Hong Kong’s Segantii Fund Gains 29% YTD

Oct 18 2011 | 8:20am ET

A year that may be an annus horribilis for many hedge funds could be the best ever for the Hong Kong-based Segantii Asia-Pacific Equity Multi-strategy Fund, which has returned 29% through September.

The $292 million fund run by Hong Kong-based Segantii Capital Management gained 7.6% in July and 5.3% in September on its way to recording its best quarter ever, according to a newsletter to investors seen by Bloomberg.

Launched in December 2007, the fund has posted positive returns in every year since, including a 24% gain (its best to date) in 2008.

The Segantii fund doesn’t bet on general market directions and did well during the three months ending in September when the HFRI Fund-Weighted Composite Index posted its biggest quarterly decline since 2008 and the MSCI World Index shed 17%.

“Our blend of relative value and events enabled the fund to profit during the initially benign and subsequently volatile environment,” said the Segantii newsletter. “We approach year-end well prepared for a challenging and evolving investment landscape.”

Marketing documents cited by the news agency say the fund trades Asian—particularly North Asian—equities and equity-linked securities. Its relative-value strategy identifies and attempts to exploit pricing gaps between share classes of the same company, or shares listed on different exchanges or shares of two similar stocks.

According to the marketing documents, it also exploits the pricing effect of corporate events with well-defined catalysts and timelines.

“After an active July and a quiet August, activity picked up appreciably in September,” the newsletter said. “The distressed market conditions towards quarter end presented opportunities that we will look to realize in October.”

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