Pequot Capital to liquidate over Microsoft share investigation


Pequot Capital Management, a $3 billion Connecticut based hedge fund run by renowned investor Arthur Samberg is to be liquidated due to publicity generated by an ongoing investigation into insider trading of Microsoft shares.

Samberg said in a letter to investors that the fund was unable to overcome negative publicity stemming from the investigation by the SEC and U.S. Attorney’s Office. “Those agencies closed their investigations in 2006 without bringing any charges, but Pequot nonetheless suffered from adverse publicity,” Samberg said. “Public disclosures about the continuing investigation have cast a cloud over the firm.”

Samberg will liquidate Pequot Capital’s core fund of $2 billion, with cash being paid to investors before June 30. The Pequot Capital Matawin and Special Opportunities funds (worth $1 billion) will be spun off as independent entities.

Pequot has out performed the market in recent times, delivering a 1.9% return in 2009 to April vs a decline in the overall market.

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