24 Jun 2011
RAB Capital, a symbol of the explosive growth of hedge funds in London during the early 2000s, has confirmed it will delist from AIM. Investors are being offered 10 pence per share compared with the 25 pence the company tapped the market for at its float in 2004.
RAB said it expects, barring any inflows, to have less than $200 million in assets by October. In mid-2007, it managed over $7 billion before investments in Northern Rock and illiquid investing strategies in early stage resource producers generated substantial losses with the onset of the credit crisis.
“The board has concluded that in light of poor results, significant redemptions in the period to 11 May 2011 and further anticipated redemptions, third party assets under management will fall to a level that will make RAB’s business model difficult to sustain as a publicly quoted company,” RAB said in a statement. “The board is therefore proposing that the company should delist from AIM and become a private company, which will reduce administrative and regulatory overheads, as well as the burden of continuing disclosure requirements at a time when the business requires significant restructuring.”
Directors, notably chairman Michael Alen-Buckley and Philip Richards, chief investment officer, own 53% of RAB. Philip Moore, Adam Grant, The Rt Hon Lord Lamont of Lerwick and Derek Riches, have formed a committee of independent directors to evaluate the proposed buyout on behalf of shareholders and are being advised by Macquarie Capital.
For 2010, RAB reported a loss after taxation of £19.4 million (2009: loss £3.1 million) on revenue of £11.9 million (2009: £13.9 million). Net current assets and investments at Dec. 31 were £82 million representing 17.4 pence per RAB share.
In April, RAB received redemption notices in respect of the RAB Special Situations Fund, the company’s flagship vehicle run by Richards, amounting to 79% of its assets. Then, in May, the co-manager of the RAB Energy Fund, the group’s best performer in recent years, resigned.
Prior agreement with two significant independent shareholders means that RAB is at the threshold of having the 75% approval needed for the delisting to go forward. Shareholders who elect not to sell will receive a share in the unlisted new company. Details of how RAB shareholders may split their shareholdings, into new shares and cash proceeds, will be set out in a circular.
RAB also said it is engaged in discussions with a third party for the possible sale of the investment management agreements for the RAB Energy Fund and the RAB Octane Fund. RAB has signed a letter of intent in respect of a possible transaction and is working towards signing a binding agreement before the end of June.
After that transaction, RAB’s business will then comprise the management of the following funds: RAB Special Situations Fund, RAB Global Mining and Resources strategy (which is offered to investors both as a Cayman Company and in UCITS form), RAB Europe (including the Polaris Prime Europe Fund and the RAB Prime Europe UCITS Fund) and the RAB European Credit Opportunities Fund. The directors expect to stabilise the business over the near term and to manage the remaining strategies with the intention of safeguarding the position of the remaining investors.
RAB said it expects, barring any inflows, to have less than $200 million in assets by October. In mid-2007, it managed over $7 billion before investments in Northern Rock and illiquid investing strategies in early stage resource producers generated substantial losses with the onset of the credit crisis.
“The board has concluded that in light of poor results, significant redemptions in the period to 11 May 2011 and further anticipated redemptions, third party assets under management will fall to a level that will make RAB’s business model difficult to sustain as a publicly quoted company,” RAB said in a statement. “The board is therefore proposing that the company should delist from AIM and become a private company, which will reduce administrative and regulatory overheads, as well as the burden of continuing disclosure requirements at a time when the business requires significant restructuring.”
Directors, notably chairman Michael Alen-Buckley and Philip Richards, chief investment officer, own 53% of RAB. Philip Moore, Adam Grant, The Rt Hon Lord Lamont of Lerwick and Derek Riches, have formed a committee of independent directors to evaluate the proposed buyout on behalf of shareholders and are being advised by Macquarie Capital.
For 2010, RAB reported a loss after taxation of £19.4 million (2009: loss £3.1 million) on revenue of £11.9 million (2009: £13.9 million). Net current assets and investments at Dec. 31 were £82 million representing 17.4 pence per RAB share.
In April, RAB received redemption notices in respect of the RAB Special Situations Fund, the company’s flagship vehicle run by Richards, amounting to 79% of its assets. Then, in May, the co-manager of the RAB Energy Fund, the group’s best performer in recent years, resigned.
Prior agreement with two significant independent shareholders means that RAB is at the threshold of having the 75% approval needed for the delisting to go forward. Shareholders who elect not to sell will receive a share in the unlisted new company. Details of how RAB shareholders may split their shareholdings, into new shares and cash proceeds, will be set out in a circular.
RAB also said it is engaged in discussions with a third party for the possible sale of the investment management agreements for the RAB Energy Fund and the RAB Octane Fund. RAB has signed a letter of intent in respect of a possible transaction and is working towards signing a binding agreement before the end of June.
After that transaction, RAB’s business will then comprise the management of the following funds: RAB Special Situations Fund, RAB Global Mining and Resources strategy (which is offered to investors both as a Cayman Company and in UCITS form), RAB Europe (including the Polaris Prime Europe Fund and the RAB Prime Europe UCITS Fund) and the RAB European Credit Opportunities Fund. The directors expect to stabilise the business over the near term and to manage the remaining strategies with the intention of safeguarding the position of the remaining investors.
