When Perry Capital’s Nathaniel Klipper and Sandell Asset Management’s Jim Cacioppo teamed up to launch One East Capital Advisors with $450 million in July 2006, they grew the firm to $2 billion in just two years. But One East has not lived up to its early promise. Tumultuous markets and redemptions have plagued the firm, which is now less than half of its original size in terms of both assets under management and personnel. In the first half of 2008, One East Partners, an event-driven fund that invests in risk arbitrage, distressed debt and event-equities, dropped 10.7%. In September 2008, the firm put up gates and restricted how much investors could pull out of the fund. Investors who opted to redeem on September 30, 2008,...