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

Anyone see working lunch,very interesting intervieu with director of Man Group on hedge funds. I am definately in Rab for the long term and will be adding on the dips if you read this now he is on.

Lifted from another board, sure they wont mind.


Anyone else just see the interview with a hedge fund manager from Odey Asset Manangement on working lunch (BBC2) there will be more of it in a while.
Basically, he backs up everything that has been said in goldfingers observations, about hedge funds performing in any market, and being "very sexy", very good viewing for any one doubting their RAB invesment long term. Good stuff

He also mentioned the mining sector taking a bit of a hit over the last few days, and seeing as RAB are heavily involved with mining, explains the slight drop.

cheers GF.

So all is rosy no risks?

Anyone got any forecasts to justify the market cap?


Seems a very one sided thread so far.


How much City bonuses are these guys paid?



Doesn't anyone want to discuss negatives to acheive balance?

Given that the issue price last month was 25p, it is difficult to understand how the value of the company can have doubled, when nothing has fundamentally changed. On this basis, it appears to be overbought and is now undergoing a correction. Doesn't mean to say that it isn't a good long term buy.

Xargon I think you are right it is well overbought.


Might be a buy at a value price, but no seems to be able to justify the current price.

Saw the interviews with the Scot from Odey Asset Management. He certainly put forward a very compelling case for Hedge Funds and how their operating style works vis-a-vis Unit Trusts. Interesting/concerning (?) to note that they are currently largely invested in cash! For info. I am sure you know these programmes can always be viewed later in the day using the BBC Website.

GF. Interested in your business. I invest in property and have been considering the North (or South from my viewpoint!) so if I do move in that direction, perhaps you can help! Regards.

The more City bonuses they are paid the better. The special situation fund last year made a gain of over 1000%. Im a capitalist and I think a good performance should be rewarded. Theres nothing wrong with incentives in a capitalist world.

Its the bad fund managers and bad managers in general that get paid a flat rate bonus at the end of the year no matter what performance is that should have their asses kicked.

If anyone as per the poster above who complained about bonuses doesnt like incentives why not get on your bike and go live in a communist country, Im sure you will like your evening meal of blue bread and beans.

cheers GF.

So no one got any idea of profits to jusify the market cap, I thought most people would have had an idea what sort of returns they are going to get for their investment?

A pretty sharp correction on the graph above, I expect these may continue to fall on Monday, after all only issued at 25p after a years bull phase factored in, is over 50p justified, or has everyone been buying on the general hype after seeing the comments on an abundance of bulletin boards last w/e?

Obviously the poster above is ignorant of the workings of an hedge fund. I have explained this to him on another site and answered ALL the questions he has raised above, but as usual he is at his spoiling tactics, little wonder two other sites have seen necessity in taking his posting rights away.

If someone is not prepared to listen and posts over the debate, then a bulletin board stops being a platform on which to debate sensibly.

cheers GF.

Just to recap.........

Lifted from another board, sure they wont mind.


Anyone else just see the interview with a hedge fund manager from Odey Asset Manangement on working lunch (BBC2) there will be more of it in a while.
Basically, he backs up everything that has been said in goldfingers observations, about hedge funds performing in any market, and being "very sexy", very good viewing for any one doubting their RAB invesment long term. Good stuff

He also mentioned the mining sector taking a bit of a hit over the last few days, and seeing as RAB are heavily involved with mining, explains the slight drop.

cheers GF.

As you are probably aware, hedge funds incorporate incentive fees within the performance of the fund, usually calculated on a monthly basis. Thus, if the fund performs above a specified target the fund manager will charge an incentive fee will be charged to the individual fund. This affects the value of the individual fund and not the value of the company itself. The company will have a separate bonus scheme for employees that will be based on company profits as a whole, distinct from the funds performance. there is a clear distinction to be made between fund performance and company performance. the fact that one particular fund has increased in value by 1200% is impressive, but it must be remembered that this is only one of a number of funds.

this looks like a promising little co., but recent hype is the reason that it has shot up so rapidly. im in for the long term but am expecting it to readjust.

Is there a danger that rash decisions may be made to achieve bonuses?


What is the base value of the fund that has increased 1200% please?


I presume the 1200 figure is the best which explains hype, but what would be the AVERAGE fund performance which is much more representitive & balanced?

All been answered on another board, would'nt waste your time with him sharecaster. Let him do the looking and the research and then come back to us and not the other way round. Should be easy to find, he knows where it is as we have been through it ALL once before, its not my fault that he cant get his head around it and understand it. He just doesnt seem able to grasp the concept.

cheers to everyone have a lovely weekend
GF.

the whole concept behind hedge funds is the "hedging" of risk. hedge fund trading has evolved significantly since the days of LTCM, and there is consequently a lot less room for the individual managers to make "rash decisions". One extreme of this evolvement is the Man Group fund manager AHL which is a computer programme that tells the traders exactly what to trade and at what price.

Thanks Sharecaster.


Would I be right about the 1200% performance being the best of the "many" ?


Do we know what sort of funds are under management at the moment...so we can judge a percentage required for both profits & NAV?

would definitely agree with that. important not to be blinded by the performance of one fund. others will have fallen in value. i would suspect that the average is low double figures if they have performed very well.

Thanks very much.

First ever hedge fund to enter AIM
Trading has exceeded directior expectations
1200%+ Return on Special situations fund
Only 34mil shares in Public hands
Directors own 90% of the shares
Pays a 0.25p dividend
Company is thinking of buying back upto the 10% of the shares held in public hands in the future
Company is looking to invest in japan, where the economy is booming. And energy.
Company is looking to recruit more fund managers and open more funds.

"Yes your such a clever person arent you." Goldfinger, are you trying to tarnish your armour?

Surely, slanging matches are for people with big imature egoes!