RAB founders enjoy £25m share sale

THE multi-millionaire founders of quoted hedge fund RAB Capital cashed in some of their chips today in a £25m share sale.

The shares were snapped up by two of Europe's premier private investors - Lakshmi Mittal, the steel magnate who is Britain's richest man, and Belgium's Solvay family.

RAB chairman Michael Alen-Buckley and co-founder and chief executive Philip Richards each sold one-sixth of their holdings at 50p a share, double the float price of 15 months ago.

Alen-Buckley and Richards cash in £12.5m apiece but retain around a one-third stake in the firm, valued at £62.5m each. Two other RAB executive directors, Schehrezade Sadeque and finance director Christopher de Mattos, make £350,000 and £300,000 respectively from share sales.

The deal comes just weeks after it emerged that Richards is Britain's best-paid quoted company boss outside the FTSE 100.

Richards, a former star Merrill Lynch stockpicker who quit in 1999 to set up RAB, was last year paid more than £5.4m on top of the £2.5m he got in 2003. RAB's accounts revealed that, of the £5.4m, £1.6m was 'sacrificed' in charitable donations to his favourite evangelical Christian causes.

RAB's sale comes as speculation is rife in the City that several hedge funds may be in trouble. One of the industry's shooting stars, Bailey Coates Asset Management, this week announced it was closing its flagship Cromwell Fund after losses of more than 20% this year.

Richards said today that the RAB sale 'should be seen as part of the process of making RAB Capital into a more established and broad-based company ... this transaction also introduces a number of important long-term strategic shareholders'.

They include the Karrick Trust, a hitherto-unknown investment vehicle but one that has been identified as belonging to the Labour Party-supporting Anglo-Indian Mittal family, reckonedto have built up a fortune of around £15bn.

It is the first time Mittal has been directly linked to the London hedge fund industry. After buying 16m shares, he now has 4.5% of RAB.

Another 20m shares were acquired by Sofina, the listed Belgian conglomerate and vehicle of the Solvay family, a big player in chemicals and pharmaceuticals. Sofina now controls 5.5% of RAB.

RAB chairman Michael Alen-Buckley's £12.5m share sale will add to a burgeoning fortune. The former star ABN Amro stockbroker and Ampleforth-educated 47-year-old is married to hotels magnate Sir Rocco Forte's sister Gianni and lives in one of the smartest townhouses in London's Holland Park.

Chief executive Philip Richards' origins are more humble, but, combined with salary and bonuses, today's share sale means he has grossed some £20m in the past two years. He now lives in a north Kent manor house and has been the subject of City gossip as one of the most high-profile backers of ex-England cricketer Phil Edmonds' controversial oil firm, White Nile.