The rupee's appreciation against the dollar has claimed its first victim in the business process outsourcing space.

US-based Spectrum Global Fund Administration, providing back-office operations to hedge funds in the US and the UK, is closing its facilities in India. The company had started its operations in India two years ago.

The company, which is based in Bangalore, has close to 100 employees. The centre serves about 60-70 clients of the total 110 in the hedge fund sector. The company plans to close the centre by December-end.

"The decision has been taken by the US office. We have not been told about the procedures. Negotiations as to what happens to the people working here is yet to be conveyed by the head office," said a source close to the development.

The company has cited reasons such as increasing attrition and rising costs for closing its Indian operations.

When contacted, the Indian spokesperson said that negotiations were on and the situation would be clear only in the next few days.

However, the concern among its Indian employees was that none of the team members were taken into confidence before taking this decision. Moreover, all the login IDs and email passwords have been deactivated.

"We are ready to help the company for a smooth transformation of the operations to the US site. But we need to know what the company proposes for us," said a source. The company plans to shift its offices in Chicago and Ohio.

Spectrum has around $33 billion in assets under administration, representing 110 hedge fund and fund of funds clients.

Forrester Research, in a recent report, had mentioned that more than 60 per cent captive centres in India were struggling.

Sudin Apte, senior analyst and country head (India), Forrester Research, said, "In the past two years, more than 300 North American and European companies started their own offshore set-up to lower the cost of product development or back-office operations. But we clearly see over 60 per cent of them struggling due to spiralling costs, rising attrition, lack of integration and management support."

In the recent past, there have been news of various captive centres put on the block, the most prominent being the Citigroup's BPO arm.