Drake Management’s founders, Anthony Faillace and Steve Luttrell, have the pedigrees that go over well with investors. Both hail from BlackRock, and before that, Pimco. After a stellar 2006 for their largest fund, Global Opportunties, a global macro player, 2007 a large increase in assets under management was followed by a dramatic reversal, The fund is down 23.7% this year, and as a result, the managers have restricted redemptions.
Note that this is not Drake’s only fund; the firm manages $13 billion. But its multistrategy fund, the Absolute Return Fund, a os dpwn 11.5 percent in 2007 through November.
Drake Management LLC suspended most redemptions from its largest hedge fund after losing 23.7 percent through November, according to a letter sent to investors of the New York-based firm.
Drake will meet about 25 percent of requested withdrawals from its $3 billion Global Opportunities Fund, which tries to profit from macroeconomic trends by trading bonds, stocks, currencies and commodities. The letter didn’t disclose how much investors had asked to withdraw at the end of the year.
“This decision was made only after we attempted to convince redeeming investors to voluntarily rescind their redemption requests,” said the letter, signed by Drake Management and sent out today.
The partial redemptions were made possible by an agreement with Drake’s banks, the letter said. The firm’s lenders would have been allowed to terminate transactions and seize collateral if net assets had fallen by 30 percent….
The firm’s assets more than doubled this year, after the Global Opportunities Fund advanced 41 percent in 2006. At the end of 2005, assets were $2.5 billion. This year Drake opened research offices in Miami, Sao Paulo and Istanbul.
The Global Opportunities Fund, managed by Faillace, has returned 13.4 percent a year on average since beginning trading on Nov. 30, 2002. That compares with a 13.1 percent gain by the CSFB/Tremont Global Macro Index.