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

lol goldfinger :D

Hey check your PM on SC :)
Cheers

Looks like a bit of a spike before the resumption of the fall, didn't buy chaps, did you sell before it's too late, could always try first thing Tuesday.

Something about Hedge Funds & the FSA investigating in the FT today anyone know what was said?

Thirdeye,

here's the link;


http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1083180211280&p=1012571727085


FSA look to be on a fact finding mission, doesn't look anything more than that to me.

Please read the BearBull topic in this weeks investors chronicle , he thinks they are an essential part of any investors portfolio.

O/T Thirdeye I hear you lost around circa of 13,000 in Ashpool on Ofex on results thursday,small beer to me but, do you feel gutted??????????????.

cheers GF

Good post bb BB Muppet on another board:

The thing that baffles me is that if The Special Situations Fund had roughly US$187m P/O US$1.10 billion 1st January 2004, ie 17% of FUM and presumably, and I guess as best performing fund presumably represents at least 17% of US$1.60 billion per 1st April 2004, presumably US$272m, is to how they justify taking positions it appears of up to US$10m per position (roughly I guess around 3.6765% of SSFUM) in illiquid exploration stocks which could be a total loss at any given time ie due to illiquidity of asset class an asset class where as far as I can see it is impossible to have a stop loss set on a position of size.

How can RAB Control the BRE-X type melt down aggregation of exposure?

I can see hedging commodity prices via futures put and call contracts, but I can not see that mining equities per se directly follow the underlying commodity prices least of all in non mining countries like UK where little mining knowledge really exists, least of all in EC1,2, 3 (or The Strand it appears), this is also massively effected by seasonality of mining market financial years eg USA/Canada 31/12, SA 28/02, UK 05/04, Australia 30/06 Tax Selling to close, plus basically the relevance of this in gambling on illiquid MINEX equities and the volatility in investor sentiment this entails.

I really can not understand at all where RAB get the Capital to support such positions and wonder if they are utilising multiple funds to take these huge positions creating massive aggregation exposures both intra fund per Company invested in, and even worse still massive Country aggregations noting for example the Plethora of massively overvalued equity valuations in certain cases eg Russian Gold stocks listed in the UK, Canada and USA.

The real exposures to a meltdown in mining markets, individual or across the board commodity prices or aggregate political risk country exposure remind me of a stack of dominos teatering on the brink.

It strikes me for example that a huge part of RAB is one huge mono directional bet on China and continued GDP Growth and commodity demand, a weak US Dollar, and interest rates not going up.

All IMHO, NAG, DYOR etc, etc

Thirdeye - do you understand any of that? You seem to have just copied and pasted.

Can i just ask the reason for your presence here? You dont seem to hold a position. Are you taking a course in learning how to play the stock market? And expecting us all to teach you??????????????

Invisage what I do understand is that negative comment on this share upset you so much that you resorted to calling me a t*** & a c*** , now why do you get so upset at negative comment, not very reasoned & constructive is it....or perhaps you think it is?


Btw ??????????? is a familar trade mark of another poster, just as a matter of interest of course......I wonder why they feel the need to announce pm sent to each other on various boards....a decoy maybe?

Mining stocks have had their bubble this was issued at 25p just one month or so ago a fair price at the time, some investors have bought on the isolated increase of 1200% performance of just one fund, the average performance strangely enough wasn't mentioned and still hasn't been.

it's at as 100% premium on the back of such a performance of conditions that have been right (why do you think they floated, at the best time or worst time?)

Now did the bubble go on forever, were those valuations right? Looks like the dollar is gaining strength now 1.77 from 1.94 & gold is losing ground, maybe the hype has been very much misplaced.

Third eye on a different topic, reading through the JCR thread you used to be a fan, what is your opinion of jcr after the results on thursday i would be gratefull if you could have a look at the results and comment.TIA

"Mining stocks have had their bubble". Dont think so thirdeye, I expect them to rise to new heighs in a months time when we have all the interest rate rises out of the way across all the economies.

Inflation causes speculators to dump cash and move into gold. By the way Rab isnt a one trick poney gambling everthing on metals, you should do your home work and get a prospectus.

Time will tell.

cheers GF.

goldfinger
PM at SC - cheers :)

Sigora, Never been a fan of JCR goldfinger & hawick were claiming (on different boards under different usernames) profits of 1m likely, for the year just ended, which even if the book fiddling hadn't gone on wouldn't have been acheived, just shows what a ramp it was, pretty much in my opinion the same as RAB is. (my recomendations at the time if you want high gearing but less risky were Cape @ 23p, now 90p & after that Britannia on ofex at 9p now 41p up 355%)


It could work out ok, but I still see it walking a tightrope, a bad debt by a fleet here or there, could spell much difficulty imo, that's not to say it won't acheive paying it's debts it might, but an uphill struggle in my opinion....I still won't punt on it, because of the heavy gearing.

Thirdeye

you spend an awful lot of time calling people rampers, how much do they pay u ?

Page 56 Daily Mail today

Warren Buffet slammed hedge funds, describing them as a 'fad'.

Cheers Thirdeye.

A pile of poop, ramped up to the skies just like JCR, DART, BPRG,BEMA and what was that other gold share that went nowhere - apart from Thistle Mining - and goodness knows how many others. I'll get back to you about that other gold share, the name escapes me for the moment. It got ramped to the heavens by GF/Slater/Oliverleftwingtwit/ before it got listed on AIM.

KBC Peel Hunt, initiated coverage of RAB CAPITAL saying the hedge fund manager should be supported by strong fundamentals.

Traders speculated the group may also have good news in the offing.ENDS.

Great to know that George Soros, thinks that hedge funds are the future of ALL markets.

cheers GF.

In fact a BUY note gone out on RAB.



Group Captain
Member # 4596
posted 30 April 2004 16:19
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BUY NOTE FOR RAB : http://www.kbcpeelhunt.com/pdfs/RAB28Apr04.pdf
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| IP: Logged

cheers GF.

Oh 2 posts on the Buy note. Buy note or not can't even hold onto a 0.5p rise on the back of them, once the peelhunt boys have stopped supporting it for today, I suspect it's going to find it's true level as opposed to hyped one.

Now just 0.25p up despite a 50 pt rise in the market.

Good to see real analysts having a different view to Scottie and his chum. As for Buffet some of his calls have been ropey recently, losing his touch. Not as poor as Third Eye's, but ropey nonetheless, Buffet's tend not to go bust.

Scottie you missed DATA, SCD and CDW(the last named quadrupled) among many others (oh of course, they've all gone up).

Four of top six FTSE risers today mining stocks, the obituaries seem rather premature!! Expect that to filter through to RAB in coming days.