An AGC spokesman told Reuters that the decision was made because of "differing views on the direction of the business", but they declined to elaborate.
AGC, which is part-owned by Wall Street investment bank Morgan Stanley, was one of Asia's hottest hedge fund start-ups when it launched in 2007 with approximately $300 million worth of assets under its management, the site said.
Mr Hsu's responsibilities will transfer to another of the fund manager's co-founders and its current president, Donald Yang.
Citing sources in the Financial Times, Reuters said Mr Hsu felt that removing himself from day-to-day operations would allow AGC to develop a clear direction.
However, he reportedly plans to stay on as a senior adviser to the firm and he remains its biggest shareholder.
AGC is involved in public and private sector investment, with particular focus on China and south-east Asia.