Oct. 23 (Bloomberg) -- RAB Capital Plc, the hedge fund manager best known for its natural resources investments, may double Asian assets to $2 billion within a year, said Rod Barker, director of business development and distribution.

London-based RAB, whose shares trade on London's Alternative Investment Market, is opening its first overseas office in Hong Kong today. It's made two acquisitions in Asia in the past year. Barker said the company doesn't rule out additional purchases.

RAB is seeking to benefit from China's thirst for natural resources to meet demand in an economy that grew 11.9 percent in the second quarter. China is the world's biggest consumer of commodities including copper, cement and steel.

``Half of our assets are in natural resources investments and Asia is an incredibly important force in those returns,'' said Barker in an interview yesterday. ``China is such a huge consumer of commodities today.''

RAB, founded in 1999 by Philip Richards and Michael Alen- Buckley, managed $7.1 billion at the end of September, according to a regulatory filing.

Its $2.3 billion Special Situations fund, which focuses on making three- to five-year venture capital-type investments in natural resources companies, was ranked by Barron's as the best- performing hedge fund with an average annual return of 47.7 percent over a three-year period. RAB also manages energy funds, according to its Web site.

Asian Assets

RAB has about $1 billion of Asian assets, said Marc Popiolek, the company's London-based director of corporate affairs.

The firm acquired Northwest Investment Management Ltd., a hedge fund manager which focuses on Asian securities, in September 2006. Earlier this month it completed its purchase of Hong Kong-based Pi Investment Management Ltd., which had $209 million in assets and focused on equity investments.

Northwest invests in convertible bonds, equity options, local shares including yuan-denominated A shares traded in China, and Hong Kong-traded H shares of Chinese companies, Barker said. It uses over-the-counter derivatives to hedge its risks.

David Rogers, one of the two founders of Northwest, which manages about $800 million of Asian assets, and two other principals have relocated to Hong Kong from London. RAB's 20- person local office will also include 13 people formerly employed by Pi.

RAB launched an Asian fixed-income fund investing in sovereign and corporate debt in July. The $50 million fund has posted positive returns, overcoming the global credit rout triggered by defaults on U.S. mortgage loans to people with poor credit, Barker said.

The family of Lakshmi Mittal, India's richest man, is an investor in a RAB fund.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net.

Last Updated: October 22, 2007 22:28 EDT