RAB Capital warns on year, will cut costs

LONDON (Reuters) - Hedge fund firm RAB Capital RAB.L warned that its 2010 results would miss market expectations after major clients pulled money from its funds and said it is cutting costs to get back on track.

The firm, which managed assets of around $7 billion (4.5 billion pounds) at the end of 2007, said after the market closed on Thursday that results for the 12 months to end-December would likely be significantly below current market expectations.

The group said it would cut costs, incurring a one-off charge of about 5.5 million pounds for the year.

Assets under management at August 31 were $1.05 billion, the company said, after a European bank pulled money from its fund of funds and it suffered a reduction in value of a substantial position in its Special Situations strategy, both of which were flagged in July.

Excluding these movements, the company said it experienced modest inflows into its more successful strategies since the end of the first half.

Chief Executive Charles Kirwan-Taylor said: "We have decided it is necessary to address our cost base but remain fully confident in our main investment strategies and that we will continue to deliver strong risk adjusted returns for our investors."

Analysts had expected the company to make a pretax loss for the year of 3.83 million pounds, less than the 6.95 million pounds pretax loss it posted in 2009, according to a Thomson Reuters I/B/E/S poll of two brokers.

(Reporting by Paul Sandle; Editing by David Holmes)