Yahoo Finance Segantii Returns a Third of Fund Assets and Cuts Dozens of Staff
(Bloomberg) -- Segantii Capital Management Ltd. has returned about a third of its $4.7 billion in assets under management to investors, according to people familiar with the matter, a month after the Asia hedge fund giant said it would wind down following an insider dealing charge.
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The repayment happened earlier this week, and the fund intends to return its remaining capital in two more installments, said the people, who asked not to be identified discussing private information. The next one is likely to be in July, and the final repayment could take place by October, though the timeline could change, the people said.
Hong Kong-based Segantii also laid off dozens of employees earlier this month, said other people with knowledge of the matter. It has kept some operational staff, traders and investment staff, including a few who focus on quant strategies, the people added.
Hong Kong authorities said in early May that they had commenced criminal proceedings against Segantii, its founder Simon Sadler and former long-time trader Daniel La Rocca for insider trading tied to a block trade in 2017. The allegations led some banks to reassesses their dealings with the hedge fund, and its investors requested to withdraw nearly $1 billion. That triggered an abrupt decision by the 16-year-old firm to shutter its multi-strategy hedge fund, which had produced market-beating returns for many years.
Segantii representatives did not immediately respond to an emailed request for comment on Friday.
The firm told investors on May 23 that the legal action could affect its ability to implement its investment strategy effectively. It suspended all redemptions and said it would return capital to all investors in an orderly manner. It did not give a specific timeline then.
Segantii, which also has offices in London, Dubai and New York, had 151 employees at the end of March, according to its website.
The three defendants are to appear in a Hong Kong District Court on July 2 to face the criminal charges, after the case was moved from a lower-level magistrates’ court. The district court can mete out as many as seven years of jail time for individuals found guilty of insider dealing.
Sadler, a former trader at Dresdner Kleinwort Wasserstein and Deutsche Bank AG, founded Segantii in Hong Kong in late 2007 with $26 million. At its peak, the firm commanded $6.2 billion of assets. Sadler later became the owner of the Blackpool Football Club in the UK.
Segantii returned an annualized 12% since its inception through May this year, outperforming the S&P 500 Index and a Eurekahedge index tracking Asia-focused peers.
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