Redemptions have motivated HSBC to shutter an India-focused hedge fund run by Sanjiv Duggal.
The India Alpha fund, launched in 2007, peaked asset-wise in 2008 at over $300 million. It was down to $85 million by December, reports Reuters.
And yet, the fund gained 26% in performance terms last year, compared to an average 10.3% gain for emerging markets hedge funds (and much lower gains by the hedge fund industry generally). Since inception—and despite down years like 2008, when it lost 26%—it is up 39%.
An HSBC spokesman told the news agency that Duggal and his team remain with the firm where they run Indian equity assets of $6 billion, including the flagship $3.8 billion HSBC GIF Indian Equity fund.
According to HSBC, the decision to close the fund was based on an analysis of assets under management, profitability, sales interest, commitment and scalability.
"The HSBC India Alpha fund was reviewed in light of this to determine the extent to which the fund is aligned with the broader business strategy and it was concluded we would close the fund as it did not meet our criteria going forward,” the spokesman told Reuters.