RAB Capital sees 10% fall in share price as board member quits
Shares in RAB Capital, the listed hedge fund manager that fought the UK government over its privatisation of mortgage lender Northern Rock, fell by almost 10% in trading yesterday after one of its board members resigned unexpectedly.
George Philips, co-founder of the Asian hedge fund management firm that RAB Capital acquired in 2006, resigned from RAB Capital's board.
Philips' resignation took effect immediately, and preceded a 9.6% fall in RAB's shareprice from 44.25p on July 4 to close on July 7 at 40p. RAB Capital's shares had already fallen by 54.1% from 85p at the start of 2008.
Philips joined RAB Capital's board of directors last December, alongside Michael Alen-Buckley and Philip Richards, RAB Capital's co-founders; Stephen Couttie, RAB's chief operating officer; and Christopher De Mattos, also an executive director. RAB Capital's board also has five non-executive directors. It is not clear whether RAB Capital will seek a replacement for Philips.
While on the board, Philips continued to manage funds of Northwest Investment Management, the Asia-focused hedge fund manager he co-founded with David Rogers in 1998.
Philips will relinquish his chairmanship of RAB Capital Asia, the unquoted subsidiary of RAB Capital that employs about 15 people in Hong Kong.
He will continue to manage RAB Capital's five Northwest funds, which have about $500m in assets. These are RAB Northwest, which had about $470m in December and is down 6% year to date; RAB Northwest China Opportunities, which had about $155m in December and is up 7% so far in 2008; RAB Northwest Japan, which had $80m and has lost 13% year to date; RAB Northwest Warrant fund, which held $102m in December but had lost 49% in 2008; and RAB Northwest Global, which was launched in April.
All the funds except RAB Northwest Warrant and RAB Northwest Global are non-directional and focus on equities. The Warrant and Global funds are more directional.
Philips had about 9 million shares held in trust and vesting to him over the next four years as part of RAB's purchase of Northwest Investment Management. It is believed the terms of Philips' receiving the shares have not changed as a result of resigning from RAB's board.
RAB Capital manages about $6.3bn in a mixture of hedge funds and long-only portfolios. While this is a slight increase on the $6.2bn it managed on 1 May 2008, it is 12.5% off the $7.2bn it managed at the end of 2007.
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