Steadview Capital Management, which runs an India-focused long/short equity hedge fund, is taking a selectively bullish stance in the subcontinent, which has been hit by high inflation, says founder and portfolio manager Ravi Mehta.
The Steadview Capital Master Fund seeks out listed companies with good governance, low debt levels and minimal working capital requirements, according to Mehta. It reduced its net exposure during unsustainable market peaks in late 2010 through single-stock shorts and holding significant amounts of cash, which protected the fund during the market correction in early 2011.
The strategy has proven successful, returning 13% year-to-date, net of fees. Since launch in July 2009, the fund has returned 92%, putting it among the top-performing India-focused hedge funds.
Steadview's performance has helped to attract investors, buoying its AUM to $32 million, up from $2 million at its launch in July 2010 and $7.4 million in January 2011. Family offices in the US, Europe, and Latin America account for half of the assets; the remainder stems from high-net-worth individuals – primarily hedge fund and private equity firm founders and executives.
The investor base is expected to broaden following advanced talks with funds of hedge funds, says Mehta, a former Asia equities analyst for US hedge fund Maverick Capital.
He was based in New York during Steadview's first year of operation, but moved to Hong Kong last year, drawn by the dynamic fundraising environment and proximity to India, where he often travels.
Steadview last month gained a Type 9 asset management licence from the Hong Kong Securities and Futures Commission.