Segantii Capital Management to Wind Down Operations Amid Regulatory Challenges and Legal Troubles

Segantii Capital Management, the $4.8bn Asian hedge fund led by Simon Sadler, has announced it will wind down operations and return capital to investors in an “orderly manner,” affecting around 140 employees across Hong Kong, New York, and London. A spokesperson from the firm stated, “At Segantii, we have always understood the great responsibility of managing money professionally, a responsibility we have never taken lightly. However, we believe that it is now in the best interests of our investors to return their capital in an orderly manner.”

Sources suggest the firm faced nearly $1bn in withdrawal requests, leading Segantii to suspend redemptions. Previously, the fund had allowed redemptions on a monthly or quarterly basis. During an internal call, Sadler and CEO Kurt Ersoy avoided questions about employee compensation and job security, with some staff, including a new hire, informed they would no longer be needed.

The hedge fund is also embroiled in an insider trading case involving Sadler, the firm, and former trader Daniel La Rocca. Hong Kong authorities are set to move the case from the Magistrates’ Court to the District Court, where sentences can reach up to seven years, in a decision that is yet to be finalised. This follows insider trading allegations linked to a 2017 block trade. The case is scheduled for a hearing in June.

In addition to the legal woes, Segantii faced regulatory challenges elsewhere. In December, South Korean regulators imposed a fine of KRW1.48bn ($1.08m) on the firm over certain hedging trades. Further complicating matters, JPMorgan Chase & Co, based in New York, announced it would no longer engage Segantii in new block trades or IPOs.