About £4 billion and more than 100 investment professionals have disappeared from RAB Capital, the London hedge fund admitted today.

RAB's funds under management have shrunk to $1.2 billion (£822 million) from $7.2 billion since the end of 2007.

While about half of that reversal came from the slump in stock-market valuations, RAB said about $3 billion of funds had been withdrawn by institutions and private investors.

Backed by steel baron Lakshmi Mittal, RAB founders Philip Richards and Michael Alen-Buckley made a fortune in the credit boom supersizing bets on burgeoning energy markets. However, the credit crisis has scythed into RAB.

Funds under management cratered more than 80%, and it has halved the size of its 200-strong workforce as it plunged into the red for 2008.

Fees for managing investments were down from £52 million to £41 million but performance fees — the amount hedge funds skim off when investments come good — fell from £72 million to £9 million.

Underlying pre-tax profits plummeted to £3.8 million from £51 million in 2007 with redundancy costs and other exceptional items leading to a £13.9 million loss for the year. The dividend is held at 2.4p. Richards and Alen-Buckley between them take just under half the £12 million payout.