LONDON: RAB Capital said its days as a listed group might be numbered as clients continued to pull money, raising the prospect that one of the most high-profile hedge fund victims of the financial crisis could be shut down.
Shares in the company plunged by almost a third when the market opened, as investors took in another round of bad news after years of disappointing performance.
"The board intends to review the options for the company, including the appropriateness of maintaining an AIM listing," RAB said in a trading update.
Shares in RAB -- infamous for buying into Northern Rock just before the UK lender collapsed -- were 24 percent lower at 0929 GMT, changing hands for 7.97 pence each, wiping some $25 million off of its total market value.
RAB said in March losses last year almost trebled to 20.2 million pounds.
"This is the point where they have got to pursue closing down the entire business. You can't manage funds with this cost base," Singer Capital Markets analyst Sarah Ing said.
But the company said it intended "to continue to support its core strategies", including a number of new funds it had recently launched.
RAB said it managed $1.06 billion worth of client assets at the end of last year. That compares to about $7 billion at the end of 2007, before the crisis started hurting the hedge fund sector in earnest.
The company said investors had sought to pull out of several of its funds including the RAB Cross Europe Fund, which would result in RAB's overall assets falling to a level below the company's previous expectations.
In April, it said that clients of the RAB Special Situations (Master) Fund had submitted redemptions amounting to 79 percent of the value of the fund.
As more clients head for the exit, RAB said assets were likely to move to below its previous expectations, and that the outflows would necessitate "further restructuring" as the firm tries to slash costs.
The company also said that Gavin Wilson, who was a co-manager of its RAB Energy Fund and RAB Octane Fund, had decided to leave for personal reasons. Co-manager Mark Redway will continue to run the two funds.
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