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

topped up today

Goldfinger are you still holding? Any comments? I am tempted to add.

Dodgy if you ask me. Poor investor relations - small investors can't even access their web site and see what the portfolio is.

Still holding, moneyplus. Has stakes in some excelent businesses. These will out in the end.

cheers GF.

I see from the newspaper reports there was an article in The Sunday Times on the danger of hedge funds (MAN /RAB ). Could anyone who read it give the gist of what it concluded

It just said Hedge funds are having a difficult time making the usual wads of money in this sideways market. to really make money they need steep swings up or down it makes little difference to a hedge fund--only us poor suckers!

sigmadelta, stop talking wet I can.

cheers GF.

We all get down sometimes and I haven't made any money for months, I wake up hopeful every morning. Some day I'll match you!! Cheers, happy working. MP

Moneyplus,

http://www.timesonline.co.uk/newspaper/0,,176-1206341_1,00.html


Reading this today it reports that Simon Cawkwell aka EK is now short of RAB.

they are feeding on their own now!!! reference the rapid fall in MAN , being shorted to death by other hedge funds

jules37,

Well he isn't always right, ask him how much he lost in Regus!

Or did he stop counting at 3 million?

This is what appeared in the Times today. Not the speculation given out on another site....................................

The Sunday Times - Business



August 08, 2004

Hedge funds: now its shark eat shark
The share price of Man Group, the giant of the sector, is driven down relentlessly as rivals scenting blood are selling the company short. By Louise Armitstead



LEWIS BACON, head of Moore Capital and one of Londons most successful hedge-fund managers, once described the opaque world of investment management as a game.
Hedge-fund managers, he said, fall into three groups. Those who know they are in the game, those who dont, and those who have unwittingly become the game themselves. The last is to be avoided at all costs.



When shares in Man Group, the hedge fund-of-funds company, began to fall in April, commentators shrugged off concerns by blaming difficult market conditions. Share-price volatility was to be expected from a hedge-fund group, they said.

Six months on, with the shares down from their high of 18.51 to 13, experts say Mans stock is suffering rather more than cyclical volatility.

It seems the worlds biggest quoted hedge-fund manager has become the victim of its own unforgiving and relentlessly competitive industry. Its share price is being driven down by a large number of short sellers.

Almost all hedge funds have suffered recently from a lack of volatility in global markets and the proliferation of new funds. As such they have been best placed to predict the downturn in Mans fortunes. Astute managers have taken short positions to cash in on their quoted rivals sliding share price.

Industry insiders said more and more hedge funds have been jumping on the bandwagon in the past year. According to Data Explorer, a company that gathers intelligence about short selling, more than 16% of Mans market value is now on loan. In the past few months it has been the most consistently borrowed stock in the British market. Since hedge funds have to borrow stock to cover short positions, these figures give the clearest insight into short-selling activity.

Jason Street, an analyst at UBS, the investment bank, said: Theres huge short interest in Man Group. Its the most shorted stock in the UK market.

To use Bacons analogy, Man has become the latest and most lucrative game in the hedge-fund playground despite the companys vast size and importance.

James Chanos is the founder of Kynikos Associates, a New York hedge fund with $2 billion under management. Chanos, one of the first to spot the accounting irregularities at Enron and Tyco, was also one of the first to take a big short position in Man Group.

At first it looked like an embarrassing mistake. Mans shares rose steadily in subsequent months from about 15 to a high of 18.

cheers GF.

Apologies.
It's in the daytraders article where it says Evil K is short I qoute:

I thought the market was overblown. I went 5m short of shares, and have now vacuumed up some profits, he said. He is now either short, or contemplating going short, on several more shares including Regus again (as it raises cash in a rights issue), RAB Capital and Colt Telecom.

The link: http://www.timesonline.co.uk/newspaper/0,,2769-1206411_3,00.html

wait........and then buy for 10p......a price with a bit of value!,p/e still around 40 at the moment.

Article from Profit Watch.

Returns from hedge funds this year are
dismal. According to Chicago-based Hedge Fund Research
the average hedge fund declined by 1% in the second
quarter. George Soros's mighty Quantum Fund returned a
miserable 1.2%, while 10 of the 11 funds run by UK
hedge fund industry leader Man Group made a loss.

This may come as a disappointment to pension fund
trustees, but to anyone with his head screwed on it can
hardly come as a surprise. $60bn was poured into hedge
funds last year and the number of such funds has
quadrupled to 7,000 in the last decade and that is
not counting those that have failed along the way.

Hedge funds attempt to make money either from
arbitrage, exploiting pricing anomalies, or for the
majority, by straightforward punting on the markets.
Most obvious pricing anomalies are identified as they
happen by smart software, and are exploited before they
can widen to offer big returns. And with markets
becalmed, there are no trading opportunities. No wonder
all those hedge fund managers are sitting around
wondering what to do.

With their fat fees, and easy-to-earn performance
bonuses the hedge fund racket ranks right up there with
the best of the City's get-rich-quick schemes. Smarty-
pants have cleaned up, but now they know the game is
over.

Nice rise on RAB today, should have got back in yesterday but don't like the spread.

hello. here are some charts which may also help us to see where RAB may be going. I think in all honestly the whole market (even for the spec shares RAB holds) will do nicely at least until the run up of the US elections. Remember when the tide rises, it carries all boats!! See what u think GF?

And this is our benchmark.... see how EMG and RAB have similar trends. Remember that Hedge Funds don't do well in sideways markets. Hopefully the next several months will pay off

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Made a bit of money out of trading in & out of this one but now I'm going to leave it alone because this time I just don't know where it's going.