Had this on the watch list too long and could kick my own ass if it was possible. I think this is just the type of play needed on these markets along with Value shares such as Churchill China that I recommended yesterday.

Heres just a brief background on the company.................

Hedge fund leads rush to float
by Louise Armitstead
RAB Capital is the first to plan a listing in London. Others are bound to follow

IN the spring of 1999 Philip Richards and Michael Alen-Buckley arrived almost empty-handed at their new office — a small room in 1 Adam Street, just off the Strand in central London.
The day — April Fools’ Day — seemed apt at the time. Richards and Alen-Buckley, both highly regarded bankers at Merrill Lynch, were giving up stellar careers to start their own hedge fund, RAB Capital. The only money they had was their own, and their staff consisted of one manager, a compliance officer and a secretary.

Five years on, the little room in 1 Adam Street, still RAB Capital’s main trading floor, albeit straining under a vastly expanded workforce, is again the engine room of an ambitious and pioneering venture.

Last week RAB Capital became the first stand-alone hedge-fund company to announce its intention to float in London.

Richards, 46, and Alen-Buckley, 43, will be at the helm of a company with a market value that could be as high as 100m. Their stakes could be worth 30m each. Advised by KBC Peel Hunt, the firm will release a prospectus tomorrow revealing how much money it intends to raise.

In the past five years, Richards, a former army officer, and Alen-Buckley, who is the son-in-law of the hotelier Lord Forte, have increased their funds under management from 4m to an estimated 1.1 billion. They have 40 staff (16 of them managers), 7 hedge funds and a track record that is the envy of the City.

RAB’s first fund, the European equities fund, which was launched in November 1999, has made returns of 84% despite the tumbling markets.

Floating will for the first time allow small investors to take part in the success of a hedge-fund boutique rather than investing in one fund.

But there is growing concern that they will also be exposed to risks that at the moment are restricted to professional investors.

Watching in the wings are hundreds of other hedge-fund managers, salivating at the thought of following RAB to market and realising the value of their businesses. Investment bankers and advisers are also rubbing their hands at the prospect of a spate of similar deals.

Two funds earmarked for flotation are Thames River Capital and GLG Partners, one of the biggest hedge funds in London, with about $8 billion under management. Experts say plenty of others are looking to float as a way of cashing in.

Richards and Alen-Buckley dismiss the suggestion that this is their motive for floating RAB. “Right from the start we wanted to create a long-term business and we’re here to stay,” said Richards. “Floating is an indication of our permanence. Neither one of us will be taking cash out. We are also doing this for our staff. We have given them options over the years and this will be their chance to realise some cash. Staff loyalty is important to us and to our clients, who like the stability this offers.”

The cash raised from the float will also be used to launch additional hedge funds and bankroll the company’s rapid expansion.

Managers have already been hired for several new funds that will specialise in energy and in Japan. Small investors are likely to be attracted through a joint venture with Saga, which provides services for the over-fifties and has 7m customers.

Richards and Alen-Buckley built impressive reputations in the City working together in the late 1980s at Smith New Court, where they helped to build the stockbroker from a market value of 10m to one of 500m by the time it was sold to Merrill Lynch in 1995.

Both men had been watching the growing hedge-fund industry with interest. Alen-Buckley had numerous contacts, including leading figures such as George Soros. They spent four years at Merrill before quitting to set up RAB.

Alen-Buckley, who is taking the title of executive chairman, is described as the “public face” of the business. Richards, who goes from chief investment officer to chief executive, is more involved in strategy.

Richards runs the Special Situations fund, which is just over a year old but has already generated a return of 1,274%.

Since hedge funds are known for being opaque and secretive, observers are concerned that RAB will struggle to live with the scrutiny that comes with being a public company.

Richards said the company planned to float on the Alternative Investment Market (AIM) rather than the main market so that lengthy meetings with institutions could be avoided. “We want to spend our time managing the money, not talking about it,” he said.

“We have a simple philosophy. Our goal is to produce consistent returns in all market conditions. We think that if you work on managing the risks and reducing the downside, the upside tends to look after itself. The float is exciting but it will still be business as usual.”ENDS



Please DYOR, you are responsible for your own buying and selling timing actions.

cheers GF

GF, Thanks for jogging my memory on this one. It had been on my buy list after an article by Edmond Jackson last month. Some of his comments might be of interest.

"After studying the prospectus and visiting RAB's offices off the Strand, I detect more serious intent. I believe the management is determined to cut a sound and strong reputation, growing a substantive business. This is the crux of the investment rationale for RAB shares. ....

Until one sees what earnings RAB delivers over the next three years, the key judgemental issue is management. Although RAB appears early stage as a business, the fund managers involved (typically in their thirties and forties) all have extensive qualifications and proven records. Hence, I think it is a fair expectation they will attract sizeable funds - from a combination of institutional investors, high net worth individuals and RAB's marketing deal with Saga Investment Direct for the retail market.

