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Segantii Capital Management initiates capital return process amid wind-down

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Segantii Capital Management has initiated the return of approximately one-third of its $4.7bn AUM to investors, following its decision to wind down operations amidst an insider dealing charge, according to a report by Bloomberg. 

The capital return process commenced earlier this week, with plans for two additional installments. The next installment is expected in July, with the final repayment potentially concluding by October. 

Hong Kong-based Segantii laid off numerous employees earlier this month, with operational staff, traders and investment professionals specialising in quantitative strategies among those retained by the firm. 

On 23 May, the firm informed investors about the potential impact of the legal proceedings on its operational capabilities, suspending all redemption requests and committing to orderly capital returns without specifying a definitive timeline. 

Hong Kong authorities charged Segantii, Simon Sadler, the firm’s founder and owner of Blackpool Football Club, and former trader Daniel La Rocca early last month with insider trading related to a 2017 block trade. 

This development prompted New York-based bank JPMorgan Chase & Co to cease engagement with Segantii on new block trades and initial public offerings globally, as well as investor redemption requests nearing $1bn.  

Shortly after, the firm announced the closure of its multi-strategy hedge fund, which had historically delivered strong returns. 

The upcoming legal proceedings will see all three appear in a Hong Kong District Court on 2 July, following the case’s transfer from a lower-level magistrates’ court. If found guilty, individuals convicted of insider dealing by the district court could face up to seven years of imprisonment.  

Established in 2007 by Sadler with an initial $26m, Segantii had offices in London, Dubai and New York, employing 151 as of March. 

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