The hedge fund management group RAB Capital disclosed yesterday that it is looking at a potential acquisition after reporting a near tripling of profits for the first half of this year.
The 193 per cent surge - to £14.2m from £4.8m this time last year - was in part due to an accountancy policy change that saw some performance fees recognised earlier in the year, but was largely a result of RAB's booming business.
At $4bn (£2.15bn), the value of assets under management grew by 77 per cent; sales almost trebled to £27.3m; earnings per share jumped 155 per cent to 2.27p; and an interim dividend of 0.25p represented a 67 per cent increase.
Michael Alen-Buckley, RAB's founder and executive chairman, said: "We have had the best first half ever. Trading was healthy and we made a lot of money. It reminds you how cash-generative this business can be."
Almost £12m has been earmarked for staff bonuses. RAB, which is listed and headquartered in London, still has about £100m cash and reckoned that gave it as much as £60m with which to pursue acquisitions.
Philip Richards, the chief executive, said: "We have said we will make acquisitions, but will only go forward if they are accretive for our shareholders and are a good fit. We are looking at something at the moment, which may or may not come off."
Hedge funds use a wider range of investment strategies across more markets than traditional long-only fund managers in the pursuit of absolute returns.
The industry has burgeoned in recent years as pension funds, other institutional investors and the very rich increasingly turn to hedge funds in a quest for better returns in difficult markets.
RAB's flagship Special Situations fund, which invests in natural resource companies, has more than doubled to $1.27bn over the past year and is the company's first with more than a billion dollars under management.
RAB Capital shares were a modest 6 higher at 89p, as the strength of its results had been widely expected.Reuse content