New York (HedgeCo.Net) – One month after RAB was forced to revamp their flagship fund, the British hedge fund is halting redemptions on their Energy Fund. After losing more than 50% of its value this year, RAB has informed investors that they will not be able to make withdraws in the near future.
Investors who wish to stay in the fund will be offered the same deal as those locked up in the $1.4 billion Special Situations Fund. The deal entails paying smaller management fees in exchange for keeping their money in the fund for the next three years.
Investors have until this Friday to let RAB know whether or not they want to accept the offer. The alternative would be receiving “redemption shares,” which are basically an IOU promised by RAB to pay back the investors when they start posting profits.
The Special Situations Fund, one of the largest shareholders of Northern Rock, got burned with the British Government nationalized the faltering bank. Losing almost $55 million in the first half of the year, former RAB head Phillip Richards wrote it off as “very regrettable” while outlining some new strategies for the company that involved investing in under-developed regions throughout India and the Middle East. Richards stepped down shortly after as CEO to concentrate exclusively on the Special Situations Fund.
The RAB Energy Fund is run by Gavin Wilson and Mark Redway and once managed over $1.5 billion at its peak.
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