnessed between 1998-2003 and 2008-2012, as signaled by the proprietary algorithms of the trading system of K1T Capital.”
K1T Capital has appointed some of the leading professional services companies to manage and advise the fund. These include: Apex Fund Service, as the fund administrators; Deloitte as the auditors; Binghams as the legal advisors; Interactive Brokers and Linear Investments as the prime brokers. For the international investors, including Indian investors, K1T Capital has set up a feeder fund based out of Cayman Island that invests into U.S equities markets through the trading system set up by K1T Capital Fund.
Commenting on the target investors for the K1T Capital Fund from India under the LRS 2015, Kapil Khandelwal adds, “apart from the family offices and high net worth individuals (HNIs) who want to diversify their investment portfolio and also hedge against the falling rupee, this fund offers a systematic investment discipline for those who would like to send their kids abroad for higher studies. Currently over 250,000 kids go abroad every year for grad and under grad studies. Parents of these kids need to systematically shell out around US$ 150,000 to 250,000 for their studies. The K1T Capital Fund offers a great opportunity to save and invest abroad for the parents who have such ambitions for their children.”
K1T Capital is already live and trading on the U.S equities markets. Its investment strategy is fully hedged, with no directional risk (would be unaffected by a crash).
CCI Newswire
