• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

oh dear: RAB Capital shuts 12 hedge funds as assets flee

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    oh dear: RAB Capital shuts 12 hedge funds as assets flee

    RAB Capital shuts 12 hedge funds as assets flee
    Miles Costello

    RAB Capital today shut down 12 underperforming hedge funds as it gave warning that a surge in investor redemptions and sliding markets would leave it with just $2 billion of assets to manage by the end of December.

    The closures mean that the London hedge fund manager will have shut down about a third of its portfolio, worth around $250 million.

    It also means RAB will have lost almost three-quarters of its total managed assets, which stood at $7.2 billion at the end of last year. It managed $2.8 billion at the beginning of the month.

    As part of its retrenchment, RAB also said it was abandoning a plan to build up a business to cater to individual hedge fund investors.

    Stephen Couttiee, RAB's new chief executive, said: "We have taken the necessary action to focus the business and reduce its scale of operations in the context of extremely difficult conditions throughout the industry."

    RAB shut three funds, described as "sub-scale", as part of the decision to drop the plan to target retail investors.

    It closed other, smaller hedge funds, unlikely to achieve critical mass in current market conditions. These included its one fund with exposure to Lehman Brothers, the collapse Wall Street bank, RAB said.

    RAB also said it plans to close three out of the five fund of funds - or pools of hedge funds - that it runs.

    RAB shares rose 1.48p to 8p.

    Hedge funds have been battered by unprecedented market turmoil since the demise of Lehman and the US Government bailout of AIG, the insurer.

    Panic-stricken investors have rushed to withdraw their assets as hedge funds have imposed lock-ups aimed at preventing fire-sales and heading off the risk of collapse.

    RAB's investors have agreed to lock in to the Special Situations fund, its highest profile investment offering run by Philip Richards, the former boss.

    It has also restructured its Energy and Octane funds.

    RAB insisted today that its balance sheet was strong, with assets of £106.7 million, including £53 million in cash.

    It said it was prepared to reinvest in its existing range of funds where necessary and was still prepared to set up new funds if the opportunity arose.

    -----

    Question - why is it they have got at least 12 (!) funds instead of having just one called "RAB Capital Hedge Fund"? Presumably they have got more than 12 as they are closing 12, I guess they have got a lot more of hedge funds all presumably ultimately owned by the same company. Does anyone think those hedge funds won't cooperate on shorting of same targets? Technically it will be different companies. This setup smells of bulltulip and market abuse

Working...
X