WESTPORT, Conn. – Pequot Capital Management Inc. in early January spun out of Dawson-Samberg Management Inc. and anticipated a first close on its new venture vehicle by the end of the month, a source said.
The amicable spinoff, first announced last August but not effective until January 1, was a natural evolution of the business, Pequot Chairman and Chief Executive Arthur Samberg said in a company statement. The Pequot family of funds, three private equity and 10 public sector vehicles comprising nearly $4 billion, will concentrate on both public and private investments, including venture capital, private equity and small- to large-cap public investments, leaving Dawson-Samberg to focus on its more conservative investment strategy.
Meanwhile, the firm anticipates an initial close on its first venture capital fund, Pequot Venture Partners, by the end of January and a $50 million final close sometime in the first quarter, the source said.
Gerald Poch, a principal at the firm, declined to confirm when he expected the fund to close and would not name any limited partners, saying only that they will include high-net-worth individuals and institutions.
Pequot Venture Partners will focus on $1 million to $3 million seed- and early-stage investments in information technology and telecommunications. The two-year-old $150 million Pequot Private Equity Fund, which invests in IT, telecom and health-care devices and services, focuses on later-stage private companies, as well as private investments in public entities (PIPEs). The later fund is two-thirds invested, with a majority in PIPE deals.
Pequot Capital, founded in 1986, believes that its expertise in private and public company research and the diversity of its investment vehicles makes the firm an attractive partner for its portfolio companies. “What’s unique is … we offer our portfolio companies the [ability] to invest [in] them at various stages of development,” Mr. Poch said.
Mr. Poch and Larry Lenahan, another principal of the firm, oversee Pequot’s three private equity vehicles including the venture fund, which will be managed by Principal Erik Jansen and Associate Jeff Feldman, who joined the firm after founding their own Internet investment firm, Digital Media Corp.
Although the private equity and venture teams are headquartered in Connecticut, Pequot also has offices in New York and San Mateo, Calif.