Hong Kong hedge fund Torq Capital winds down as founder heads for Citadel

Hong Kong-based hedge fund Torq Capital Management is closing up shop after more than seven years of operation, with its founder and chief investment officer, Avinash Abraham, moving to Citadel, the companies said.

The market-neutral fund focusing on Asian equities was founded in 2016 by Abraham, former head of Asia for Balyasny Asset Management and a former portfolio manager at Citadel, which is among the world’s biggest and most profitable hedge funds.

Torq, seeded by Alibaba Group Holding co-founder Joe Tsai’s family office Blue Pool Capital, grew to manage more than US$1.5 billion at its peak.

“Torq has commenced an orderly wind down of its operations and will return capital to investors over the next few months,” Kendall Johnson, chief operating officer at Torq, said in a statement on Friday. Bloomberg News first reported Abraham’s departure and Torq’s planned closure.

Abraham will join Citadel’s Asia fundamental equities team as portfolio manager later this year, Citadel said in a separate statement. Citadel, founded by billionaire Ken Griffin, has tripled its headcount in Asia since 2019 to about 200 employees.

The liquidation of Torq’s flagship fund began last week and some staff are expected to join Abraham at Citadel, a source familiar with the matter said. Torq and Citadel did not respond to a request for comment on plans involving Torq staff.

The high interest rate environment has driven investors to demand double-digit returns from hedge funds, while an intensifying talent war among multi-manager hedge fund platforms has squeezed smaller funds.

“It is certainly true that talent is harder to get these days, and that there is a limited pool of talent,” said Patrick Ghali, managing partner of hedge fund advisory firm Sussex Partners.

Torq had annualised returns of around 10 per cent up to October 2021, but the subsequent two years were roughly flat, with the flagship fund gaining 1.1 per cent in 2023.

Citadel’s flagship Wellington fund rose 15.3 per cent last year, outpacing the bond markets.