Game Over RAB Capital: London's Once Star Fund Delists Following Terminal Deluge In Redemption Requests
RAB Capital, once the poster child of the London credit bubble, whose assets peaked at $7 billion in 2007, has seen its shares tumble over 30% in afternoon trading, following an announcement that the firm will delist after a terminal surge in redemption requests. From the FT: "RAB, which at the beginning of the year oversaw assets of just over $1bn – a far cry from its peak of $7bn in 2007 – has seen its remaining assets evaporate in recent weeks. Investors pulled $370m from RAB’s flagship $470m Special Situations fund last month when a three-year moratorium on withdrawals finally expired....Since then, clients – fearful of the RAB’s viability – have abandoned the company’s other strategies. The firm’s $120m Cross Europe fund has been swamped by redemption requests, say people familiar with the company. In addition, one of RAB’s remaining star money managers, Gavin Wilson, is to retire from the firm. Mr Wilson’s $250m Energy fund has been one of RAB’s best performing offerings of late." Well, if other, much better managed hedge funds are any indication, Mr. Wilson's Energy Fund likely got annihilated last week, putting the final nail in the 4 year public stint of this vehicle to bring leverage to leverage.
Among the other information disclosed by RAB is that the path for return to profit is impaired, and that following further deteriorations in trading, the company is reviewing all options.
The fund returned 46 per cent last year and 86 per cent in 2009. Mr Wilson’s retirement is likely to lead to significant redemptions, in spite of his co-manager, Mark Redway, remaining at the helm.
Mr Wilson was also in charge of the RAB Octane fund.
In a trading update on Wednesday, RAB said: “The board intends to review the options for the company, including the appropriateness of maintaining an Aim listing, and the possible use of the company’s surplus capital to provide some liquidity to shareholders.”
And so one more "hedge" fund proves that there is no such actual thing, but merely the aftereffects of riding on the coattails of one good trade, made at the right time and the right place. Everything else is a six sided die.