NEW YORK (HedgeWorld.com)–Not quite two years have passed since Francis Saldutti sold his Ardent Capital Management’s technology hedge fund to NorthShore Asset Management, Chicago.

Now, though, a report in the Wall Street Journal says the Securities and Exchange Commission is probing a significant loss of money at the New York-based hedge fund.

According to a source familiar with the matter, the investigation was likely born out of three years of poor performance and significant investor redemptions rather than wrongdoing. The fund, which started at US$150 million in assets under management, has since dipped to between US$40 million and US$50 million, said the source, who requested anonymity.

A spokesperson for the SEC said the commission would neither confirm nor deny the existence of an investigation.

Little is known about the fund’s history. The technology hedge fund is 80% invested in non-technology investments, and allegedly Mr. Saldutti decided against shorting last year because he was afraid of being whipsawed in the market. According to the source, NorthShore did get in touch with some investors who were eager to move their assets to other NorthShore funds.

A call to Mr. Saldutti’s Ardent Research Corp. was not returned. John F. Adams, a lawyer with Schiff Hardin LLP, Chicago, which represents NorthShore Asset Management, confirmed that the firm planned to meet with SEC officials in Chicago later this week, adding that NorthShore officials set up the meeting in full cooperation with the SEC.

He said that he didn’t think there was any misuse of hedge fund assets.

NorthShore is both a hedge fund and private equity company that is relatively close-mouthed about its dealings. Last year the firm, through an affiliate, purchased most of Circle Trust Co., an administrative firm that serves the hedge fund industry (see ).

Founded by Kevin Kelley, Robert Wildeman and Glenn Sherman, NorthShore Asset Management has acquired hedge funds, banks and insurance companies. Last year, Mr. Kelley, chief executive of the firm, had to step down from his duties because of health concerns. He still owns 25% stake in the firm.

Contact Bob Keane with questions or comments at: bkeane@investmentadvisor.com.