Kingdon Capital, Tied to Adani-Hindenburg Dispute, Has Just One More India Link

The hedge fund iShares MSCI India ETF. As per its 13 F filing, the hedge fund has a long position in the fund with a $17.4 million stake that constitutes around 1.9% of Kingdon's total portfolio. The hedge fund has total assets of $915.77 under management.

Kingdon Capital Management, the hedge fund associated with Hindenburg Research and known for short selling Adani Group shares, has only one other India-related investment in its portfolio. 

Kingdon Capital is a US-based investment management company founded by hedge fund manager Mark Kingdon. It provides services to high-net-worth individuals and institutional clients. 

What is ishares?

iShares is a collection of exchange-traded funds (ETFs) managed by BlackRock. According to the fund's latest factsheet, the iShares MSCI India ETF was launched on February 2, 2012, and aims to track the investment results of the MSCI India Index. As of March 31, 2024, the fund has net assets of $9.1 billion. 

Its top holdings include Reliance Industries (8.49%), ICICI Bank (5.11%), Infosys (4.67%), HDFC Bank (3.82%), and Tata Consultancy Services (3.29%). 

Over the last year, the fund's NAV grew by 31.19%. The 3-year and 5-year annualized returns were 9.68% and 9.59%, respectively. In CY2023, the ETF's returns were 17.49%. The ETF is traded on the CBOE BZX exchange. 

Another iShares ETF in Kingdon's portfolio is the iShares Emerging Markets Equity Factor ETF. Over the past year, its NAV performance was 13.76%, while its market price performance was 13.96%. Launched on December 8, 2015, this ETF includes Indian equities like Infosys, TCS, Reliance Industries, and HDFC Bank. 

Other Holdings

The fund's holdings include a 2.23% stake in Meta Platforms (formerly Facebook). At present, the portfolio contains 88 different holdings. As of June 30, 2024, the largest holding is the Select Sector SPDR Trust, valued at $31.6 million, making up 3.45% of the portfolio. 

Tenet Healthcare Corp, a healthcare provider based in Dallas, Texas, holds the second-highest weight in the portfolio, valued at $29.3 million and representing 3.20%. Other significant holdings include FTAI Aviation (2.94%), API Group Corp (2.78%), and Praxis Precision Medicines Inc (2.33%). 

The hedge fund recently made headlines after the US-based short seller Hindenburg received a show-cause notice from SEBI. According to the letter, Kingdon had a profit-sharing agreement with Hindenburg, under which Hindenburg would receive 30% of any gains from securities trading based on its research.

For the Adani short bet, the cut was pared to 25%. The letter further noted that by the end of December, Kingdon begun subscribing into the shares of the fund, and in January transferred $43 million in two tranches to build short positions in Adani Enterprises.