ONE of London’s best-known hedge funds, RAB Capital, has snapped up a majority stake in A1 Grand Prix, the so-called “world cup” of motor racing, from Sheikh Maktoum Hasher Maktoum Al Maktoum, a member of Dubai’s ruling family.

RAB Special Situations, the AIM-quoted fund run by Philip Richards, has taken an 80% stake worth £100m. The fund has been known in the past for taking large positions in natural-resources firms.

As part of the RAB deal, A1’s management will be restructured. Tony Teixeira, the South African mining magnate who co-founded the project with Maktoum, will move up to chairman while Peter da Silva, a Brazilian-born motor-racing fanatic who has spent 20 years at Siemens, has been appointed chief executive. Ben Hill of RAB will also join the board.

In a statement Maktoum confirmed his resignation as chairman and director and said: “With RAB Capital’s financial expertise and ability to appoint additional management, I am confident that A1 GP will attain a new level of excellence. I wish A1 GP, RAB and the series every success in the future.”

Richards said A1, which was launched two years ago and pits nation against nation rather than team against team as in Formula One, represents an opportunity to make a lot of money in China.

He denied the investment was an aberration for his Special Situations fund: “I’m not wedded to natural resources at all. Four years ago I had never invested in commodities, but since then we’ve returned to investors 40 times their money.

“Our focus has always been on western-owned and western-run companies that sell successfully to Asia.

A1 fits with this. Motor racing is one of the fastest-growing sports in Asia — it is watched by both the elite and the masses. It is also the only single event that spans the region and so offers a unique advertising opportunity for global brands.”

He added: “Rather than investing in Chinese companies — where you risk being shut out by a local partner or the regulators — we look at western companies selling to the Chinese.

“We’ve made a fortune selling natural resources — copper, zinc, coal and so on — to the Chinese. This is the same: we’re selling motor racing to Asians, and with it the only event available for global brands to advertise across the continent in the context of a western company.”

The venture had a troubled start when it was launched, but a series of recent television deals and more street races around the world have boosted the popularity of A1. As well as a new deal announced last week with Speed Channel in America, there have been deals with Sky Sports, ESPN and Asia’s Star Sports. This year, coverage will reach more than 120 countries with an average audience that organisers claim is at least 8.5m viewers per race.

Teixeira has also overseen the financial restructuring that was supposed to help the company prepare for a float on the London Stock Exchange planned for next year.

Richards said the plans have not been scrapped, but added: “Timing will be based on making a float a success and the company is unlikely to be ready before the last quarter. If it takes longer, then no pressure. Success, not timing, is essential.”

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