City of London Investment Group PLC Trading Update 1st Quarter Funds under Management (2981B)

TIDMCLIG

RNS Number : 2981B

City of London Investment Group PLC

07 October 2020

City of London Investment Group PLC

7 October 2020

CITY OF LONDON INVESTMENT GROUP PLC

("City of London", "the Company" or "the Group")

Trading Update - 1st Quarter Funds under Management (FuM)

City of London (LSE: CLIG), a leading specialist asset management group offering a range of institutional products investing in closed-end funds, announces that as at 30th September 2020, FuM were US$5.9 billion (GBP4.6 billion). This compares with US$5.5 billion (GBP4.4 billion) at the Company's year-end on 30th June 2020. A breakdown by strategy follows:

 
             FuM ($mn)                               Strategy Index 
 
                 Sep-20   Jun-20         %     Net                            % 
             (estimate)            inc/dec   Flows                      inc/dec 
 
 EM               4,240    3,828       11%      39   MSCI EM                10% 
 INTL             1,355    1,244        9%     -10   MSCI ACWI xUS           6% 
                                                     ACWI/Barclays 
 OV                 268      256        5%      -5    Global Agg             5% 
 Frontier            72      175      -59%    -107   S&P Frontier 150        8% 
                                            ------ 
                  5,935    5,503               -83 
----------  -----------  -------  --------  ------  -----------------  -------- 
 

Funds under Management figures are rounded and exclude seed investments

IM Performance

Performance was ahead of the benchmark over the quarter in all strategies ex-Frontier. Specifically, in the Emerging Market (EM) strategy NAV performances were positive. In both the International (INTL) and Opportunistic Value (OV) strategies relative returns were driven by strong NAV performance and positive discount effects. The Frontier strategy was negatively impacted via sharply wider discounts.

The EM strategy had net inflows of US$39 million, while the Frontier strategy had outflows of US$107 million over the period. Net flows were flat for the INTL and OV strategies.

Operations

The Group's income currently accrues at a weighted average rate of approximately 74 basis points of FuM. "Fixed" costs are c. GBP1.1 million per month, and accordingly the current run-rate for operating profit, before profit-share of 30% is approximately GBP1.7 million per month based upon current FuM and a US$/GBP exchange rate of US$1.29 to GBP1 as at 30th September 2020.

The Group estimates that the post-tax profit before exceptional items of c. GBP1.8 million in relation to the KMI merger for the first three months of the year will be approximately GBP2.8 million (2019: GBP2.4 million) and post-tax profit after charging the exceptional items as detailed above for the first three months of the year will be approximately GBP1.0 million (2019: GBP2.4 million).

Dividends

The final dividend of 20 pence per share, subject to approval at the AGM on 19th October 2020, will be paid on 30th October 2020, bringing the total dividend for the financial year 2019-20 to 30 pence (2018-19: 40.5 pence, including the special dividend of 13.5 pence paid in March 2019).

Update on Merger of CLIG with KMI

As previously announced, CLIG completed the merger with Karpus Management Inc ("KMI") on 1st October 2020 (the "Completion Date"). KMI's client approval process resulted in approximately 98% of client assets being retained. As at 30th September 2020, KMI had US$3.6 billion of FuM. On a consolidated basis, as of 1st October 2020, the Group managed client assets of approximately US$9.5 billion.

For further information, please visit http://www.citlon.co.uk/ or contact:

Tom Griffith, CEO

City of London Investment Group PLC

Tel: [phone]

Martin Green

Zeus Capital Limited

Financial Adviser & Broker

Tel: [phone]

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October 07, 2020 02:00 ET (06:00 GMT)