Hedge fund RAB restructures in Hong Kong

RAB Capital, which this year took a financial charge in respect of putative restructuring, is now moving forward with implementing that painful strategy, and that translates into focusing on core products, and dealing with a world which requires lower costs, capital preservation and coming to terms with lower assets under management.

This has affected the Hong Kong office of the hedge fund.

“Some of the envisaged new initiatives need to wait a bit,” says David Seex, CEO of RAB Asia. “Certain projects have been shelved, such as new fund launches and new teams.”

The recent closure of RAB’s Pi Asia Fund (Nissim Tse’s team) reduced headcount, and the Hong Kong office now consists of Seex himself, who joined in the summer of 2010, a small number of support staff and a team of five who are intended to be on the investment side of RAB’s as-yet unlaunched Asia Deep Value Fund.

The future of the RAB Asia Deep Value Fund (as for that matter with any hedge fund out there still trying to launch) depends on it successfully raising capital for its proposed strategy, and that is what it is prioritising.

Of the other familiar names formerly in RAB Capital Hong Kong, David Rogers and his Northwest team left in 2009, Steve Ellis’s RAB Gold Fund closed this summer and he has left the firm, and Jeff Fisher also left the firm in the summer to help re-establish Fortress Investment Group in Asia.

RAB Capital now manages $1 billion in assets, which is a drop from a pre-crisis high of $7 billion. It is that reduction in aggregate assets under management, caused by a confluence of redemptions and fund performance that has been experienced in the last couple of years, which has been the catalyst of RAB's intention to restructure its business to fit current conditions.