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RAB Capital falls into the red as asset levels drop by a third

HEDGE fund manager RAB Capital said yesterday it had swung to a pre-tax loss for the first half of the year, and admitted the outlook for the next six months was uncertain.<br /><br />The firm, which suffered early on in the financial crisis with poor bets on failed lender Northern Rock, reported a pre-tax loss of &pound;2.75m, compared with a &pound;12.5m profit in the first half of 2008.<br /><br />Assets under management continued to plummet as investors withdrew their capital, hitting the firm&rsquo;s management fees.<br /><br />Assets at the group fell by 32 per cent during the first half to $1.3bn (&pound;792m). The group had assets under management worth $5.9bn a year ago.<br /><br />Sharper losses were offset by frantic cost cuts &ndash; the group has now slashed its headcount by 40 per cent &ndash; and the sale of its Northwest fund arm.<br /><br />Revenues at the group fell to just &pound;7.7m in the first half, compared to &pound;35.4m a year before.<br /><br />Chief executive Stephen Couttie said: &ldquo;We&rsquo;re beginning to see some flows and they are continuing seemingly into the third quarter.&rdquo;<br /><br />He said the group will &ldquo;release an element of excess capital to shareholders over time&rdquo; as markets stabilise, but he declined to say what form this payout will take.