30th Mar 2016 11:59
LONDON (Alliance News) - Argo Group Ltd on Wednesday said that growing its assets under management will be its "top priority" over the coming year.
A significant increase in assets under management is required to ensure "sustainable profits" on a recurring management fee basis, Argo said in a statement. The company said it is "well placed" to increase assets under management with "negligible impact" on operating costs.
Argo will concentrate its marketing efforts on the re-launch of its flagship fund, The Argo Fund, as well as finding potential acquisitions that would boost earnings. The Argo Fund, which has a 16-year track record, will focus on liquid sovereign and corporate bonds, the company said.
Emerging markets offer "attractive" investment opportunities following two years of decline, Argo said, calling economic fundamentals in emerging markets "robust". The Argo Fund is now an emerging markets fixed income fund, following a change from its previous multi-strategy focus. The Argo Distressed Credit Fund will concentrate on distressed credit and certain private equity positions, the company said.
"They are expected to deliver significantly stronger economic growth than developed markets in 2016 while enjoying attractive risk profiles thanks to low levels of government indebtedness and high foreign exchange reserves. The results of the first two months of 2016 for The Argo Fund show a promising future," Argo said.
The update came as Argo said its pretax loss widened to USD2.9 million in 2015, from USD2.0 million in 2014, as management fees fell to USD5.1 million from USD6.7 million and it booked a USD3.3 million loss on investments.
No dividend was declared. Argo said it will consider paying dividends as soon as the company returns to profitability.
A programme to buy back up to GBP2.0 million of Argo's shares is now underway, after the company instructed nominated adviser and broker to begin purchasing shares. The move follows shareholder approval of the programme earlier in March.
Shares in Argo were up 1.4% at 9.00 pence on Wednesday.
By Samuel Agini; [email protected]; @samuelagini
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
Argo Group