March 23, 2010 / 7:30 AM / 10 years ago

UPDATE 2-RAB Capital sees clients returning after 2009 loss

* Pretax, pre-items loss 6.9 mln stg vs 3.8 mln profit

* Assets under management rise to $1.35 bln

* Dividend 0.5 pence, versus 1.8 pence

* Shares up 1.6 pct

(Releads, adds quote)

By Laurence Fletcher

LONDON, March 23 (Reuters) - Hedge fund firm RAB Capital RAB.L confirmed clients are returning to its funds that were battered by the credit crisis, after it swung to a loss in 2009 and cut its dividend.

RAB, which specialises in energy and commodities funds and is also well-known for its failed bet on bank Northern Rock, on Tuesday reported a loss before tax and exceptional items of 6.9 million pounds, compared with a profit of 3.8 million pounds in 2008.

Assets under management recovered to $1.35 billion at the end of 2009 from a low of $1.26 billion at mid-year as clients returned to its funds in the second half. But that was still far below the more than $7 billion assets under management in December 2007.

RAB’s inflows come as investors slowly return to the $1.6 trillion hedge fund industry, which suffered big losses in 2008 but recouped much of that last year. According to Hedge Fund Research, clients reinvested a net $13.8 billion into hedge funds in the fourth quarter.

“We’re seeing generally a lot more interest from investors,” RAB Chief Executive Stephen Couttie told Reuters.

RAB shares were up 1.6 percent at 0825 GMT.

He added that assets had changed little since December, as client inflows balanced out previously demanded outflows such as a $35 million redemption from its Energy fund.

RAB also cut its second interim dividend to 0.5 pence from 1.8 pence a year before.

Couttie added that the firm was still looking to recruit teams of fund managers or make small acquisitions.

(To read the Reuters Funds Blog click on blogs.reuters.com/fundshub; for the Global Investing Blog click here)

Editing by Erica Billingham

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