In September 1965, I moved back to the New York City area where I grew up and enrolled at the Columbia Business School. I accelerated my stay at CBS when we had our first child in July 1966, going through the summer semester, and graduating in December 1966. That son, Jeff, was followed by Laura in 1968, and Joe in 1970.
How did you make your way from Lockheed to the financial sector? Samberg: MIT figured in my first job on Wall St. There were very few MIT grads on the street in the late ‘60s. In fact, because of the depression and then World War II, there was a real hollowing out of people overall in the financial markets. The director of research at Kidder, Peabody was Tom Folger (Mechanical Engineering SB ‘48, SM ’49), an MIT grad. In a pioneering move, he was determined to build a technology research capability at Kidder; the first, I believe, in the business. Shortly before I got there he had hired Bob Johnson, (Physics ’63) to follow computers and electronics companies. I was assigned aeroastro and also electronics. Bob and I shared an office next to Tom’s. I loved it and loved being a pioneer. One thing I discovered about myself was a strong entrepreneurial instinct. In 1970, a small start-up money management firm, Weiss, Peck & Greer was founded. I joined them as the first outside professional hire in April. The firm was a great success and I stayed 15 years doing research, joining the management committee, and, for the final five years, managing firm capital.
The entrepreneurial bug I mentioned stayed with me. In 1984, encouraged by superior performance in managing firm capital (30 percent per year for five years), I joined a former WP&G employee, Jon Dawson, who had started an advisory firm, to start a hedge fund. The renamed Dawson, Samberg Capital Management launched Pequot Partners in November 1986 with $3.3 million in assets. At the time there were perhaps 50 hedge funds in the business. Performance was good, and the fund grew massively. In 1998 the hedge funds spun out into a new firm, Pequot Capital. In early 2000 the Wall St Journal announced that Pequot was the largest hedge fund in the world with $17 billion in assets under management.
Please tell us more about your current job. Samberg: As exciting as the ‘90s were, the ‘00s were fraught with disappointments and challenges. In 2000, I had an aortic dissection, a very serious vascular disease. The next year Pequot split into two firms. While trying to build the firm back up I ran into fierce headwinds facing the hedge fund industry. Performance remained good; the 23-year record for the fund exceeded 17 percent compounded annually, despite being down 20 percent in the first year. The ride was exceptionally rewarding and challenging. I credit my MIT years for preparing me the good times and bad. I have drunk from a fire hose since I was 17, and have learned well how to handle what the world dishes out.
A conversation with AeroAstro alumnus Arthur Samberg
Published on Nov 18, 2016
Annual magazine review of MIT Aeronautics and Astronautics Department research and educational initiatives.