RAB Capital funds to receive cash injection from Asia’s Sunwah
RAB Capital, the embattled hedge fund manager that last week announced it would give up life as a publicly traded company, has received an offer from Asian financial firm Sunwah International Asset Management to buy two of its funds and provide extra commitments, using a combined $250m of Sunwah’s client money.
Sunwah, part of Sunwah International Limited, will take part in a novation agreement and inject $50m of client money into the global equity Octane and natural resources Energy funds, and furnish RAB with $200m more of client money to help meet redemptions from those products.
Each fund lost money in the two years to mid-2009 – Octane down 21% and Energy off 42.7% – but recovered since, investors said.
The energy fund made 16% compound annual returns since launching in 2004, beating the FTSE 350 Oil & Gas index by 129% and the Aim Oil & Gas index by 164%.
Sunwah’s commitment is part of a major boosting of alternatives activities for the group, as it is also considering taking an 80% stake in the $550m London hedge fund platform, PCE Investors.
Sunwah said the combined developments would “mark a major shift in the company’s business model towards a more diversified and stable income base.
“These transactions provide confirmation of Sunwah’s business plan to become a leading global funds platform,” said Doug Betts, president and CEO.
The regulated asset management unit that SIAM will then have is targeting $1bn assets by year’s end.
Bill Majcher, SIAM’s CEO, said: “We are very pleased by the opportunity to launch the business with two of the leading funds in the energy sector. Our initial discussions with many existing investors confirm they are supportive.”
The Energy and Octane funds will remain under current management following the deal, which is expected to close by September.