CLIG reports 4pc rise in funds under management

(Sharecast News) - City of London Investment Group reported a 4% increase in funds under management on Monday, to $11.2bn at the end of September, driven by strong performance across its emerging markets and listed private equity strategies. The London-listed firm, which specialises in closed-end fund investment strategies, said funds had risen from $10.8bn at the end of June despite client rebalancing and net outflows of $419m during the quarter.

Its largest division, City of London Investment Management (CLIM), posted particularly strong returns in its global emerging markets strategy, which rose 13.8% net of fees against a 9.6% benchmark gain, while its listed private equity strategy delivered a 13.7% return versus an 8% annual hurdle.

The international equity strategy returned 7.0%, broadly in line with its benchmark, while opportunistic value gained 2.2%.

City of London said the emerging markets portfolio benefited from favourable country positioning, including overweight exposure to Mexico and South Korea and underweights in India, alongside selective exposure to Vietnam and smaller Chinese technology names.

Chinese markets surged 20.7% in US dollar terms during the quarter, while governance reforms in South Korea also supported returns.

The firm noted a "long pipeline of future corporate events" expected to provide further discount catalysts and value creation opportunities.

It said the listed private equity strategy saw most holdings post positive returns, with two corporate announcements - one involving its largest position - driving gains of more than 30% in dollar terms.

City of London said the segment continued to attract allocators seeking liquid exposure to private markets or to manage J-curve risk.

The international equity strategy achieved strong absolute returns, aided by overweight exposure to China, emerging Asia and Japan, offset by small-cap weakness in Europe and the UK.

It said the opportunistic value strategy lagged its benchmark but remained positive, reflecting its lower equity beta and focus on event-driven alternative investments.

Karpus Investment Management (KIM), the group's US-based arm, delivered broadly benchmark-matching performance across its main strategies, with growth balanced and conservative balanced portfolios up 5.41% and 4.28%, respectively.

Fixed income strategies also produced solid returns as bond yields fell, with the 10-year US Treasury yield down eight basis points and AAA municipal yields 29 basis points lower.

KIM said municipal bond closed-end funds and preferred securities boosted performance, while pre-acquisition SPACs detracted due to shorter duration exposure.

Over the past five years, KIM's taxable fixed income and tax-sensitive fixed income strategies had outperformed their benchmarks by 6.24% and 3.49% annually.

The group confirmed that chairman Rian Dartnell was continuing to work with the board on the recruitment of a new chief executive, with progress described as "considerable".

City of London also reaffirmed its final dividend of 22p per share for the year ended June, bringing the full-year payout to 33p, unchanged from the prior year.

Subject to approval at the 27 October annual meeting, the dividend would be paid on 6 November to shareholders on the register as of 26 September.

At 1140 BST, shares in City of London Investment Group were up 0.37% at 371.38p.

Reporting by Josh White for Sharecast.com.