Hedge fund manger RAB Capital is to close several of its funds as assets under management fell by $4.3 billion in a year.
The firm stated the alternative asset management industry is “under severe stress”, with investors taking their cash out and seeking to reduce debt.
As a result RAB is closing three out of five funds along with a number of smaller hedge funds unlikely to “achieve critical mass in the current environment”.
Stephen Couttie, RAB chief executive, said: “We have taken the necessary action to focus the business and reduce its scale of operations in the
context of extremely difficult conditions throughout the industry, investor deleveraging and increasingly scarce financing.”
The flow of cash from hedge funds has led to RAB assets under management to fall to $2.8 billion and this is expected to fall to $2 billion by the end of the 2008.
At the end of July assets under management were at $5.9 billion and in September 2007 they totalled $7.1 billion.
However, RAB maintains its balance sheet remains strong, with net current assets and investments at £106.7 million, of which cash represented £53.0 million.
“Our balance sheet is a major strategic asset, available for reinvestment in the existing funds range and in new fund opportunities as appropriate,” Mr Couttie said.
The RAB share price was up 27.9 per cent today to 8.31p – compared to 52-week high of 105p.
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