Pequot Capital Management, run by well-known manager Art Samberg, is planning to roll out an event-driven fund this spring. It will be managed by the firm's newly-minted event-driven group run by industry veteran Steve Pigott. He recently joined the firm from the now defunct Marin Capital Partners and was previously at Citadel Investment Group.
The Pequot Event Driven Fund will hold 20-40 positions, investing in merger arbitrage, spinoffs, exchange offers, non-bankruptcy restructurings and post-bankruptcy equities, according to an investor document. Initially, the focus will be on U.S. equities, with some debt and overseas investments, before the fund gradually expands its foreign holdings. "We look to minimize market exposure via structurally embedded hedges, equity options, comparable company basket hedges or market derivatives," the document says.
The fund's capacity is $500 million. There is a $5 million minimum for institutions and $1 million for individuals. The performance fee will be 20%. There will also be two share classes with different lockups and management fees. Class A investors will be subject to a one-year soft lockup that will impose a 3% penalty on redemption during the first 12 months. These investors will pay a 2% management fee. Class B investors will be subject to a two-year hard lockup and will pay 1.5% management fees.
Calls to officials at Pequot, which manages in excess of $7 billion, were not returned by press time.