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Pequot Capital to Liquidate Funds in Coming Months

Companies:Companies

By: Krystina Gustafson | 27 May 2009 | 06:13 PM ET

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Pequot Capital will liquidate its core funds and return cash to investors as it winds down business over the next few months, according to a letter from the hedge fund's CEO and Chairman, Arthur Samberg.

The fund was unable to overcome negative publicity stemming from investigations against Samberg by the SEC and U.S. Attorney’s Office, even though he was never charged.

"Those agencies closed their investigations in 2006 without bringing any charges, but Pequot nonetheless suffered from adverse publicity," Samberg wrote in the letter, which was obtained by CNBC. "Public disclosures about the continuing investigation have cast a cloud over the firm."

Pending completion of the year-end audit, liquidation of certain assets and payment of expenses, the fund plans to distribute investors a "significant" amount of cash by June 30 and pay out the rest over the next few months, according to the letter.

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Meanwhile, it will spin out funds Matawin and Special Opportunities as independent entities.

"The Pequot Partners Fund has generated net annualized returns of 10.1 percent over the past five years and 1.8 percent in 2009 through April 30 vs. the S&P’s declines of 2.7 percent and 2.5 percent, respectively," Samberg wrote. "I am enormously proud of Pequot’s long-term track record."

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