The motives of Philip Richards, a joint founder with Micael Alen-Buckley are also a key ingredient. My impression is that Richards is not driven simply to make a lot of money. His reputation also appears vital to him, linked to creating a serious force in fund management showing how hedging techniques can deliver more consistent returns for retail investors......

Implicit in the decision of Saga to market RABs hedged funds would have been a 'due diligence' where Saga satisfied itself it was proceeding with a sound team that intends to be a leader in 5 to 10 years time....

..extra office space has already been developed. Further appointments of investment managers and support people are likely but in essence the team is in place. It is a fair expectation these talented people will continue to deliver and attract funds.

Thus, although a jump in pre-tax profit from 2.8 million (year to end-November 2002) to 10.6 million (13 months to end 2003) would have benefited from exceptional performance fees, I target profits progression. One can't he sure this happens in 2004, my threshold is a 2 year investment view. But on a three to five year view I can envisage a business worth some hundreds of millions of pounds."

Hope this is of some interest. Jennifer

Hi Jennifer, thanks for that piece have to say it was just that item that alerted me to the potential of the stock aswell. I wish I had got in then at that time but I still think this one will soar. Hoping to build up a big position in this one. Difficult to get newsflow from a hedgefund but now it as floated it will have to post via RNS. I think the more investors get to hear of this one the further north it will go. Good luck.

cheers GF.

I see the IC are backing this one this week aswell...........


INVESTORS CHRONICLE

Six of the best AIM newcomers:
*RAB Capital (RAB.L) - Moneybox (ATM.L) - Torex Retail (TRX.L) - Offshore Hydrocarbon Mapping (OHM.L) - European Nickel (ENK.L) - Omega International (OME.L).

cheers GF.

Hi Goldfinger...ref RAB involvement in AFE , would you hope that AFE could move forward as have others...they have struggled bit recently although I guess it was to be expected as they have been unable to do much mining until end of April rainy season...however is there also a danger that you being in both RAB and AFE means that you have a doubble bubble and hence either a double win or in worst case a double loss...rgds...buckets

Thanks for some outstanding research into a much undervalued company. Very promising and i bought a few RAB on Friday.

Cheers Hawick. Buckets there always going to be the chance of burst bubbles thats what makes this business so exciting to me. Its a case of limiting the downside and going for the upside, please dont forget RAB is not just looking after mining stakes. Its a mixture of funds and because of the nature of hedge funds its difficult to get at just what they do invest in. Now RAB as floated it will have to be more open and has to a certain extent refering to the new funds it will take on board please see posts above.

I still think that the Mining Boom as a LOT further to go, inflation in the US and UK will be the driver of that. Good luck.

cheers GF.

From todays Sunday Telegraph and from Edmund Jackson.


Curb the doubts, some mines are nuggets of value

Mark Twain is often quoted by cynics as saying that a mine is "a hole in the ground with a liar standing beside it".

But while you should never discard a sense of scepticism about investment, if you had been too dismissive recently, you would have missed some mouth-watering returns in the mining sector.

So what has been happening to send mining shares soaring and has the trend further to go?


Click to enlarge
The potential was established a few years ago when central banks printed money to combat the risks of deflation. That helped to boost the price of gold and other commodities, and more recently the latter have benefited from economic growth, especially in developing countries.

Enter RAB Capital, a generalist hedge fund group that has revolutionised the Aim market in mining stocks. Its strategic move is already a classic of investment history, and a 1,274 per cent gain for its Special Situations fund last year shows the merits of a flexible approach. (These were some of the factors that convinced me to buy RAB shares, which are also now listed on Aim).

Exploiting the macro-economic trend, RAB also bridged a gap in the financing of smaller miners. Its equity was instrumental in giving banks the confidence to lend, thus creating a virtuous circle. Mining companies could invest to seize the upturn.

A booming Chinese economy has also helped, with demand for raw materials pushing up metal prices and therefore mining shares. I am wary, for as an economics student I learned how capricious trends in the Chinese economy can be. Upsets occur despite the image of strong growth.

Besides being tied to the health of the US economy (which is China's principal export market), there is a risk that continued foreign investment in China will result in overcapacity. That would hit raw material prices and thus mining shares.

Despite risks along the way, the momentum appears strong. In terms of the party for miners - commercially and in the stock market - we may only be at about 10pm.

Anglo Pacific shows how good governance and being a director of a mining company need not be a contradiction. The consistent growth chart reflects a well-run business.

A shareholder in Anglo Pacific told me to take a closer look when the price was only 14p. It was the emotional baggage typically associated with mining shares that discouraged me from buying.

