RAB profits to drop as assets dive 12%
UK-quoted hedge fund manager RAB Capital expects its profits for the first half of this year to be "significantly lower", after assets under management declined 12% in the first four months of the year on the back of fund redemptions and negative fund performance.
As of May 1, RAB managed assets worth $6.3bn (€4bn), down from $7.2bn at the end of December. This decline reflects negative fund performance and net fund redemptions in broadly equal measure, the company said in a trading update. Over the past 12 months, assets under management have increased 2%.
RAB's flagship Special Situations Fund, managed by Philip Richards, was down 13.12% for the year to the end of March, according to investors. A stake in troubled UK lender Northern Rock accounted for about 2% to 3% of the special situations fund, as of the end of December last year.
"The opening weeks of 2008 have 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, " the company said when it released its preliminary results in March.
RAB today referred back to its earlier statement, adding: "These challenging conditions have persisted over the first four months of 2008. [...] When conditions normalise, the strength of the balance sheet should assist us in taking the business forward again."
RAB shares dropped 9.3% to 56p by 11:05 GMT today from Friday's close. The stock has declined more than a third so far this year.
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