London hedge fund manager RAB Capital is proposing to lock almost all the investors in its flagship Special Situations hedge fund into a three-year commitment in return for cutting the fees they pay, after the fund's investments lost more than one-fifth of their value last month.

Investors in the Cayman Islands-domiciled RAB Special Situations Fund Limited and the US-domiciled RAB Special Sits LP - which both feed into RAB Capital's special situations strategy - have until September 29 to vote on the proposal. If they reject it, they will then be asked to vote on liquidating the feeder funds.