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RAB Capital - energy and special situations

2008-11-05

Count of distinct funds: 2
Capital base: 1 bn (GBP) for the RAB Energy; ? for RAB Special Situations
Loss: 50% YTD for RAB Energy; ? for RAB Special Situations

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stories: co.uk

RAB Capital has now suspended redemptions on two of its funds, the Energy and Special Situations funds, reports the TimesOnline. Per the article:

RAB Capital, has stopped investors cashing out of a second of its flagship funds. Investors in RAB's Energy fund - which has lost more than 50% of its value this year - have been told they will not be able to liquidate their holdings.

Those who want to quit will be handed "redemption shares" instead of cash - a promise on behalf of the fund to pay back investors as and when it can sell out of enough stocks.

Thus, the proposal to RAB Energy investors is to either opt-in to a three year lockup of their money or opt out and take the aforementioned redemption shares. Apparently, this proposal is similar to a deal that was offered the RAB Special Situations fund investors.

The RAB Energy fund, which "was worth more than 1 billion (GBP) at its peak", is down some 50% on the year. However, we do not know the same figures for the RAB Special Situations fund.

If you can provide further information on either, please let us know.

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Important: This fund is on our list of hedge funds that are apparently ailing or which we think are worth watching for any other reason. Ailing funds haven't shut down, but they've suffered significant value declines and/or temporarily halted redemptions. Funds on watch may not even have unusual declines, but may be posted if it is felt there may be risk of developing a more serious condition eventually.