LONDON | Wed Mar 16, 2011 7:04am EDT
LONDON (Reuters) - RAB Capital saw losses almost treble last year
after assets fell further, highlighting the hedge fund firm's
struggle to recover from a client exodus during the credit crisis.
The group, which warned in September that full-year results would
miss expectations, posted a pretax loss for the year to end-December
of 20.2 million pounds, compared with a loss of 6.9 million pounds a
year ago.
"Our results for the year are not satisfactory," Chief Executive
Charles Kirwan-Taylor said in the results statement.
Assets under management fell to $1.06 billion in December from $1.35
billion a year before, after the firm closed five funds and one
European bank pulled out money from RAB's fund of funds.
However, RAB saw "modest" inflows into its remaining funds towards
the end of the year.
RAB had managed around $7 billion at the end of 2007.
The firm also faces the prospect of losing more clients as a
three-year lock-up on its troubled Special Situations fund comes to
an end later this year. This fund bought into Northern Rock before
the lender's collapse and also invested heavily in unlisted
securities, many of which proved difficult to sell during the crisis.
RAB's Prime Europe UCITS fund, the first in a range of European-based
portfolios it is launching to try and attract new clients, "had a
quiet launch" a month ago, according to Kirwan-Taylor, who declined
to say how much it had raised.
RAB's difficulties in attracting back clients since the crisis chime
with the experience of Man Group (EMG.L), which in January posted
further net outflows.. The wider industry saw $55 billion of net
inflows last year, according to Hedge Fund Research.
Last year, RAB's Energy fund rose 46.6 percent while its Global
Mining and Resources and Octane funds were also up, helped by surging
commodity prices, although Special Situations fell a further 7.6
percent.
The firm took a 3.5 million pound restructuring charge, which
included cutting staff numbers by more than 30 percent to around 70
after it became "apparent to us that a quick return to organic growth
in our business was unlikely", the firm said in the statement.
Kirwan-Taylor told Reuters the cuts would not affect performance from
its remaining funds.
"We are optimistic about the prospects for the group in its current
form," he added.
In December, RAB said it had taken on two fund managers and a
long-short equity fund from rival Park Place Capital.
Source: Reuters.Com
