Yet another hedge fund is facing a redemption crisis. The Financial Times reports that Drake Management has been hit hard by antsy investors and is facing some tough decisions. This is getting to be an old story, but the plot twist here is that Drake has sent letters to investors with a ballot asking them to vote to liquidate the funds, split the funds into various pieces, or ride out the storm. My guess is that management would like use the results to persuade investors to stick it out. The funds have met all margin calls. This really is a crisis of confidence. You can't blame investors for wanting their money back right now--even if it is irrational.

For more:
- here's the Financial Times article