Half Yearly Report

Charlemagne Capital

Results for the six months to 30 June 2010

Tuesday 7 September 2010

Financial Summary

·; Net management fees up 24% compared with June 2009, reflecting the higher average AuM in the first half of 2010

·; Group AuM US$2.8 billion as at 30 June 2010, up 16% on June 2009, down 9.5% since 1 January 2010 reflecting 

declining markets in the period

·; Non recurring performance fees of US$3.8m generated from the final distribution of assets from the jointly

controlled entity (SWR Investments Limited)

·; Performance fees continue to accrue on certain products with US$2.1 million accrued but not crystallised as at

30 June 2010 (2009: US$0.9 million)

·; Foreign exchange losses impacted Other Income as Sterling and the Euro weakened against the US Dollar

·; Ordinary interim dividend of 0.6 US cents and a special interim dividend of 0.75 US cents per share declared and

paid during the period in respect of the year ended 31 December 2009

·; The Group has declared an ordinary interim dividend of 0.4 US cents (2009: 0.4 US cents) and a special interim

dividend of 1.1 US cents (2009: nil) in respect of the half year to 30 June 2010 which will be paid on 15 October

2010 to those shareholders registered on 17 September 2010

Jayne Sutcliffe, Chief Executive, commented

"The business is again seeing growth in AuM, reaching US$3.04 billion by 31 August 2010. This has been achieved from both net inflows and positive investment performance since the end of the reporting period.

"The investment that we have made in distribution and investment expertise, as well as the current trends in the business, give us confidence that we are well positioned to grow our assets under management."

Enquiries:

Charlemagne Capital

Jayne Sutcliffe, Chief Executive Tel. 020 7518 2100

Lloyd Jones, Finance Director

Smithfield Consultants Tel. 020 7360 4900

John Kiely

Gemma Froggatt

This announcement is not for publication or distribution to persons in the United States of America, its territories or possessions or to any US person (within the meaning of Regulation S of the US Securities Act of 1933, as amended). Neither this announcement nor any copy of it may be taken or transmitted into Australia, Canada or Japan or to Canadian persons or to any securities analyst or other person in any of those jurisdictions. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian or Japanese securities law. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about and observe any such restrictions.

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of the Charlemagne Capital Group. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Nothing in this announcement should be construed as a profit forecast.

This statement is aimed at providing information regarding the Assets under Management on which revenue is derived by Charlemagne Capital Limited. The unaudited data contained in this statement are currently provisional and all such data are subject to change. This statement is produced in order to provide greater disclosure to investors and potential investors and to ensure that they all receive equal access to the same information at the same time.

Financial Summary

Summary Financial Information

The results and the assets and liabilities of the Group for the current and comparative interim periods along with the last full financial year (extracted from the audited financial statements) are set out below in summary:-

Assets under Management ("AuM")

The table below sets out the Group's AuM as at 30 June 2010 and the movements experienced in each product range in the period since 1 January 2010.

Note: Closing AuM is stated as including all subscription and redemption orders received for the relevant funds as at the close of the period but not processed until the first dealing date of the following period.

Chief Executive's Report

Assets under Management ("AuM") were US$2.8 billion at the end of June. After a recovery in global markets in 2009 and into the first quarter of this year, asset values declined in the second quarter of 2010 when measured in dollar terms. The fears of a broadening of the Greek sovereign crisis and other factors such as the slowing Chinese economy had a significant negative impact on emerging markets. The asset class as a whole lost 8% of its value in the second quarter and around 6% in the first half of the year. However there has been a recovery in markets since June and together with positive inflows into the Group's funds, AuM had reached US3.04 billion by the end of August, a similar level to the start of the year.

