The SEC investigation is over, but limp returns may be the
real barrier to growth
Pequot Capital Management has spent the past two years
carrying out 65-year-old founder Art Samberg's plans to convert
his storied hedge fund into a multimanager platform capable of
perpetuating his legacy.
That goal could not have been helped by a two-year probe of
the firm, discontinued this October, during which the U.S.
Securities and Exchange Commission investigated claims of
insider trading. Pequot emerged unscathed from the
investigation, and persevered, adding strategies and staff. But
despite its efforts, asset growth has been slow. Some
institutions likely could not invest at the firm while the
probe was ongoing. But more critically, investors say, recent
mediocre performance was the bigger stumbling block.
Westport, Conn.-based Pequot is one of the oldest hedge fund
firms still in existence, having gotten off the ground in 1986.