A PE of huge size invested in an Indian stock (during bull run) and that made many small investors invest. The stock has now collapsed. Now where is the fault : PE fund or the small investor ? Think.
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The Name is not relevant , be it OE fund or the stock. The PE fund is headquartered abroad and has 100 billion $ AUM. This investment would be not even 0.01 % of their AUM !
Now consider our LIC. AUM of over 400 billion USD and 70% of it in debt (to Guvts). Now they invest some 2 billion $ in IDBI bank to help owner (Guvt) do investors go and buy IDBI bank next day ? No, we condemn LIC !
Why not same for PE funds and their India bets ?
Why not same for PE funds and their India bets ?
PE funds are lightly or little regulated. Owned by we never know. They may have zillion reasons to invest in some X or Y and the reasons may not be it's intrinsic worth. As a retail investor, copying PE or big FII is like asking barber whether you need a haircut !
Just to add here : Am not trying to say all FIIs and DIIs and PEs mismanage AUM. Far from it. They do make returns respectable enough to make notice .
But part of that exercise is to make some mistakes here and there. Key is they make smallish bets on mistakes !
But part of that exercise is to make some mistakes here and there. Key is they make smallish bets on mistakes !
