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RAB Capital wins vote on lock-up for RAB Special Situations strategy

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RAB Capital has announced that investors in the Cayman-domiciled RAB Special Situations Fund Limited and the Delaware-based Special Sits LP have voted by a ‘considerable margin’ to approve

RAB Capital has announced that investors in the Cayman-domiciled RAB Special Situations Fund Limited and the Delaware-based Special Sits LP have voted by a ‘considerable margin’ to approve a three-year lock-up, without which, the firm had warned, the strategy might have to be shut down.

The effect of the restructuring, RAB says, is to ‘ensure the long-term stability of the strategy so as to provide a better prospect for the generation of value in the underlying investments’. Assets under management in the Special Situations strategy were estimated at USD790m as of September 25, out of a total of USD4.2bn for RAB Capital as a whole.

In a separate initiative, RAB is moving to divisionalise its business, a move it says will provide better clarity on its product offering and respond to investor requests for greater segregation between its products.

As a first step the group plans to vest the management of its Northwest products into a separate management company to be managed directly by George Philips and David Rogers, who will own 49 per cent of the business.

Under the plan, which is subject to regulatory approval, the new management company will be a separate regulated entity, but with RAB holding 51 per cent of the equity and continuing to be represented at board level.

As of September 25 the RAB-Northwest funds represented 15 per cent of the group’s total assets under management. The group says the new arrangements will not result in a material difference to its economic interest in the Northwest business.

‘We are grateful that investors in RAB Special Situations have given strong support for the restructuring proposal,’ says the firm’s chief executive Stephen Couttie. ‘The three-year lock-up is the best way to secure value from their investments.’

‘The Northwest team have developed a strong brand in their own right and the product has remained distinct from RAB’s offering since their acquisition in 2006. The board anticipates that these proposals will provide a more logical framework from which George and David can continue to develop the business.’

RAB Capital was founded in 1999 and floated on London’s Alternative Investment Market in March 2004. The firm currently manages 15 absolute return strategies, 13 single-strategy and two multistrategy, as well as the AIM-quoted company RAB Special Situations.

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