The flagship hedge fund of London asset manager RAB Capital is shunning unlisted equities, a key source of the stellar returns once achieved by its manager Philip Richards, after extreme market illiquidity last year left it unable to sell many assets and nursing large losses.

Phillip Richards, manager of RAB Special Situations fund, made his name by investing often in illiquid shares of small companies such as miners and explorers, and also in private firms. This made his investors an eye-catching 1,274% in 2003, a result announced shortly before RAB announced it would seek admission to London's junior Alternative Investment Market the next year.