RAB Says Clients to Pull 79 Percent of Flagship Fund’s Assets

RAB Capital Plc (RAB) said investors will pull about 79 percent of assets from its biggest hedge fund, leaving the Special Situations Fund with less than $100 million.

The hedge fund will allow investors to withdraw money when a three-year freeze on client redemptions ends on Oct. 1, the London-based firm said in a statement today. The fund, run by co-founder Philip Richards, had $2 billion at December 2007.

The fund slumped 73 percent in 2008, hurt by a bet on Northern Rock Plc, the first British bank nationalized during the credit crisis. RAB won investor approval to halt redemptions in September 2008. The fund declined 7.6 percent in 2010.

“We made mistakes in the run-up to the crisis and that has been a chastening experience,” Richards said. “To meet our obligations, we have been managing the Special Situations portfolio for liquidity at the expense of performance.”

RAB will keep the fund open and has changed its focus to invest in natural-resource companies that are publicly traded, according to the statement. Richards will continue to manage the Special Situations fund. The firm’s total assets under management have fallen 85 percent to $1.06 billion since 2007.

To contact the reporter on this story: Jesse Westbrook in London at jwestbrook1@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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