Hedge Firm RAB to auction Stakes in Fund: Report

Date: Monday, March 1, 2010
Author: Reuters

LONDON (Reuters) Hedge fund firm RAB Capital is to organise an auction to allow aggrieved investors to sell-off stakes in its Special Situations fund, the Financial Times reported .

Investors in the fund had agreed to a three-year lock up in 2008 after the fund had trouble selling assets in illiquid markets.

But the firm has enlisted Credit Suisse to organise a dutch auction in The Netherlands on March 8, where both current and outsider investors will be eligible to bid for the stakes of existing clients who wish to exit, the FT reported.

Around half of the firm's assets come from institutional investors, who have witnessed the company's assets fall from more than $7 billion in December 2007 due to outflows and performance losses.

Special Situations, having seen a 70% performance loss in 2008, rose 5% last year as strong performance from its listed holdings was held back by writedowns on its unlisted portfolio.