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Komfie Manalo, Opalesque Asia:

India-focused hedge funds are now more cautious before investing and have hired the services of specialized firms, including investigators, to provide an assurance on the money they are investing.

According to a report by India Times, some hedge funds hired analysts to dig deep into the background and specific details of several listed firms they want to invest in and to determine if the company has any so-called skeletons in the closet.

Some are even hiring forensic accounting to provide additional digging. "The background checks on listed firms are done to take a long, or short, call on that company. The use of forensic accounting by hedge funds is increasing as they do not want to go wrong on their initial bets on the Indian stock market," said Ramesh K Vaidyanathan, managing partner, Advaya Legal, a boutique law firm based in Mumbai.

According to the report, this cautious trend among Indian hedge funds is also caused by pressure to sustain growth by not just relying on public information readily available on the Internet.

Indeed, India-focused hedge funds must guard their performance as they are amongst ......................

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