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

Am I happy it's made a comeback?

I would have thought comeback would mean the 50p+ it was tipped at, it's still way below that, so not really made a comeback at all to my mind..& down 2.5p today....not unhappy or happy.

it has really come back from the recent lows, also it never reached the lows u suggested either. You see if u go for an investment that someone just tips here then, really may just as well throw your money away. I for one, and assume GF the starter of this thread made basic research based on price, growth forecasts, low P/E, management and market sector made the correct decisions to gamble money here. Shares go up and down, you know it. this one is going up. Watch this space

xmortal said: and assume GF the starter of this thread made basic research based on price, growth forecasts, low P/E, management and market sector made the correct decisions to gamble money here.

I haven't seen it, just selected fund performances & copy & paste stuff.


I will watch the space. should be 1 quick time according to some, not seen any fundamentals or reasoning to back that statement up though.

Good luck :-)

Nothing wrong with cut and paste as long as you beleive in what the original author states (unlike you of course, thirdeye lol). Plenty of fundies on this thread, why not read it all.

I stand by my quid quick time.

cheers GF.

Thirdeye - well followed on the RAB fundamentals, you've definitely predicted the downward trend the shares have been on since hitting 60p. The recent bounce up from 35-36 level to 42-43p looks like a little hope-hump in the chart before the downward trend continues.

GF - yet another case of you pushing a stock 'cause it has a story behind it?
Almost ramping .. nothing personal dude. As you say, "DYOR", to support your assertions. Incidentally - suggesting buying because you expect it to be tipped more is also highly dangerous as will it be tipped by an ever increasing number of people or will it be tipped less (and that's not even with negative sell suggestions in the tips - as mainly they have been positive - and that still barely supports the company float price let alone price performance since.)

Myself - i do believe in the long-term story - however the market valuation for the company float is buoyed by the shortage of boutique hedge fund management companies to invest in.
The company is also performing well. I do expect this to continue and i do believe it will attract further funds to grow, which will grow profits - and maybe performance fees.

On a wider note - MAN Group can not achieve stellar returns for ever - it will eventually fall to an Evil Knieval short - if it isn't already.

One final point - RAB is seen a big investor in primary extraction plays - natural mineral resources and oil explorers. I am wondering if some of these have already had their best days as commodity prices appear to have spiked - at least in the short run. Will RAB's performance fees follow?

Expect RAB to continue to float down towards 32p. (No post-float pun intended)

ps reminds me of an old saying in equity broking - "expect a quid quick time" - it's like saying it'll be a quid at Christmas - and not saying which Christmas ...

Just another copy and paste

AGM 21st of May


Hedge funds' market spoiler
Anthony Hilton, Evening Standard
11 May 2004

EASYJET'S shares plunged 30% last week when the company warned that, in common with other low-cost airlines, it was having a tough time. Nokia shares fell 30% the week before for similar reasons.

Something very serious is happening here. What these movements underline is how hedge funds have come to dominate the activity of the London Stock Exchange and trading in the big international blue-chips. The City pressures companies to promise growth as a precondition for taking an interest in the shares. When a company fails to live up to the promises it has been pressured into giving, it is savagely punished.


The hedge funds know there is money to be made by selling the stock short at the slightest whiff of disappointment They have the money and the power through their close relationships with investment banks like Goldman Sachs and Morgan Stanley to deal in huge volume.

So 110m shares changed hands in the hours after easyJet's gloomy announcement, according to chief executive Ray Webster. That is more than 50% of the free float of the company because 42% of the 360m shares in issue are still held by founder Stelios Haji Ioannou and his family. Activity on that scale is out of all proportion to the nature of the profit warning and the change in easyJet's prospects. It shows how distortion, manipulation and the use of overwhelming force have become endemic in the market.


Some commentators have said Webster is wrong to complain about this treatment, but he is surely not alone in thinking that this is not how stock markets were meant to work. The stock market is where people with an interest in backing companies meet people who need capital to develop their businesses. That is its reason for existence. Hedge funds and the prime brokerage activities of investment banks are turning the place into a casino where genuine long-term investors and companies are overwhelmed by their superior financial resources.


If this continues, the stock market is stripped of its usefulness and becomes of as much value to society as a high-stakes poker game. Already the market is no place for an individual investor. Increasingly, however, it is no place for professional institutional fund managers either. It is not just a question of the chaos caused by excessive volatility.


Institutional investors do not get access to the fine terms and choice deals brokers reserve for the hedge funds. They lack the technology and access to deal on the finest terms. They no longer get first sight of the choicest deals. On the contrary, they suspect every deal they do is likely to have a hedge fund or two riding on its back. Some institutions have even started offering higher commissions to brokers in the hope of encouraging more favourable treatment. It underlines how worried they are at being treated like secondclass investment citizens.


The City spends a lot of time considering plans to reward executives with shares. The premise is that the growth in the share price will be a reflection of the medium-term success of management in growing the business. Hedge funds and prime brokers are destroying the nature of that premise, and if they continue unchecked they will destroy popular support for the stock market itself. Meanwhile they simply devastate the morale of managements who see share price movements that bear no connection to the work they are actually putting in to a business

shares will eat themselves

Exactly, which is why hedge funds are being investigated, something will have to give & it's likely to be limitations imposed on hedge funds, how might that affect forecasts? No one knows until they are revealed. Perhaps the FSA do have reason to investigate & perhaps Warren Buffet does know what he is talking about, more than a lot of posters on here, that's for sure.

