Money managers under the microscope
It’s been a tough 2008 for RAB.
As the industry faces its biggest-ever crisis, RAB’s own assets have slumped to just over a quarter of what it ran a year ago, while fees have inevitably fallen too.
Meanwhile it has also taken charges after making acquisitions, only to see their assets fall, and for losses on investing in its own funds.
However, there are reasons to be positive.
The firm retains the backing of the Mittal family, a major investor in its funds, while cash on its balance sheet is high.
Furthermore, it has taken the painful action of shutting funds, reducing headcount and cutting bonuses.
In a harsh, ‘Darwinian’ industry, where those who adapt survive, it will be fascinating to follow RAB’s progress and to see how a firm that built its reputation during the commodity bull market of recent years – now almost a distant memory – changes its business model.