Dalton Strategic plans Indian absolute return fund

London’s Dalton Strategic Partnership has hired a senior manager from the proprietary trading group that Goldman Sachs disbanded recently, to run an Indian absolute return fund launching in September.

Gaurav Pant (pictured) is joining the $2.45bn boutique’s existing Indian equity investment team, based in Mumbai. He worked at Goldman Sachs for eight years, including as executive director in the bank’s Principal Strategies group in London.

Goldman was one of many US banks that moved to wind down its inhouse trading desks in the face of America’s Dodd-Frank Act which, among other measures, curbs banks risking capital by betting for their own accounts.

Other members of Principal Strategies are understood to have found work elsewhere, or like Morgan Sze, its former head, set up independently. Hong Kong-based Sze raised more than $1bn for his Azentus Capital Management hedge fund this year.

Pierre-Henri Flamand and Ali Hedayat, also from Goldman’s trading group, also raised a large amount for their London-based hedge fund, Edoma Capital Partners.

Pant joins other esteemed alumni from Goldman, who have gone on to set up hedge funds on their own.

Frank Brosens left and worked at Taconic Capital Advisors, Thomas Steyer went to Farallon Capital Management, Eric Mindich founded Eton Park Capital Management, and Dinakar Singh established TPG-Axon Capital Management.

At Dalton, Pant will join fellow Goldman Sachs alumnus Leonard Charlton, whose popular Luxembourg domiciled long/short European Absolute Return fund was capped recently after reaching capacity.

Pant’s portfolio will seek “consistent, high levels of positive absolute returns from a portfolio of both long and short Indian equities,” according to the group.

Using bottom-up, fundamental research, it will target annual returns of between 12% and 18% by investing mainly in liquid listed equities around approximately 25 themes, and do so on less volatility than that exhibited by Indian equities.

Its net exposure will be between 10% net short to 25% net long, while average gross exposure will range from 80% to 120%.

Magnus Spence, managing partner at DSP, said: “The dispersion of returns in large, liquid Indian equities is substantial, and greater than that which is found in most other markets. This creates significant opportunities for the generation of alpha.

“The combination of a highly talented relative value investor such as Gaurav, with a market which offers an abundance of sizeable dispersion opportunities should deliver outstanding risk adjusted investment returns.”


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