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Money managers under the microscope

Improving situation at RAB Special Sits

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Encouraging news today from RAB Special Situations after the listed fund (a feeder into the main hedge fund) reported a 10.5 percent NAV rise in May.

rtr1vujsWhile this is behind the index return, it nevertheless marks a welcome boost for a fund that has reflected many of the hedge fund industry’s recent problems.

Many of the fund’s investments in small-caps and¬†private companies became much harder to sell last summer as markets seized up, meaning the hedge fund wasn’t able to meet investor demands for their cash back or pay down debt owed to the prime broker.

Meanwhile, having done so well out of years of booming commodity prices, the fund was badly hit in the subsequent downturn, losing money on small-cap miners and a bad bet on Northern Rock among other things. Last year the feeder fund’s NAV dropped 73 percent and its share price lost 85 percent.

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