RAB Capital today acknowledge catastrophic declines in assets under management and fee income, as well as a further management shakeup in an effort to revive its moribund franchise.
The London hedge fund said that its assets under management fell by almost three-quarters last year, from US$7.2 billion to just US$1.9 billion. Some US$900 million of the decline came in the last two months of the year alone; RAB managed $2.8 billion on Nov. 1. Of the money that’s left, just about a quarter of it—US$570 million—is locked up for more than a year.
The firm said that about half of the decline was due to poor performance, and the other half due to redemptions, with the latter taking its biggest toll in the first half of the year and former during the dark days of the second half.
Commensurate with such awful investment performance and dwindling asset base, RAB’s fee income plummeted almost 60% to £51 million (US$71.6 million).
“Continuing market dislocation will bring further challenges in the early months of 2009 and it is too early to comment on the outlook for the year as a whole," said CEO Stephen Couttie said in a statement.
RAB has cut its administration costs by more than half, and slashed bonuses. The firm also said it will take a restructuring charge due to staff reductions.
It also announced another major change at the top: Philip Richards, who resigned as CEO in September to focus on his battered hedge funds, is now also handing over his responsibilities as chief investment officer. RAB today said Charles Kirwan-Taylor has succeeded Richards in that role. Kirwan-Taylor joined RAB in March as a director. He had formerly run his own hedge fund shop, Greyshirke Capital.
Richards will continue to manage RAB’s flagship Special Situations Fund, which won a new lease on life last year when investors approved a new three-year lockup in exchange for fee reductions. The fund, which once managed US$2 billion but lost more than half its value last year, would have been forced to close had investors rejected the restructuring plan.