Steadview, a hedge fund seeded by former Goldman Sachs (Asia) chairman Mark Schwartz, sees its assets tripling to $100 million in the next year as its strong performance is expected to draw investors, founder Ravi Mehta said.
The India focused fund has recorded a return of 92 per cent since launching in July 2009. By comparison, the country’s benchmark share index is up 24.5 per cent.
Mehta, who was an analyst at hedge fund Maverick Capital in New York and before that an investment banker at Morgan Stanley , said his India-focused long/short equity hedge fund had grown assets about five times in 2011 to $33 million.
“We are just now hitting a point where fund of funds could invest,” Hong Kong-based Mehta told Reuters in an interview.
“We are currently in later stage discussions with some fund of funds, and are receiving interest from endowments and even insurance firms.”
Schwartz, also the former chief executive of Soros Fund Management, is the biggest investor in the fund along with large family offices from the United States and Latin America and founders and executives of private equity and hedge fund firms.
Mehta, who is looking to hire one more to his team of five, said his fund was typically getting $2-3 million from each investor and might attract some investments worth more than $10 million in the next one year.
Steadview, which has benefitted from investments in stocks such as TTK Prestige , IT services firms KPIT Cummins Infosystems Ltd and eClerx Services Ltd , maintains a concentrated portfolio.
The fund uses no leverage and typically invests in 12-15 high conviction ideas, Mehta said.
“Be concentrated, use no leverage and be really deep in your research is the key,” he added.
Mehta’s Steadview Capital Master Fund, which started with$500,000 and managed just about $1.8 million last July, was ranked the best performing Asian equity including Japan hedge fund for its 38.55 per cent return in the year ending June, according to data from industry tracker AsiaHedge.
It has returned 12.9 per cent this year, as of the end of July. By comparison, India’s benchmark share index has lost 10.8 per cent.