West Palm Beach (HedgeCo.Net) – After a much publicized debate on their troubled hedge funds, Drake Management will shut down their $2.5 billion Global Opportunities Fund, according to a letter to investors.
Drake had suspended redemptions in December, after the fund lost 25% of its value and investors rushed to withdraw money. After experiencing sharp declines due to the subprime mortgage crisis, management was pondering the decision of shutting down due to “sharply negative performance and the extreme volatility and illiquidity of certain capital markets.”
The Global Opportunities Fund was launched in 2002 by the firms founder, Anthony Faillace and Steve Luttrell. In it’s heyday, the fund was posting returns of 13.4% a year on average.
Drake plans to start a new fund later this year, and investors who choose to transfer their capital to the new fund will not pay performance fees until their losses are recouped. The liquidation is expected to be complete by early 2009 and investors will likely get most of their money back, the letter stated.
Drake, a New-York based company run by former BlackRock Inc. employees, also manages two other hedge funds, the $1.3 billion Absolute Return Fund which declined over 14% last year, and the $160 million Drake Low Volatility Fund.
Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net
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