RAB Capital

RAB Capital Ltd is a British-based hedge fund group which initially 'made its name by being a prolific backer of small mining and energy stocks'.

RAB was co-founded in 1999 by Philip Richards and its current chairman Michael Alen-Buckley. Former Tory cabinet minister Norman Lamont served on RAB's board for eight years until 2012.

Activities

In 2009 RAB Capital's Special Situations Fund and another hedge fund SRM Global, sued the government over the near-collapse of Northern Rock.

In 2013 RAB’s mining-focused Special Situation fund was ranked the worst-performing fund monitored by HSBC, losing 31.4 per cent, its third straight year of double-digit losses according to the Financial Times in January 2014.

Michael Alen-Buckley, chairman of RAB, who has seen the fund’s assets sink from $2.4bn in 2007 to just $22m, said: “There is no getting around the fact that this was very poor performance. Large mining stocks got hammered and anything involved in gold mining was pretty much destroyed, but we are hopeful for a recovery.”

Investors

In 2005 RAB Capital's two co-founders raised a combined £25m from selling shares in their company.

Lakshmi Mittal, the Indian-born steel magnate often-dubbed Britain's richest man, became a major investor in RAB Capital, with a 4.48% stake.

The Mittals were among 14 buyers of the shares, but only one other party was named - Sofina, the Belgian company controlled by the Solvay family, which is one of Europe's wealthiest dynasties, bought a 5.5% share.

Conservative Party donor

Electoral Commission records show that RAB has made intermittent donations to the Tories since 2001:

• Dr Liam Fox MP - Amount £10,000.00 from RAB Capital Ltd on 09/07/2013 Reported 06/09/2013
• Conservative and Unionist Party - Amount £50,000.00 on 28/03/2012
• Conservative and Unionist Party - Amount £10,000.00 on 07/03/2001

The £50,000 donation made in 2012 would have entitled RAB membership of Prime Minister David Cameron's The Leader's Group.

People

• Michael Alen-Buckley - Co-founder and Executive Chairman
• Phillip Richards - Co-founder
• Charles Kirwan-Taylor - Chief executive from September 2010, replacing Stephen Couttie
• Adam Grant - Finance Director and Chief Operating Officer
• Christopher de Mattos -Executive Director

Board

Former members

• Norman Lamont - was non-executive director from April 2004 until 2012

Funds

RAB Special Situations (Master Fund) Ltd

According to Hemscotts/MorningStar in 2011

Following giant losses in 2008 and an exodus of clients in April this year, hedge fund manager RAB Capital has announced plans to delist RAB Special Situations from the stock market in an attempt to reduce costs and pursue a more flexible strategy. The fund manager has been forced to take this action as RAB Special Sits has never recovered from the financial crisis, when its significant holdings in Northern Rock and other losses prompted NAV to drop over 70% in 2008, compared to the 18% decrease seen at its FTSE World TR benchmark.

According to the Guardian in April 2011:

RAB Capital said most clients in its embattled Special Situations fund – which is infamous for buying into Northern Rock before the lender's collapse, and which fell by 70% in 2008 – will pull their cash out when a three-year lock-up ends in October.

Philip Richards, co-founder of RAB and manager of the fund, admitted: "We made mistakes in the runup to the crisis and that has been a chastening experience. We have learnt from it and are already using those lessons to the benefit of our investors.

At its peak in December 2007, Special Situations managed $2bn (£1.22bn), of which $200m was Mittal family money, but the fund has now slumped to $470m.

The RAB Special Situations Fund has also previously held shareholdings in the following:

GCM Resources

Falkland Oil and Gas

Palladex, a gold mining company

Other funds

• RAB Special Situations Company Ltd (Cayman-based)
• Special Sits LP (Delaware)
• RAB Energy

Former

• RAB Europe
• RAB Global Macro

Lobbying and PR firms

• Grandfield - handled PR for the company's public flotation on London AIM (Alternative Investment Market) in 2004. Grandfield was later bought out by Chime in 2005
• Tulchan Communications - David Trenchard/Andrew Honnor - won brief from Bell Pottinger Corporate & Financial in January 2006

Internal

• Marc Popiolek - former Grandfield MD, moved to RAB Capital

Reports

• RAB Capital plc Annual Report and Accounts 2010

External resources

• Nick Fletcher, RAB Capital shares rise as it unveils plans to go private, Marketforces LiveBlog, 24 June 2011
• Simon Goodley, RAB Capital hedge fund swamped by customers demanding their money back, The Guardian, 6 April 2011
• Szymon Idzikowski,RAB news item, 20 July, 2011 | 3:55PM
• Nils Pratley, 'Richest Brit' Mittal in hedge fund deal, The Guardian, Thursday 23 June 2005 09.01

Contact details

Name & Registered Office:

RAB CAPITAL LIMITED

1 ADAM STREET

LONDON WC2N 6LE

Company No. 03694213

Previous Company names:

Date of change Previous Name

02/09/2011 RAB CAPITAL PLC

04/03/2004 RAB CAPITAL LIMITED

22/06/1999 K.P.U. LIMITED