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Money managers under the microscope

RAB on the way back up

January 8, 2010

A positive trading update and finally a rise in assets from RAB Capital this morning shows that even hedge fund firms badly hit by the credit crisis are on the way back up.

RTXR8CZThe firm, whose assets stood at more than $7 bln two years ago - but later saw them slump due to outflows and performance losses -  saw a recovery in H2 of $100 mln to $1.37 bln.

While rising markets are helping, investors are also slowly coming back, in spite of the negative publicity surrounding RAB’s failed investment in Northern Rock and the debacle surrounding Special Situations (which lost 70 pct in 2008 and found itself with more than two-thirds of its assets in unlisted holdings just as buyers in all but the most liquid markets seemed to vanish).

And while wealthy private investors — among the first to jettison hedge funds when the credit crisis began — are still sitting on the sidelines, it is institutional investors such as pension funds who are leading the return of money.

And it may be the long-term approach of such investors, as well as the industry’s overall revival, that has persuaded Aberdeen to make its first foray into hedge funds via the acquisition of fund management businesses from RBS, giving it a weighty presence in the fund of hedge funds space.

The funds of hedge funds industry has been hard hit over the past year after several big names invested with Madoff while many were caught out by funds they invested in putting up gates, so Aberdeen’s progress in this space will be interesting to watch.

(RAB is on the way back up. Picture: REUTERS/Johannes Eisele)

(See also RAB fund still paying the price)

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