Citadel, Amaranth in talks for energy trades
The meltdown in assets of Amaranth Advisors has raised doubts over the 42.5% stake of its sister concern, Amaprop, in Indiabulls Finance Company (IFC).
By TNN |
MUMBAI: The meltdown in assets of Amaranth Advisors has raised doubts over the 42.5% stake of its sister concern, Amaprop, in Indiabulls Finance Company (IFC).
Fidelity and Merrill Lynch have hiked their stakes in Indiabulls Financial Services to 10.4% and 8.9%, respectively. Goldman Sachs and Citigroup have also been acquiring shares of the company. Their holding stands at 4.5% and 3%, respectively.
There have been reports about Citadel Investment Group, the Chicago-based $12bn hedge fund, initiating talks with Amaranth to take over some energy trades from the latter.
Amaranth has taken a big hit on account of hyper volatility in natural gas prices with its assets under management plunging to $4.6bn in the current month from $9.2bn. Amaranth, on Monday, said that two of its main funds fell 50% in the current month.
The Amaranth fiasco will make the market more wary of risk elements involved in investment routed through hedge funds, say brokers.
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“With the development, the risk in hedge fund industry will be more apparent. Efforts will be taken to monitor and regulate the role of hedge funds in the stock market. Indian companies investing in hedge funds may come under scrutiny,” said Ved Prakash Chaturvedi, CEO, Tata Asset Management.Start a SIP with as low as ₹500 with ET Money App!
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