Key Takeaways
- • Manas Capital, a Hong Kong-based long-short equity fund, deployed capital into Baidu Inc., Samsonite International SA, and Delfi Ltd following the Brexit-induced market selloff that erased $3.6 trillion in global equity value.
- • The fund's founder and portfolio manager Anuj Sehgal characterized Brexit as "a political crisis more than an economic crisis," justifying the decision to add to existing positions in companies that had become undervalued.
- • Manas Asian Equities Value Fund returned 6.3 percent year-to-date and gained 3.8 percent in June, demonstrating the strategy's performance despite broader market turmoil.
- • Samsonite's Hong Kong-listed shares declined 5.3 percent since the Brexit vote, with year-to-date losses reaching 7.3 percent, making the position attractive for the contrarian buyer.
- • Delfi Ltd shares surged 38 percent in a single day after Aberdeen Asset Managers announced its own equity purchase on June 29, validating the thesis that post-Brexit valuations presented opportunity.
Summary
Manas Capital, a Hong Kong-based long-short equity hedge fund specializing in Greater China, India, and Southeast Asia, capitalized on post-Brexit market dislocations by adding to positions in three companies that had become depressed following the United Kingdom's June 23 vote to leave the European Union. The fund increased stakes in Chinese internet company Baidu Inc., luggage manufacturer Samsonite International SA, and chocolate maker Delfi Ltd, according to portfolio manager Anuj Sehgal, who founded Manas in 2012 after prior roles at JPMorgan Chase, Nomura Holdings, and North of South Capital.
The strategic rationale centered on valuation opportunism amid what Sehgal described as temporary market dislocation rather than fundamental deterioration. "Brexit represents a political crisis more than an economic crisis," Sehgal stated. "There will be economic issues, but they will play out. The valuations on these companies were cheap enough to add to our existing positions." The timing proved sound as global equity markets shed $3.6 trillion in market capitalization in the referendum's immediate aftermath, though many indices reversed losses within the following week as central banks signaled readiness to provide monetary support.
The Manas Asian Equities Value Fund's performance validated the contrarian positioning, returning 6.3 percent year-to-date and gaining 3.8 percent in June despite broader market turbulence. The impact was particularly evident in Delfi Ltd, where shares surged 38 percent in a single trading day following Aberdeen Asset Managers' announcement on June 29 of its own equity purchase. Samsonite's Hong Kong-listed shares reflected continued pressure, having fallen 5.3 percent since the Brexit vote and declining 7.3 percent year-to-date at the time of reporting. Sehgal declined to disclose the specific volume of additional shares purchased across the three holdings.
The strategic rationale centered on valuation opportunism amid what Sehgal described as temporary market dislocation rather than fundamental deterioration. "Brexit represents a political crisis more than an economic crisis," Sehgal stated. "There will be economic issues, but they will play out. The valuations on these companies were cheap enough to add to our existing positions." The timing proved sound as global equity markets shed $3.6 trillion in market capitalization in the referendum's immediate aftermath, though many indices reversed losses within the following week as central banks signaled readiness to provide monetary support.
The Manas Asian Equities Value Fund's performance validated the contrarian positioning, returning 6.3 percent year-to-date and gaining 3.8 percent in June despite broader market turbulence. The impact was particularly evident in Delfi Ltd, where shares surged 38 percent in a single trading day following Aberdeen Asset Managers' announcement on June 29 of its own equity purchase. Samsonite's Hong Kong-listed shares reflected continued pressure, having fallen 5.3 percent since the Brexit vote and declining 7.3 percent year-to-date at the time of reporting. Sehgal declined to disclose the specific volume of additional shares purchased across the three holdings.
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