You have to handle GridViewGroupRow loaded event to accomplish this behavior of the RadGridView control.
The problem is that GridViewGroupRow.IsExpanded property is bound to the underlying data object, and the default value of the data object for the IsExpanded property is true. I'm attaching a sample project that illustrates how to do this.
In the future we will expose RowCreated and CellCreated events for such purposes, as well as appropriate property with which you will be able to define GridViewGroupRow.IsExpanded and GridViewExpandableRow.IsExpanded (Hierarchy row) properties.
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