The board of the £10.3m RAB Special Situations investment trust is standing by its fund manager in spite of a 31 per cent fall in its share price in 2012.
The board has vowed to continue to buy back shares in a bid to narrow the trust’s spiralling discount. At the end of 2012 the trust’s shares were trading at a 21.8 per cent discount to the value of its assets.
RAB Capital, which runs the trust, focuses primarily on natural resources companies and proclaimed Falkland Oil & Gas as its biggest investment in the trust. But the company’s share price plummeted 45.5 per cent after disappointing drilling results.
In addition, the RAB Special Situations trust’s second biggest holding, Royal Nickel Corporation, fell 27.6 per cent, and the third biggest investment, African Minerals, fell 27.8 per cent.
The RAB Special Situations trust’s share price has fallen 55.6 per cent in three years, and has lost 85.5 per cent in five years to May 7 from its peak of £1.11 a share in May 2008, according to Bloomberg.
