Another One...

Drake Management LLC, the New York- based firm started by former BlackRock Inc. money managers, may shut its largest hedge fund after a 25 percent decline last year, according to a letter to investors.

Winding down the $3 billion Global Opportunities Fund is one option being considered by Drake ``in an attempt to maintain and maximize value for investors during this period of severe market downturn and contraction of liquidity,'' the letter said.

Drake, which had blocked most redemptions from the fund in December, is reviewing other options, including allowing investors to get their money back over the next 18 months or to move their assets to a new fund. Drake, which managed $13 billion as recently as the end of the year, is considering similar steps for its two other hedge funds.

Hedge funds with more than $5.4 billion have been forced to liquidate or sell assets since Feb. 15 as contagion from the U.S. subprime slump spreads for a seventh month. Others include Peloton Partners LLP's $1.8 billion ABS Fund, Tequesta Capital Advisor's mortgage fund and Focus Capital Investors LLC, which invested in midsize Swiss companies.

Shawn Pattison, a Drake spokesman, declined to comment.

Drake was founded in May 2001 by Anthony Faillace, chief investment officer, and Steve Luttrell, chief operating officer, who both previously worked at New York-based BlackRock and Pacific Investment Management Co. of Newport Beach, California.