Auroville fund may rise on stock bets since debut

Auroville Investment Management’s global stock hedge fund rose more than 10% in its first 4½ months of trading after profiting from smaller, lesser-known stocks, said a person with knowledge of the matter.

The Asia-focused fund, run by Amar Anand, was bolstered by picks including Chinese pharma company Wuxi Biologics Cayman Inc, e-commerce platform provider Baozun Inc and India’s Yes Bank Ltd, said the person, who asked not to be identified because the details haven’t been publicly disclosed.

The MSCI World Index gained just under 6% in the same period through Sept 22.

Anand founded Hong Kongbased Auroville, which started trading with prime brokers on April 28, after leaving Eashwar Krishnan’s Tybourne Capital Management, where he had been a managing director.

Auroville picks stocks primarily using fundamental research, aided by quantitative analyses and quarterly reviews of macro-economic factors.

“May was a tricky launch vintage, given the strong run the markets had already seen year to date, with very low volatility and elevated risk of a market correction,” Anand wrote in a letter to investors recapping the first quarter of trading through July. “We had to be skillful in deploying our portfolios.”

This year, rallies posted by technology giants such as Facebook Inc have helped put hedge funds on track for their best annual return since 2013, according to data from Singaporebased Eurekahedge Pte Ltd.

Unlike many peers, Auroville focuses on medium-sized companies betting that they can enjoy longer periods of high growth, according to the investor letter.

Pavithra Srinivasan, Auroville’s chief financial officer, did not reply to an email seeking comment.