Fast-growing hedge fund to float

AN investment company set up just five years ago with less than £10 million of funds in management is poised to float on the Alternative Investment Market.

RAB Capital, started by hedge fund managers Philip Richards and Michael Alen-Buckley, now looks after about £750 million and is even planning a joint venture to sell its products to Saga's seven million members.

A date has not been set for the public flotation, but it will offer an opportunity for small investors to put their money into a pure hedge fund business by buying the shares.

Small private investors cannot invest in hedge funds, which are often highly-leveraged, risky and complex. But institutional investors and wealthy punters with more than £1 million of liquid assets have been increasingly seduced by the case for 'hedging' against market falls.

Philip Richards, RAB's chief investment officer, said: 'If we go public, Michael and I will not cash out of any shares. The idea is to take the business to the next stage of growth by taking in more capital to let us to seed more funds.'

The partnership will have 12 funds by the end of the year and some 16 investment professionals, who have been 'locked in' for up to five years via stock options.

And the company already has some eye catching performances to boast about. Its Special Situations fund, run by Richards, delivered net performance of 1,274% last year by placing big bets on shares of companies involved in gold mining and natural resources. That fund now tops £200 million, half of which is capital gain.

Richards says: 'All our focus when assessing businesses is, how much cash will their assets generate over a period of time? It is old fashioned, but it works.'