LONDON (ShareCast) - RAB Capital, one of the main shareholders of Northern Rock, has written down its investment in the collapsed bank even though it is still mulling legal action following its nationalisation.

Chairman Michael Alen-Buckley did not specify the extent of the write-down, though he said RAB’s position in the now nationalised bank accounted for less than 1% of assets under management.

The shares are held in its Special Situations Fund, which is being managed by chief executive Philip Richards.

RAB also said assets under management had dipped this year, with the group taking a cautious stance in the face of global liquidity and credit issues.

"The opening weeks of 2008 have seen a continuation of liquidity concerns, investor nervousness and high volatility for markets," it said, adding that at end February assets under management were estimated to be $6.9bn, down from $7.24bn at the end of 2007.

Over 2007, assets under management rose from $5.24bn to $7.24bn, due largely to positive investment performance and the acquisition of the business of Pi Investment Management in October 2007, RAB said.

All of RAB's funds saw assets rise in 2007 except for the UK fund, which dropped by 21% from $356m to $283m, RAB Cross Europe where funds fell 8% to $290m and RAB North-West Japan which dropped 55% to $80m.

Profits in 2007 came in at £51.1m, up from £50.6m, and in line with its forecast in January. Net income was £137m (2006: £133m), slightly above its January forecast. The proportion of management fees in income rose to 42% from 28%.

"Nervousness in global markets will bring many challenges and opportunities in 2008 and RAB is in good shape to take them on," Alen-Buckley said.

The dividend for the year rises by 50% to 2.4p.

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