RAB Founders To Prop. Up Special Situations

Aug 26 2011 | 9:56am ET

The founders of RAB Capital are throwing the firm’s flagship a lifeline to keep it from further antagonizing investors.

Michael Alen-Buckley and Philip Richards, the latter the fund’s manager, will invest an additional US$30 million in RAB Special Situations. The new investment will allow Richards to avoid having to side-pocket the fund’s illiquid assets.

RAB is in the process of recasting Special Situations as a natural resources-focused fund. In October, RAB will return about 80% of the fund’s assets to investors; the redemptions were to leave Special Situations, which managed more than US$2 billion at the beginning of 2008, with less than US$100 million.

Special Situations lost more than 70% of its value that year, beginning a downward spiral that ended earlier this summer with the company’s decision to delist its stock.

With their new investment, Alen-Buckley and Richards will have about US$40 million invested in Special Situations, Bloomberg News reports.

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