Hedge Funds

Prentice Capital to unwind private-company investments


Prentice Capital Management is unwinding its side-pocketed private-company investments, following a writedown of 7.7% in the fourth quarter on Levitz Furniture. The firm has tapped two senior analysts to co-head the effort.

Side-pocket investments now make up 30% of the $1.5 billion hedge fund, whose management team left Steve Cohen's SAC Capital Advisors in 2005. The firm plans to sell all its private-company investments over time, but the side pocket will still invest in public securities.

Prentice's decision follows the losses taken on Levitz, in which it invested after the retailer filed for bankruptcy in late 2005. While the writedown