Jeremy Warner's Outlook: RAB's Philip Richards meets Rocky nemesis

Philip Richards, co-founder of the hedge fund group RAB Capital, is stepping down as chief exec-utive to spend more time with his funds – and, boy, do they need it. As if to prove the old adage that what goes up like a rocket comes down like a lead balloon, his once-lauded special situations fund is down a stomach-churning 39 per cent in the year to date.

He's hardly alone. In a giant bonfire of the vanities, numerous of these one-time masters of the universe have found their reputations all but destroyed by the present bear market. In Mr Richards' case, there was one spectacularly ill-judged investment decision – a big holding in Northern Rock. He should have stuck to natural resources, the sector where he made his name.

What's made the situation even worse for some hedge funds is burgeoning redemptions by frightened investors, which has forced them to liquidate what, in time, might have been some high-quality positions. However clever the card player, his luck will always eventually run out.

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