Segantii Capital Management to Shut Down Hedge Fund Amid Insider Trading Charge
Segantii Capital Management Ltd., one of Asia’s largest hedge funds, is closing its doors and returning capital to investors following an insider trading charge in Hong Kong. The news has sent shockwaves through the financial industry, as the firm managed nearly $5 billion in assets and was known for its stellar returns and expertise in block trades.
The decision to shut down the fund was announced by CEO Simon Sadler and Chief Executive Officer Kurt Ersoy in a brief call to staff on Thursday. Concerns about potential redemption requests led to the closure, with the company stating that it will wind down operations in a measured fashion.
The insider trading charge, brought by Hong Kong’s Securities and Futures Commission, alleges misconduct related to a block trade in 2017. Segantii has vowed to vigorously defend itself against the accusation, but the legal action has raised concerns about the firm’s ability to continue its investment strategy.
In a letter to investors, Segantii stated that it is suspending redemptions “with immediate effect” in order to return cash over time. The firm emphasized that it is in the best interests of investors to return their capital in an orderly manner.
The closure of Segantii marks a significant turn of events for Sadler, who was once hailed as the “block-trade king” of the region. The firm’s ability to quickly liquidate its portfolio was highlighted in a recent investor letter, with the company stating that it could sell off 84% of its holdings within a day.
Global prime brokers, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., have been assessing their positions with Segantii in light of the insider trading charge. The firm’s strong track record of returns had attracted a wide range of investors, helping Sadler amass a net worth of at least $360 million.
As the legal proceedings against Segantii move to a higher court in Hong Kong, the future of the firm remains uncertain. Sadler and former trader Daniel La Rocca are set to appear in court in June, with the potential for longer prison sentences if convicted.
The closure of Segantii has sent shockwaves through the financial industry, raising questions about the future of the firm and the impact on its employees and investors. Stay tuned for further updates on this developing story.