RAB Capital investors approve 3-year lock-in

LONDON Wed Oct 1, 2008 9:03am BST

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LONDON (Reuters) - Listed hedge fund manager RAB Capital said investors in its flagship Special Situations strategy have agreed to tie up their money for three years as part of a restructuring plan.

Investors in Special Situations have voted in favour of the three-year lock-up "by a considerable margin," RAB said in a statement on Tuesday.

"The effect of the restructuring is to ensure the long-term stability of the strategy so as to provide a better prospect for the generation of value in the underlying investments," RAB said in a statement.

The shake-up, announced earlier this month, comes in response to a poor performance from Special Situations after bets on small-cap mining stocks and British bank Northern Rock went wrong.

In return for investors locking in their money for three years RAB is halving its management fee to 1 percent per year.

The company is also cutting its performance fee -- payable when investment returns exceed targets -- to 15 percent from 20 percent.

Previously investors could withdraw their money quarterly after giving 180 days' notice.

RAB said on Tuesday it had total assets under management of $4.2 billion as of Sept 25.

(Reporting by Myles Neligan; Editing by Greg Mahlich and Erica Billingham)