RAB Capital seeks new staff despite asset tumble
London-based RAB Capital is understood to have spoken with a number of fund management teams with a view to recruiting staff for its hedge funds, and has provided new incentives for existing senior managers to remain with the firm.
It is believed RAB has not found a suitable team to hire yet, according a source familiar with the group's plans, however its search reflects a long-term optimism about its prospects as it gave two senior managers options over its stock earlier this week.
The options granted to new chief executive Stephen Couttie and chief investment officer Charles Kirwan-Taylor vest over three to five years, according to a regulatory statement from RAB Capital.
RAB declined to comment on its hiring plans.
Dow Jones newswires reports that RAB Capital said RAB's assets under management fell nearly 74% in 2008 as private and institutional investors deleveraged because of the credit crisis, and added that the next few months will continue to be challenging.
Assets were $1.9bn (€1.4bn) at the end of 2008, down from $7.2bn a year earlier, in line with the company's announcement on November 14. It said the figure includes approximately $570m worth of cash locked up for more than a year.
The results come a week after larger rival Man Group said that its funds under management fell to $53.3bn in December, down 21% from $67.6bn at end-September.
Investment bank Credit Suisse said that ongoing outflows from the hedge-fund industry are part of an overall pullback by investors. Credit Suisse estimates the industry has seen withdrawals of $160bn to $200bn in the last quarter of 2008.
RAB Capital chief executive Stephen Couttie said: "After a very challenging year RAB has been able to maintain its balance sheet strength through positive operating cash flow. We expect that continuing market dislocations will bring further challenges in the early months of 2009 and it is too early to comment on the outlook for the year as a whole."
At 09:16 GMT, RAB shares were unchanged from Tuesday at 9p. The stock has fallen around 87% from a year ago. Meanwhile, the FTSE100 index was down 1.4%.
The company said it expects its 2008 operating profit before tax and items to meet expectations because it managed to cut administration costs to £40m from £86m (€91.4m). Its aggregate management and performance fees are estimated at £51m, down from £125m in 2007.
However, it also expects to book an impairment charge after the market decline hit its available-for-sale assets, and for goodwill write-downs on some acquisitions whose assets have since declined. It will take a restructuring cost of no more than £4m after it reduced its product range in response to the market crisis.
Still, the company generated positive cash flow during the year. It had more than £110m of net current assets at the end of the year, of which about 5% was in cash.
An analyst, who declined to be named, said RAB's trading update was in line with expectations. He noted that the company expects to take an impairment charge for 2008. The analyst said this could lead to major losses in 2009.
He also said the company's update didn't give a lot of detail on its outlook for the business.
In its statement, RAB also named Charles Kirwan-Taylor as its new chief investment officer. Kirwan-Taylor has been part of the company's board and was responsible for marketing.
It also hired John Mattimore as chief risk officer. RAB said Mattimore is an experienced buy-side risk officer, recently holding positions in Gartmore and Old Mutual Asset Management. In November last year, RAB closed several funds in response to the collapsing markets and the credit crunch.
The company will announce its 2008 results in late March.
Steve McGrath from Dow Jones Newswires contributed to this article.
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