Pequot Capital

Pequot Capital Management Hedge Fund Note

The following piece on Pequot Capital Management is being published as part of our daily effort to track hedge fund events and managers in the industry. To review other hedge fund related announcements and manager notes please see our Hedge Fund Tracker Tool.
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• In 2004, Pequot expanded its upper management team. “Employee-owned, Pequot Capital offers funds that focus on technology, health care services, and small-cap firms to institutional investors and wealthy individuals.”
• Pequot Management’s venture capital arm, “Pequot Ventures” split from the company and formed “FirstMark Capital”. The move was described as “the next logical step” for both Pequot Capital and Pequot Ventures. The move does not appear to effect Pequot Capital’s Hedge Funds since Pequot Ventures was run separately from the rest of the firm.
• Pequot Capital Management’s Chief Investment Strategist shares his ideas during a Financial Round Table Discussion in January 2008. He believes the current market condition and credit crisis are more serious than most people believe. He also thinks that many investors under estimate the seriousness of the energy situation as well.
• A Congressional report came out that the SEC made a mistake in its dealings with Pequot Capital Management. Pequot was suspected of insider trading. The report says the SEC mishandled the case by making a series of mistakes to compromise the investigation. The SEC closed its investigation of Pequot without taking any action against the firm.
• Pequot Capital is the majority shareholder of Midwest Air Group Inc. (8.8%) Midwest Air considered pursuing a “$16 per share all-cash proposal from a private equity firm and its consortium.” Pequot Capital Management wrote a letter to the company claiming that this proposal is not in the best interest of the shareholders and that a cash and stock deal would be better. The article contains a copy of the letter sent to Midwest Air.
• Pequot Capital Management’s chief investment strategist Byron Wien’s August 2008 market commentary focuses on South America. He specifically mentions how Brazil has become a hot bed for growth and the country has seen a huge inflow from US investors. He also discusses why Argentina, Brazil’s neighbor, has remained relatively stagnant.
• New development at Pequot Capital Management called the “Emerging Manager Program” The idea is a pool of capital run by 13 managers using 12 different strategies. The article talks extensively about the firm and its global strategies and risk management.
• Byron Wien’s top 10 surprises of 2007. He predicts oil and gold prices will rise despite a world wide economic slowdown. He thinks Asian emerging markets will peak, and focus will shift to Latin America.
• Byron Wein’s predictions for the top surprises of 2008. He predicted a US recession, a surge in commodity prices, and rising inflation. He also thinks Obama will be elected president in the upcoming election.
• Pequot Capital recently launched a global long/short fund in April 2008, its second new Hedge Fund of the year. The “Pequot New Vision Fund” contains $18.1 million is assets. The Fund will attempt to earn “attractive returns with consistent alpha by identifying global emerging growth opportunities that are fundamentally mispriced by the market”
• Provides a brief snapshot of Pequot Capital Management. Contains descriptions of the firm’s overall strategies and tendencies. Also mentions the company directors and where the offices are located.
• From Dec 2007, the article talks about the firm’s Short Credit Fund up 18% YTD. The fund placed bets on rising mortgage defaults that paid off big with the current credit and sub prime mortgage crises.
• Dated Nov. 2007. Talks about the Global Core Fund, the “flagship fund” with $2.6 billion in assets has gained 37% YTD under the management of founder Art Samberg and Mike Corasaniti. The firm also decided to close 3 poor performing funds and move the money into other core funds.
• Talks about the plan for Pequot Ventures to break away from the firm and become an independent private equity firm known as FirstMark Capital. Pequot will still be affiliated with the newly independent firm. . One of the major reasons for this potential split is that the Hedge Fund has decreased its interest in the technology sector, while the VC branch still focuses primarily on tech.
• Pequot teams with Pangaea Capital in Singapore. The firm’s focus in Asia has become “distressed assets” instead of “publicly traded stocks” Pequot has made a strong push into Asia, as the firm traditionally invested in US equities. Pequot’s was seeking $300 million for its Pequot/Pangaea Asia Opportunities Fund.
• This pdf file is an interview with an employee at Pequot Ventures, the VC arm of Pequot Capital Management. He talks about what the firm looks for in their employees. He also discusses the investing strategy of the firm.

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