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