The company is in the classic mould of a mining finance house, taking pro-active investment stakes. In recent years this strategy has grown pre-tax profit from a small base to 4.1m, with a yield of about 4.5 per cent at the current share price of 55.25p.

Yet the two executive directors have not been given big pay and share options. The 2002 annual report showed individual salaries of about 48,500 and bonuses of 40,000 each for 2000 and 2001 while contributions to their pensions were minimal. Each executive director had less than 1m share options, exercisable at about 21p.

Their prosperity is directly linked to the returns enjoyed by investors as they each hold over 3 per cent of the equity. I doubt the 2003 annual report will show big increases in their packages. So much for boards who say big pay and options are the only way to motivate!

The prelims showed a fall in operating profit from 5.2m to 2.6m due to the group's Australian interests mining coal on government rather than private land with lower royalties. The results should improve this year, aided by coal prices rising in the Far East. I recognise the risks but long-term the region is a dynamo.

The company holds a variety of other stakes in the Far East as well as in Canada. I think it has further upside potential, so long as one appreciates it is also geared to the fortunes of the commodities cycle.

Peter Hambro Mining, which operates mainly in gold in far eastern Russia, is another example how a combination of integrity and the ability of key personnel has delivered excellent progress. I don't like to be shown the chart because it reminds me of a golden opportunity missed.

I am learning that in the quoted resources sector there are rivals and malcontents who sow doubts. It is best to form your own judgment and not consult many others. Hambro went to a lot of effort to help me understand its operations yet I allowed myself to be swayed by scepticism.

Griffin Mining has become a favourite on Aim this year, with its shares rising from 17p to test 30p. Its prospects were bolstered in February by an RAB-backed 8.75m placing to help development of the Caijaiying zinc-gold project in China. It is estimated to have reserves worth $1.5bn (833m).

As with Anglo Pacific, it intrigues me how a small company such as Griffin is progressing nicely under an executive chairman. Corporate governance rules prescribe a split, with a chief executive and non-executive chairman.

Indeed, investors in all sizes of company have learned bitter lessons about a concentration of power. But for small companies an executive chairman is sometimes better. It puts the onus on investors to judge the boss's capability and integrity, which is no bad thing.

Griffin's chairman has publicly expressed the company's "faith and long tenure" in China. As with Peter Hambro Mining in Russia, good local relations are a key to long-term success. So far the joint venture at Caijaiying is the only foreign mining venture to be granted a base metals extraction licence under Chinese mining laws. Production is targeted to start in the second quarter of 2005.

Ocean Equities, Griffin's broker, anticipates annual pre-tax cash flow of about $25m (13.9m) at current zinc prices, once mining reaches 500,000 tons a year. At 26.75p a share, Griffin is capitalised at 43m.

I recently calculated a fair value to be about 30p a share, though I could well be conservative. I like to identify a margin of safety in a share, and in a higher risk industry/country this should be a thumping margin. But to play mining shares well, perhaps I should relax this constraint - so long as the underlying trend is firm - and recognise this sector always has an element of speculation.

Griffin seems an attractive long-term play, so long as one appreciates the potential for bumps along the way. If the Chinese boom slows, that could mean a sell-off among miners eventually, with smaller company shares vulnerable. Yet Griffin looks set to progress commercially.

The outlook for zinc prices is fair and the geological fault system at Caijaiying also has good upside potential as a gold resource.

Asia Energy, which is floating on Aim, is another group where RAB Capital's Special Situations hedge fund is investing more money. After full due diligence, the fund initially backed the company with private equity. All this is interesting for long-term prospects because venture capital money normally exits on a flotation. About 15m is being raised at 75p a share.

The group's 100 per cent-owned Phulbari project involves developing an open pit coal mine and power station in Bangladesh, and is of major importance to that country's economic development. A feasibility study is likely to take at least 18 months but management is confident and well organised locally.

Phulbari is in northwest Bangladesh, 30 metres above sea level, and not subject to seasonal flooding, unlike large areas of the country.

On a long-term view, Asia Energy is interesting. It's hard to say if there may be a better chance to buy, say in about nine months' time. Dealings start on Aim tomorrow.ENDS.

I hold stock in both Rab Capital and Anglo Pacific, I rate RAB the better investment but both in my opinion are top notch.

cheers GF

Interesting article - thanks GF. I shall definitely add some RAB to my portfolio.

Yes, have a few too as unmargined real equity and may well add to them

PS, can we just keep to ONE thread on RAB (he said nicely) as it will make it easier for us all to evaluate the share and company

Missed this one friday must be slipping. The saturday mail brought it to my attention...............

