13th Jan 2015 08:53
LONDON (Alliance News) - Charlemagne Capital Ltd Tuesday said it intends to cut its dividend as it reported a double-digit drop in assets under management, hurt by the substantial net outflows from the sector over the course of its last financial year.
In a statement, the specialist emerging markets asset manager said assets under management amounted to USD2.25 billion at the end of 2014, down 13.2% over the course of the final quarter and 17.7% over the full year.
Revenue for the year fell by 31% to USD28.5 million due to plummeting net performance fees, which shrank to USD2.4 million from USD16.2 million. Net management fees rose by 7.9% to USD25.8 million.
The asset manager also cut its dividend, revealing that it intends to pay a second interim dividend for 2014 at the same level as the first interim dividend of 0.5 cents per share. Last year, Charlemagne Capital declared a 1.0 cents second interim dividend on top of a first interim dividend of 0.5 cents per share.
"The directors have taken the view that, given the difficult conditions encountered during the year and the strength of the group's balance sheet, it would be appropriate to support the amount declared from reserves," Charlemagne Capital said in a statement.
Charlemagne Capital said the challenges faced by emerging equity markets in 2013 were compounded in 2014 by a number of different crises, pointing to volatility in Eastern European markets on the instability in Ukraine, as well as the drop in oil prices in the second half.
Nevertheless, the asset manager noted some positive developments, with net inflows over the year into the core, long-only funds in line with its asset-raising strategy.
"With a strong product offering we remain well positioned to benefit from any recovery in the emerging markets in the coming months," Charlemagne Capital said.
In addition, Charlemagne Capital said it has "cemented its relationship" with US marketing advisor North Bridge Capital, with a long-term marketing arrangement now in place. Under the agreement, North Bridge Capital will assist Charlemagne Capital in building a presence in the US institutional investment community.
Charlemagne said it has granted North Bridge Capital options over shares in Charlemagne, subject to performance criteria.
The initial option entitles North Bridge to acquire a number of shares equivalent to 1% of the current total number of shares in issue at an exercise price equal to the closing price at date of grant, subject to a vesting condition that USD100 million in assets under management is raised.
Subsequent options may be granted upon "incremental increases" in assets under management to a maximum of 9.9% of shares in issue provided USD2 billion has been raised.
Charlemagne Capital shares were down 18% at 10.00 pence on Tuesday.
By Samuel Agini; [email protected]; @samuelagini
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