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RAB Capital sees assets fall through performance and redemptions

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London-based hedge fund manager RAB Capital has reported at its annual general meeting that assets under management have declined to USD6.34bn at the beginning of May, as a result of the i

London-based hedge fund manager RAB Capital has reported at its annual general meeting that assets under management have declined to USD6.34bn at the beginning of May, as a result of the impact of difficult trading conditions on performance as well as investor redemptions.

The total represents a decline of 12 per cent since the beginning of this year and of 2 per cent over the past 12 months. However, the firm believes the strength of its balance sheet will help it to regain momentum once market conditions return to normal.

‘On March 14, when we released our preliminary results for 2007, we said the opening weeks of 2008 had seen a continuation of liquidity concerns, investor nervousness and high volatility for markets, presenting headwinds both for our investment strategies and for our distribution plans,’ RAB Capital said in a statement.

‘These challenging conditions have persisted over the first four months of 2008. The decline in 2008 reflects, in broadly equal measure, negative fund performance and net fund redemptions.’

The company says it expects earnings for the first six months of this year to be ‘significantly lower’ than in the second half of 2007 – although this is due in part to the fact that performance fees are mainly realised on December 31.

‘In current conditions, we remain determined to do all we can to protect our investors’ capital,’ RAB Capital says. ‘When conditions normalise, the strength of the balance sheet should assist us in taking the business forwards again.’

The firm was founded in 1999 and floated on London’s Alternative Investment Market in March 2004. RAB Capital currently manages 15 absolute return strategies, 13 single-strategy and two multistrategy, each with assets exceeding USD100m, as well as the AIM-quoted company RAB Special Situations.

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