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

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.

Can anyone advise on the 1m traded at 30.75p yesterday morning? Thanks.

I cant believe how RAB charts follows so closely EMG!!! patience with this one investors. Here are some news related to RAB. See one of the comments on a equities rally before year end, which ties nicely with the USA precidential elections. Make up your own mind:

Commodities favoured as hedge funds set out their stalls
Tue 21 September, 2004 08:57

By Steve Hays

MONACO (Reuters) - Commodities-related investments have taken centre-stage at a major hedge fund conference in Monaco, with managers laying out their favoured strategies.

Hedge funds are credited with playing a large part in the rally in commodities markets, particularly in oil, and are also estimated to account for around 30 percent of total trading volume in equities markets.

"After 20 years of underinvestment, commodities are offering huge opportunities and IRRs (internal rates of return) of 45 percent," Philip Richards, chief executive of RAB Capital said on Monday.

He was speaking at the Information Management Network's High-Performance Investing Symposium.

Richards said RAB's funds were generating extremely high returns by focusing on companies with world-class underlying assets, but which were very undervalued by the equities market.

He cited the example of South African Resources, a South African platinum producer which he said had had management problems and required an extensive work programme to extract the value from its 50 million ounces of inferred metal reserves worth $50 billion in-situ.

RAB had bought 25 percent of the company at 2 sterling pence per share and later sold its stake on at 12 pence, he added.

Other companies RAB has large stakes in include Asian energy which is developing a big coal mine in Bangladesh and Falkland Oil and Gas, which has licences to explore for energy resources in a large area of the South Atlantic, Richards said.

Kevin Harrington, director of research at Clarium Capital Management, said his company was focusing on taking out long positions at the long-end in crude oil futures contracts a couple of years out, which avoids the volatility in nearby contracts.

These positions have shown a steady appreciation in the last two years, he added.

Hedge funds are also carefully studying the impact of high oil prices on Russian stocks and William Browder, manager of the Hermitage Fund -- the largest investment fund in Russia with $1.2 billion in assets -- predicted a sharp rally in equities before year-end.

"Russian stocks are up 3 percent and the oil price is up 35 percent, yet oil and gas make up 75 percent of the Russian stock market. The great oil boom hasn't hit because of the Yukos situation."

Browder said he believed Yukos had now been priced into Russian equities, which are very cheap trading at six times earnings, and with large liquidity being held out of the market in low or even negative yielding assets, it is likely this money would return to shares soon.

Renee Haugerud, chief investment officer at the Galtere International Fund, said her company was basing its trading strategy on its outlook for what it called "inverse stagflation" where it saw stable to falling interest rates and equities, and inflation in commodities prices.

She said such a scenario could still be positive for China, where huge demand for raw materials has played a large part in the rallies in commodities markets, if the Chinese revalued the yuan upwards against the dollar.

Such a revaluation would offset the rise in dollar-priced commodities, when prices for China's finished goods exports are stable or falling, Haugerud said.

Friday saw good trade volume on this share, with good positive price move of 9%.Would anyone know why?

here is our benchmark doing well. Positive news I feel for RAB too.

Man Group, the alternative investment products and agency brokerage, said it has made good progress in the first half of the year, adding that it is confident of continued significant growth in underlying earnings for the year.

In a pre-close trading update, the company said client money raised in the six months to September was around $7bn, 38% from private client product and 62% from institutional product.

CEO, Stanley Fink, said funds under management as at today's date are estimated to be $39bn, up from $38.5bn at end March, after taking into account the maturity of a major legacy account at RMF.

Net management fee income pre-goodwill will be up by over 30 pct in the first half, reflecting the increased level of funds under management, while net performance fee income before goodwill will be about half of the level of the first six months of last year, reflecting the weaker first quarter performance at AHL.

Brokerage net income before goodwill, excluding prior year exceptional items, will be up over 20% due to continued organic growth, underpinned by a diversified product offering and a wide geographical presence across all key markets.

Fully diluted underlying earnings per share are expected to be up by about 25%.

Man Group will announce its interim results on November 4th.

Shares in Man Group were reiterated a 'buy' at Merrill Lynch after the fund manager group issued what the broker described as an 'extremely confident' pre-close trading statement, dealers said.

The broker said Man is confident of significant growth in underlying earnings for the year, which it reads as setting a floor of 20% EPS growth in dollar terms, which equates to at least 95p per share.

Merrill said funds under management, at around $39bn, are around $1bn ahead of its own expectations. The US broker stuck to its 2,220p price target.

hello, well we are having a good run this week, only today 13% up. Also MAN group is having a good run this week due to a bid rumour. Still like we said, hedge funds do good in bull or bear markets, and RAB is having a good slice of it. The market is running up and will continue to do so at least till year end. We can again think of 1 pound Dec. What do you think GF? or have u sold your shares.

I am also in MAN and bought b4 last week. Doing nicely.

Hi guys now going up nicely. Fingers crossed we have got rid of the Germans LOL.

cheers GF.

I almost forgot that nuisance, first degree deramper, I bet he got in when RAB reached 25P. Such a two faced poster!

some informative posts,cheers!only been holding for a week or so.
with faulklands oil and gas floating on the 14th(thurs)and RAB having a 40% stake,does anybody have any views of where this will take us?i here from another board they have been over subscribed 10x.

alderleyedge,

x10?

i wonder whether they will cut back the small punter's shares, or the big boys, or a bit of both?

Superb news for RAB, i can't help feeling we will challenge 50p this week.

aimtrader
after todays comments in the telegraph and times(sorry i dont know how to cut and paste),50p may be short lived.
it could also be that an announcement may be made this week for falklands minerals to float,and RAB owns 45%.
on the back of falklands oil and gas floating this week, where's this really going. and a quid by when???????????????