Hedge fund RAB feels fees pinch as assets dive by 76%

Listed hedge fund RAB Capital today revealed a 76% slump in assets under management.

They fell to $1.9 billion (£1.36 billion) in December from $7.2 billion 12 months earlier, a trading statement revealed. Fee income is estimated to have been £51 million in 2008, down from £125 million in 2007.

But the hedge fund said cost-cutting would keep operating profit in line with expectations. It added that administrative expenses had been slashed from £86 million in 2007 to £40 million last year.

"After a very challenging year, RAB has been able to maintain its balance-sheet strength through positive operating cashflow," chief executive Stephen Couttie said.

"We expect that continuing market dislocations will bring further challenges in the early months of 2009, and it is too early to comment on the outlook for the year as a whole."

He anticipates having to take a charge because of the falling markets that have eroded the RAB portfolio.

RAB also announced the appointment of board member Charles Kirwan-Taylor as chief investment officer and John Mattimore, formerly of Gartmore and Old Mutual, as chief risk officer.