Macro

Segantii's $395M Bet Against Nasdaq ETF Amid 8.4% Gain

Segantii Bets $395 Million Against Nasdaq ETF, Amidst $1.5 Billion US Exposure and Legal Challenges

By Barry Stearns

5/16, 03:32 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
Apple Inc.
Alibaba Group Holding Limited
Microsoft Corporation
NVIDIA Corporation
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Key Takeaway

  • Segantii Capital placed a $395 million bearish bet on a Nasdaq-linked ETF, despite the ETF's 8.4% Q1 gain and further 2% rise post-March.
  • The hedge fund's total US securities exposure dropped to $1.5 billion at March end, marking a 20% decrease from the previous quarter.
  • Amid insider trading charges in Hong Kong, Segantii's hedge fund showed resilience with a modest 0.3% April gain following a 2.5% increase earlier.

Segantii's Strategic Moves in the US Market

Segantii Capital Management Ltd., a hedge fund known for its relative value and capital markets trades, made a significant bearish bet on the Nasdaq 100 index by the end of March, with a $395 million wager on put options for an Invesco Ltd. ETF. This ETF, which tracks the largest 100 non-financial companies including tech giants like Microsoft Corp., Apple Inc., and Nvidia Corp., saw an 8.4% gain during the quarter, with an additional 2% increase since March 28. Despite facing insider trading charges in Hong Kong, Segantii showed a keen interest in the US market, with its total exposure to US securities standing at $1.5 billion at the end of March, marking a 20% decrease from the previous quarter.

Alibaba's Role in Segantii's Portfolio

Alibaba Group Holding Ltd. emerged as Segantii's second-largest holding in the US, valued at nearly $108 million. The firm increased its stake in Alibaba by 50%, despite the Chinese technology giant's 6.6% decline in the US during the first quarter. However, Alibaba has since rebounded by 12%. This move underscores Segantii's strategic positioning and its ability to navigate through market volatilities, especially in the technology sector.

Segantii's Global Presence and Performance

Segantii, under the leadership of founder Simon Sadler, has established itself as a significant player in the hedge fund industry, particularly in Asia-Pacific equities and equity-linked securities. With offices in Hong Kong, London, New York, and Dubai, the firm has achieved an annualized return of 12% since its inception in December 2007, outperforming the Eurekahedge index of Asian peers. Despite the recent legal challenges, including criminal proceedings for alleged insider trading, Segantii has maintained its performance, with its hedge fund up about 0.3% in April after a 2.5% gain in the same period.

Management Quotes

  • Kurt Ersoy, CEO of Segantii:

    "Declined to comment."