City of London Investment Group (LON: CLIG) shares fell about 8% today after the fund manager reported net client outflows of $667m for the September quarter. Funds under management, the client money it manages and charges fees on, dropped from $12.3bn to $11.5bn.
The shares stood at 476p at 09:00 London time, down 8.46% from Friday’s close of 520p, and traded between 474p and 508p. The trading update came out at 07:00 London time.
Gross inflows were $87m against outflows of $754m. Market movements and investment performance took off a further $127m, so funds under management ended September at $11,516m, against $12,310m on the 30th of June. The figures are unaudited and rounded, and the September number is an estimate.
Most of the damage came from City of London Investment Management (CLIM), the group’s main equity business. It took in $47m but lost $650m, a net outflow of $603m, and its funds fell from $8,052m to $7,423m. The company blamed client rebalancing after strong returns:
Net outflows were primarily driven by client rebalancing and portfolio allocation decisions across the City of London Investment Management (CLIM) business following periods of strong relative and absolute investment performance.
City of London Investment Group
By strategy, International Equity lost a net $133m, Emerging Markets $126m, Listed Private Equity $97m and Opportunistic Value $35m. A further $212m left the Other category, whose funds fell to zero.
Karpus Investment Management (KIM), the US fixed income and balanced arm, was hit less hard. Inflows of $40m were outweighed by outflows of $104m, a net $64m, mainly from its Growth Balanced and Conservative Balanced strategies. Market moves cost $101m, and funds slipped from $4,258m to $4,093m.
Funds under management drive fee income, so a 6.5% fall in the base matters to the group. Management said it still has a strong investment and financial position, and is stepping up business development, consultant relations, thought leadership and refreshed marketing.
A final dividend of 23p, announced on the 15th of September, is payable on the 5th of November to holders on the 25th of September, subject to approval at the AGM next Monday, the 26th of October. It lifts the total for the year to 34p from 33p.