INVESTMENT STRATEGIES

With a team of professionals specialized in investing in India, Monsoon Capital employs a full spectrum of investment strategies that cater to our clients' needs. Currently, the team employs the following set of strategies:

Monsoon India Dynamic Alpha Strategy (MIDAS)

MIDAS is a fundamental long/short equity strategy. This strategy combines a fundamental long-only stock selection process, where 30-35 stocks are selected based on fundamental factors, with an active dynamic hedging model, which is implemented via a combination of equity hedging and currency hedging models. The advantage of this approach is that the hedging models typically remain out of the market when there are strong equity and/or currency up-trends while quickly hedging in down-moves and periods of higher equity and/or currency volatility. This dynamic approach enables MIDAS to hold higher net exposures in bull markets to take advantage of market beta, while holding lower net exposures in bear markets as the strategy becomes long/short and currency-hedged in sideways and declining markets.

Monsoon India Nifty Futures Strategy (MINF)

MINF is a systematic CTA strategy. This strategy utilizes a mix of short-term, price-based trend following, momentum and pattern recognition strategies to trade the Nifty Index futures. This is a fully quantitative, systematic and disciplined strategy that uses a combination of 17 non-correlated models weighted using a proprietary capital allocation algorithm which results in more effective risk management. MINF is expected to generate strong returns in up-trending as well as down-trending equity markets, particularly when momentum and volatility are high, while generating losses in range-bound markets, particularly when markets are choppy within a tight range.

Monsoon USD/INR Dynamic Currency Hedging Strategy (FX)

Monsoon USD/INR Dynamic Currency Hedging is a systematic currency overlay strategy. This strategy utilizes a mix of short-term momentum, medium-term momentum, price breakout and volatility breakout strategies to short USD/INR futures. This strategy is ideally suited as overlay risk management for foreign investors who are long INR and short USD due to their underlying India investments (in public equity, private equity, real estate, infrastructure and fixed income) and for domestic Indian companies who are net importers or hold USD-linked loans.

Monsoon Infrastructure Realty Co-Invest (MIRC)

MIRC is an India-focused closed-end real estate fund that invests primarily in early stage mid-market residential housing projects where Monsoon believes that demand for mid-income housing significantly outstrips the available supply of high-quality buildings. The fund is fully invested in eight equity projects and two non-convertible debenture (NCD) investments with a primary focus on emerging suburbs of the eight largest metropolitan cities in India where we believe demand is particularly strong and sustainable. The fund was closed in February 2008 and is currently harvesting its investments. We plan to launch a second MIRC fund in 2017-18.