EBF & Associates of Minnetonka, Minn. is liquidating its flagship $670 million market neutral fund, Lakeshore International, which invests in convertible bonds.
Only last year, Lakeshore International had $900 million under management. But poor performance and redemptions shrunk assets, as some investors voiced concerns over the return potential of the wider convertible-arbitrage arena for the immediate future. The fund was down just over 6% through mid-year 2005 and was down last year. That's in contrast to posting an average annualized return in excess of 10% over its nine-year run.
The firm will remain open, having an additional $1.5 billion