Current news for this fund:

Drake Management - Global Opportunities - global fixed income


Count of distinct funds: 3
Capital base: $5 bn
Loss: -25% (?)

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Implosion, 2008-03-26:

Absolute Return magazine confirms that Drake Global Opportunities is a closure.

Ailing, 2008-03-12:

In early January, reports emerged that Drake Management had suspended redemptions from its Global Opportunities Fund (link). The Financial Times noted:

Drake, which had $13bn under management before hitting problems in the autumn, had unsuccessfully appealed to investors to drop withdrawal requests before deciding to pay out only a quarter of the money asked for, investors said.

Drake had enough cash in its $3bn Global Opportunities fund to meet all the redemptions but wanted to maintain a hefty cash cushion to protect remaining investors. Drake was set up by Anthony Faillace and Steve Luttrell, formerly of BlackRock, in 2001 with the backing of Icelandic bank Kaupthing, which holds 20 per cent of the management company.

Apparently, the problems at Global Opportunities spread. Word comes today that Drake Management is considering liquidating all three funds under management. Per a Reuters article:

Drake Management, which last year managed $5 billion in hedge fund assets, told investors on Wednesday that it is considering winding down its three hedge funds, citing "challenging market conditions."

The news came in a letter sent by Drake to its investors. A copy of the letter was obtained by Reuters.

The funds, which invest in fixed income globally, include Drake Global Opportunities, Drake Absolute Return Fund and Drake Low Volatility Fund.

The New York-based firm said in the letter that Global Opportunities has had "sharply negative performance" in the face of "extreme volatility of certain capital markets over the last six months." The fund was down nearly 25 percent in 2007.

We are seeking out the letter sent by Drake to investors. If you have received it and would be willing to share it with us, please email us.

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Important: This fund is on our list of hedge funds that have "imploded" (see also ailing lenders). However, please note that "imploded" is a somewhat subjective. The "imploded" list contains hedge funds (or other unregulated and autonomous speculative investment funds) which have gone through some sort of permanent adverse change. This is a somewhat subjective call, and does not necessarily mean total shutdown or bankruptcy. It can also mean steep and rapid mark-downs in net asset value; or abnormal "bail-out" by corporate parents or peers in order to avoid write-downs and provide liquidity. The funds are of any type and sector.