* Segantii hit by five recent resignations
* Fund suffered two straight years of underperformance
* Assets surged to $750 mln after 41 pct gain in 2011
(Adds details about fund's performance, quote from industry
By Nishant Kumar
HONG KONG, Jan 30 Segantii Capital Management,
one of Asia's fastest growing hedge funds, has been hit by five
resignations in the last few weeks, people with knowledge of the
matter told Reuters, after the firm saw its first annual loss.
Such an exodus is rare in the industry, and it marks a sharp
u-turn for a fund that has grown to manage about $750 million
from just $25 million in 2007, making it one of the biggest
capital raising successes in the region.
The departures are related in part to a difficult atmosphere
at the fund that emerged after two straight years of
underperformance compared to peers, the people said. Last year
Segantii lost 1.7 percent in its first annual loss, according to
the fund's newsletter.
The current staff turnover follows at least six departures
last year, including its Chief Operating Officer Nigel
Hellewell, who left just a year after joining the firm.
"Historically it's been very difficult for a mid-size
boutique hedge fund to recover from this level of professional
departures," said Peter Douglas, founder of Singapore-based
hedge fund consultancy GFIA.
"It's massively disruptive. It's going to be a two to three
year rebuilding exercise for any such firm," he added.
Key recent departures include Fei Chen, who was responsible
for capital markets and event driven investments. He left this
month after nearly five years at the firm, sources said. Kirtes
Bharti, head of financing, will leave next month, sources said.
Reached by phone, Chen and Bharti declined to comment.
Derek Tam, who helped manage relative value strategy, has
resigned along with Patrick Ko, who runs the firm's middle
office operations, according to the sources. Convertible bond
and volatility trader, Lewis Fellas, has handed in his
resignation and will leave next month, the sources said.
Tam, reached by phone, declined to comment. Efforts to reach
Ko and Fellas were unsuccessful.
Segantii's Chief Executive, Kurt Ersoy, speaking to Reuters
by telephone, declined to comment on the resignations.
Hong Kong's securities regulator has issued 41 staff
licences to Segantii since the fund's launch, according to data
compiled by webb-site.com, which is run by former independent
director of the Hong Kong Exchanges & Clearing, David Webb. The
hedge fund had only 18 licence holders as of Jan. 29, the data
TWO TOUGH YEARS
Segantii was founded by Simon Sadler, a former head of Asian
equity trading for HSBC Securities, who is also the fund's chief
In 2008, when Asian hedge funds tumbled 20 percent,
Segantii's hedge fund returned 23.8 percent, one of the few to
make money in the region when the global financial crisis wiped
out hundreds of billions of dollars from the world markets.
Investor interest in Segantii surged further after the fund
scored its biggest gain of 40.75 percent in 2011 when the
Eurekahedge Asian index fell 7.4 percent, according to a
newsletter obtained by Reuters.
Its assets more than doubled over the next two years but the
hedge fund is yet to prove that it can continue generating
pre-2012 type returns with a larger asset base.
The fund gained 4.8 percent in 2012 and lost 1.7 percent
last year when the Eurekahedge Asian index rose 9.8 percent and
15.9 percent, respectively.
(Reporting by Nishant Kumar; Editing by Michael Flaherty and