A quid for xmas 2004.

Even I'm not that bearish...It's not going to be that bad Xmortal I'm sure your holding will be worth more than that by Xmas ;-)

a quid by xmas or b4.

Well we have had one say "A Quid quick time" & now a second say "A quid by Xmas or before"

So, I asked the first if he would care to give us some analysis/fundamental reason why it would reach a quid, ie low p/e ratio? NAV? Forecast profits? etc etc, but no response, It would be churlish not to invite you to give your reasons as you may have a constructive reasoned argument as to why 1 will be acheived on or before that date....over to you?

PE: 9.6
EPS growth forecast: 29
Operating margins % 37
Management: Former Merryl Lynch executives and an ex tory chancellor Norman Lamont


Funds newly launched Japan And Energy. you can see there is the awakening of the energy and japan markets to capitalise on. Plus USA presidential elections which will push the markets up.

So could you give me the contrary views (fundamentals please give us FIGURES and DONT keep on with that FSA and warren buffet crap) because if u stand for those ideas you would be not suggesting or even ask pleople to invests in those silly stupid, not hoppers OFEX companies in he other thread you started.

PS: no worries u wont get this on the cheap!!!

Oh dear a smear on Ofex companies now, well I have had a 55 bagger (did get to 100 bagger status) on Ofex & am currently 50,000 up on Britannia Finance, I guess that makes Ofex companies no hoppers or even hopers....and the money I have made is silly & stupid :-)

Using your figures then if the current p/e is 9.6 and it grows by 29% then the share price assuming no change in sentiment should increase by 29% also.(Depending on the following years forecast...but that's all we have to work on at the moment) at 40p that would be 51.6p nearly half of your projected figure of a 1.

Care to explain where the other 48.4p has gone? And will their be any dilution ie more shares issued?

& will not a possible pending investigation by the FSA have no effect?

Put simply what I am saying above is, that you are forecasting 150% share price growth by Xmas when there is only 29% eps forecast growth of which I expect at least half of that 29% is already factored into the current share price, which to my mind all things being equal leaves a possible 14% increase in share price by Xmas.


However none of that takes into account any possible legislation or any of my other concerns I have posted above which is why I forecast 30p...as you asked.

thats good, 100 bagger!!! wow you should be the next warren buffet!!! mind you cannot be if you invest in OFEX.

If you are so devout of fundamentals, explain the rationality of companies like reuters, vodaphone, filtronic, are trading nicely with high p/e and wiht no earning forecast for the next ffew years???

And now of course you wanna jump on RAB at 30p is more like it. An your companies in OFEX are on track of giving a gradual EPS and ROE. What is their P/E? and their management???? you know those companies are iliquid and if the money u make is due to their volatility and the ramping from people like you... so dont start giving us that crap on fundamentals cos you dont practice it..

the price is gonna be at 1 pound by xmas enhanced by the fundamentals and momemtum.

you are dimissed!!!

Erm we are talking about RAB not Vodaphone.


Erm no I don't want to jump into RAB at 30p, I have just told you your 1 is way off & detailed why.

As to defend myself on the Ofex company (As you bought the subject up & asked me questions)
KMS was a 100 bagger went from 16p to 20.50, I got 55 bags (as I said) as I bought as a new issue when introduced by Acorn & have the contract notes of sale still!

& here is the compound growth of Britannia Finance, profits followed by % growth, as for your point about illiquid they are set to have as many market makers in some stocks & no doubt will have more than even in a few selected AIM stocks, this is expected circa July 1st.


2000 67,631 % growth
2001 107,502 +59%
2002 179,063 +67%
2003 308,979 +73%
2004 750,000 E +143%



I make that compound growth of 85%. Profits expected to rise by 143% Hope that compares well with RAB's. Eps will outstrip RAB's 29% for sure......Results circa end of June if you wish to check.
Last years Eps is expected about 2.75p & this years eps is expected to be circa 5.5p, share price is 40p. Btw if they accounted the same way as their peers you could add at least 1m to profits & reduce the eps pro-rata....the reason they don't at this stage is to keep the tax charge low.

& if you think the company is too small that's how Telecom Plus was on Ofex but is now announcing 10m profit...maybe Ofex shouldn't be dismissed so lightly?

http://212.100.224.125/pages/story_display.php?story_id=2252 shows Britannia "requires imminent funding", possibly to survive. Expect it not long after results, yet more dilution, could be facing cashflow problems, one to avoid xmortal.

RAB now expanding intoo Japan, looks good.

Sorry but again you guys have bought the subject up again not me so I will tell the truth.

Britiania has increasing shareholder funds (infact 2 institutions yes institutions on Ofex have just bought shares at 36p & I mean just as in weeks ago), a 10m facilty from a Blue chip bank, & rapidly increasing profits, a favourite of Michael Walters, Tom Winnifrith & Unquoted Analyst, so how can Britannia need imminent funding other than to expand quicker? It's nonsense from a pro 535x & anti-Ofex (in my opinion) website since new owners took control that looks to have a personal adgenda against Ofex as Hawick has against TE as proved by a private message published to & by Edelin on the Britannia ADVFN thread.