One of the most famous hedge funds around, Art Samberg’s Pequot Capital, is shutting down.
WSJ: Arthur Samberg, among the best-known hedge-fund managers, is closing down his firm amid an ongoing investigation into possible insider trading.
“Public disclosures about the continuing investigation have cast a cloud over the firm and have become a source of personal distraction,” Mr. Samberg wrote in a letter that was sent to investors of his Pequot Capital Management Inc. late in the day on Wednesday. “With the situation increasingly untenable for the firm and for me, I have concluded that Pequot can no longer stay in business.”
Allegations of insider trading first surfaced in 2006, though there have not been any actual charges. But between mediocre performance and the cloud of suspicion, the firm has steadily declines from its heights.
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But in recent years, investors have shunned the fund, partly because the investigation has raised questions about the firm, even though Mr. Samberg, 68 years old, has strenuously denied any impropriety. Pequot peaked at $15 billion in 2001, before Mr. Samberg split with Daniel Benton, with each managing about half the firm’s capital for their own firms. Since then, Pequot’s assets have drifted lower, despite rabid interest in hedge funds. He now manages about $3 billion.