The downturn in the global markets has led to significant losses at two major investment operations on the Island.

Bermuda-based hedge fund operator Everest Capital Ltd. has so far lost about $1.3 billion of the $2.7 billion it managed at the beginning of the year.

And New York-based Oppenheimer & Co., Inc. has had to close down its Bermuda operation. Three funds previously managed from the Bermuda office are now being managed from New York, according to Oppenheimer spokesman John Ryan.

The three funds are Mid Ocean Partners L.P., Oppenheimer Emerging Markets L.P.

and CIBC Oppenheimer Emerging Markets International II.

Mr. Ryan said the office was closed down solely because fund manager Dr. Chris Bremner had resigned. Jeff Connor and Bermudian Brian Way, who was believed to be head trader, were let go when the office closed.

"The sole reason for the existence of the Bermuda office was because of Dr.

Bremner,'' Mr. Ryan said. "When he resigned we closed down the office.'' The spokesperson referred The Royal Gazette to the head of asset management responsible for the funds to get information on their losses, however the person was away from his New York office on Friday.

From information provided by other investment analysts The Royal Gazette understands Oppenheimer's emerging market funds lost about $700 million in value in the year to date. Like Everest the funds were principally hurt by investments in Russia.

One fund is thought to have lost between 60 to 70 percent in value in the year to date.

Meanwhile, the Wall Street Journal reported on Friday that emerging markets-based Everest Capital Frontier Fund value had fallen by 52.4 percent in August and 68 percent on the year. The Everest Capital Fund had lost 42 percent of its value through August.

Everest spokesman Tim Mistele told The Royal Gazette the company was in no danger of collapsing despite the over $1 billion in losses. He said the funds held over $500 million in cash, about 40 percent of their holdings, and were not leveraged as others in the market were.

"Clearly we had a disappointing year,'' he said. "We continue to invest prudently using the strategies that have worked for us over the past eight years.'' He said the company believed that holding large amounts of cash was a good strategy in the market right now because leveraged funds would eventually be forced to sell off their holdings cheaply to meet debt obligations.

Everest will then have an opportunity to pick up some good values on the market.

In contrast to Everest, Oppenheimer's funds reportedly were leveraged. That's one reason given as to why the fund bailed out of Bank of Bermuda stock in August. Because Oppenheimer needed to cover its positions, fund managers sold holdings of 453,652 shares in one block at a heavily discounted $27.50 to raise about $12.5 million.