RAB issues a late night profits warning and says it will cut jobs

LONDON based hedge fund operator RAB Capital, warned yesterdfay its full-year loss will be larger than expectations after losing nearly one-quarter of its assets in July and August from poor performance at one of its largest funds and from investor redemptions.

Assets sank to $1.05bn at 31 August, from $1.26bn at 30 June and $1.35bn at the start of
2010, because of a 15 per cent loss in its flagship Special Situations fund in the two
months, and from a European bank pulling cash from RAB’s fund of funds.

The hedge fund, which is famous for having bought shares in Northern Rock before the bank was nationalised, issued the warning after the market closed last night and said that it will have to make cuts to its 100-strong workforce. RAB would not confirm the number of job losses but said the cuts would cause an “exceptional charge” of £5.5m.

Barely two weeks after the new chief executive, Charles Kirwan-Taylor took the helm, he said RAB had a strong capital and liquidity position, but that the company’s cost base was too high compared with its revenues and its full-year results would be “significantly” below expectations.