Drake Pulls The Plug On Remaining Hedge Funds

Jun 5 2008 | 2:00am ET

Drake Capital Management is getting out of the hedge fund business, for now.

The New York-based firm, which in April announced that it would liquidate its flagship hedge fund, said Tuesday it will do the same with its other two hedge funds. But it is moving forward with plans for new hedge funds, which will begin fundraising later this year.

The decision to wind down the Absolute Return Fund and Low Volatility Fund is not unexpected: The firm said it would consider “substantially similar” options for those funds as for its closing $2.5 billion Global Opportunities Fund.

Drake said in a filing with the Irish Stock Exchange that its funds are “well-positioned to avoid forced sales.” The firm will begin to sell the hedge funds’ assets, making a first distribution at the end of the month. Most of the money is expected to be back in investors’ pockets by the end of the year, and the liquidation completed by the end of March 2009.

Most of Drake’s hedge fund investors—the firm also runs several billion dollars in long-only funds—were already heading for the door, forcing the firm to suspend redemptions in December after disastrous year in which its funds suffered double-digit losses. Global Opportunities has lost a further 5% this year, and Absolute Return, which manages $1.4 billion, 12%, according to Dow Jones Newswires.

Despite the setback, Drake plans to move forward with plans to launch a new group of hedge funds. In April, the firm said its new Absolute Return Fund had already garnered more than $300 million in commitments. The firm said it will launch other new funds with “substantially similar” strategies to those of the closed funds.


Drake To Liquidate $2.5 Billion Flagship
Drake Asks Investors: Should We Liquidate?
Drake Puts Brakes On Redemptions After Big Losses

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...