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.
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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
Same query aroused in my mind too a long before.
Reason I thought is that here in India, instead of real Buisness almost 50% of time and mind goes with dealing corruption and taxation.
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USA economic is built because of wall street, PE and hedge funds. Idk why India government is not doing anything to make easy to open more financial institutions like this. All this big tech companies where build because usa has a strong financial power. In India we all are focusing on building tech company’s but getting failed because building a tech company is very costly and request good amount of fund to run and sustain. We are getting completely dependent on VC and privet equity company’s of USA like Tiger global, Accel. I really think India needs its own strong Investment banks.
If my Idea is wrong or If I might thinking this in wrong way. Let me know. I am a tech founder. This is what I understood as I am still trying to raise funds for my startup and still unable to raise because of the current funding winter, wars and recession in US economy.
We dont have money printer like them. No other Govt can afford the kind of bailouts that the likes of Goldman Sachs that you mentioned.
The flipside is very reckless behaviour by them (these financial institutions).
Only the US can have a $34T and rising govt debt.
Every big country is build by taking debts. Look at China. That county took a debt of 18T as much as I know.
you are going off topic, sorry I cant indulge.
The state of China markets and restrictions there are at a different level.
We can’t selective choose examples. By same logic, see what happened with Japan and their Debt story.