Cambridge Mineral Resources PLC
16 April 2004

Cambridge Mineral Resources plc ('the Company')



Holding in Company



The Company was notified on 16 April 2004 that RAB Capital plc, acting as
investment manager for a number of co-mingled funds, had acquired on 14 April
2004 a further 2,325,018 ordinary shares in the Company.



RAB Capital plc's notifiable interest is thereby increased to 32,211,783
ordinary shares, representing 23.8 per cent. of the issued share capital.



The notification went on to state that RAB Capital does not act as custodian for
its clients and therefore the shares are registered in the nominee name of the
custodian of its clients, Morstan Nominees Limited.


This information is provided by RNS
The company news service from the London Stock Exchange



Certainly an excelent company to increase your stake in as Cambridge have had a positive drilling update from their Lomero Poyatas project in Spain.

Things just get better with RAB Im going to have more of these in the morning.

cheers GF.

With all the posts all over the internet on Aimquoted, Sharecrazy, MoneyAM, this weekend do you think some holders might be tempted to take a profit after it's recent run?

Looks like it might be overdue a bit of profit taking.

Excelent looking chart.




cheers GF.

Lets just have a look at the other hedge fund group listed on the market and see how it as performed since floating, ie MAN Group EMG.




Well as you can see thats one heck of a performance and in all market conditions especially the Bear market which started approx March 2000, no wonder Edmund Jackson is a share holder in RAB and says he sees RAB as a company worth some hundreds of millions of pounds in a few years.

cheers GF.

Moving along nicely this morning up around 9%.



cheers GF

News just in RAB increases its stake in Cambridge Minerals to 26%.

Cambridge Mineral Resources PLC
19 April 2004



Cambridge Mineral Resources plc ('the Company')
Holding in Company



The Company was notified on 19 April 2004 that RAB Capital plc, acting as
investment manager for a number of co-mingled funds, had acquired a further
2,900,000 ordinary shares in the Company.



RAB Capital plc's notifiable interest is thereby increased to 35,111,783
ordinary shares, representing 26.0 per cent. of the issued share capital.




This information is provided by RNS
The company news service from the London Stock Exchange




cheers gf.

GF
Bought in first thing this morning and looking good already. Thanks!

Me too Goldfinger, thanks for the tip

Just added my 5th tranch today at 56p. Dont think we will see these prices again. Building up a big position.

cheers GF.

Moved up at the very end of the day. An excelent day in lousy markets.

cheers GF.

Motoring again this morning bid offer now 60p 62p, its going to a quid quick time.

And we have more news.........

RNS Number:7713X
RAB Capital plc
20 April 2004

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, INTO OR FROM THE UNITED STATES,
CANADA, AUSTRALIA, REPUBLIC OF IRELAND OR JAPAN

20 April 2004RAB CAPITAL PLC ('RAB CAPITAL')

RECOMMENDED OFFER BY KBC PEEL HUNT ON BEHALF
OF RAB CAPITAL FOR I2S PLC ('I2S')

Offer declared unconditional in all respects

On 15 April 2004 the board of RAB Capital announced that the Offer had become
unconditional in all respects subject only to the admission of the New RAB
Capital Shares to AIM becoming effective ('Admission'). Admission became
effective at 8.00 a.m. today and accordingly the Offer is now unconditional in
all respects.

As RAB Capital now either owns or has received valid acceptances in respect of
in excess of 90 per cent. of the I2S Shares to which the Offer relates, it
intends to commence the necessary procedures under sections 428 to 430F of the
Companies Act 1985 to compulsorily acquire any outstanding I2S Shares to which
the Offer relates and in respect of which valid acceptances have not been
received.

I2S will today apply to the London Stock Exchange for the cancellation of the
admission to trading of I2S Shares on AIM. It is anticipated that such
cancellation will take effect from 8.00 a.m. on 19 May 2004.

A resolution will be proposed to re-register I2S as a private company under the
relevant provisions of the Act as soon as practicable after such cancellation.

As already stated, the Offer will remain open until further notice.

I2S Shareholders who have not yet accepted the Offer are urged to do so as soon
as possible. I2S Shareholders who wish to accept the Offer should complete the
Form of Acceptance enclosed with the Offer Document and return it, together with
supporting documents, to the Receiving Agent, either by post or by hand to
Computershare Investor Services PLC, POBox 859, The Pavilions, Bridgwater Road,
Bristol BS99 1XZ or by hand (only during normal business hours) to Computershare
Investor Services PLC, 7th Floor, Jupiter House, Triton Court, 14 Finsbury
Square, London EC2A 1BR as soon as possible.

Expressions used in this announcement shall, unless the context otherwise
requires, bear the same respective meanings as in the Offer Document posted to
I2S Shareholders on 17 March 2004.

Enquiries:

KBC Peel Hunt Ltd
Tel: 020 7418 8900
Simon HayesJonathan Marren

cheers GF.