Net revenues for the half year were up on last year due to the growth in AuM since that period. Net management fees were US$10.4 million (2009: US$8.4 million) and total net crystallised performance fees were US$3.9 million (2009: US$0.4 million). As previously reported, the distribution of the net assets of SWR Investments Limited ("SWR") triggered the payment of a net performance fee of US$3.8 million to the Group in the period. This income has been treated as non operational in order not to distort regular income trends. SWR has now been liquidated and dissolved. Accruing performance fees1 which have not crystallised but have crystallisation dates falling before the end of the year were US$2.1 million compared with US$0.9 million as at the same date in 2009. Care should be exercised as this accrued amount may not necessarily be indicative of the eventual crystallised figure. The impact of foreign exchange losses incurred and the reduction in value of investments held has caused other income to be negative in the period.

The market environment has been unusually difficult over the last year for active fund management, although emerging markets generally performed better than developed markets. Only 22% of funds in Morningstar's 'Equity Global Emerging Markets' category outperformed the MSCI Emerging Markets GR Index in the twelve months to 30 June 2010 and it was possible for some first quartile funds to under perform the index over this period. Euro/Dollar exchange rates have had a significant impact on asset values over the period with Euro investors seeing substantially higher returns than Dollar investors. Our fund performance in the first half has been comparable to benchmark for the Magna and Institutional mandates. The Euro denominated Magna funds produced positive performance of between 6% and 17% but overall performance in US Dollar terms was negative due to exchange rate movement. The OCCO hedge fund has performed extremely well given the volatility of the markets returning 7% in the period under review.

It is pleasing to note that since the end of June we have experienced net inflows into the Group's funds. There have been two new additions to the Magna Fund range in the period under review; the Magna Emerging Markets Dividend Fund, which takes advantage of increasing capability and willingness of companies in emerging markets to distribute income to their shareholders, and the Magna Undervalued Assets Fund, which benefits from pricing inefficiencies in closed end funds. The Group's hedge fund, OCCO Eastern Europe, has benefited from regular inflows during the year and has now closed to additional investment until further notice.

Our priorities remain the achievement of consistent investment performance for our investors and adding additional assets to the Group, which has the capacity to manage significantly larger amounts without corresponding increases in costs. We are therefore committed to strengthening resources to support both these areas by continuing to invest in investment expertise and by building our distribution capability. Appointments have been made in the UK and we are in the course of setting up a German branch office to support marketing activities in that region. Equity markets can be expected to remain volatile and uncertain however it is widely recognised that Emerging Markets remain attractive due to the growth potential in their underlying economies but this has yet to be translated into significant inflows from investors. The Group remains confident that with the current infrastructure and investment into developing new ideas it is well positioned to grow AuM and improve profitability.

The Group policy of paying dividends reflecting the long-term earnings and cash flow of the Group remains unchanged. For the first half of 2010, the Group is declaring an ordinary interim dividend of US 0.4 cents (2009: US 0.4 cents) and a special interim dividend of US 1.1 cents (2009: nil). Shareholders' equity continues to be almost completely backed by cash.

Jayne Sutcliffe

Chief Executive

7 September 2010

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

 Notes to the Consolidated Interim Financial Statements

1. Basis of Preparation and Significant Accounting Policies

The consolidated interim financial statements have been prepared on a condensed basis, in accordance with the requirements of International Accounting Standard 34 "Interim Financial Reporting". They do not include all of the information required in annual financial statements in accordance with IFRS and where appropriate should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2009.

The condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2009.

The condensed consolidated interim financial statements are prepared on the historical cost basis except that the following are stated at their fair value: financial instruments at fair value through profit or loss including derivative financial instruments. Recognised assets and liabilities that are hedged are stated at fair value in respect of the risk that is hedged.

2. Comparative Figures

Where necessary, comparatives figures have been adjusted to conform to changes in presentation for the current period.

3. Segment Reporting

Notes to the Consolidated Interim Financial Statements (continued)

4. Taxation

Income tax expense is recognised in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year. Amounts accrued for income tax expense in one interim period may be adjusted in a subsequent period of that financial year if the estimate of the effective rate of income tax changes.

5. Dividends

An interim ordinary dividend of 0.6 US cents (GB 0.4011p) (2009: 1.3 US cents, GB 0.9205p) and a special interim dividend of 0.75 US cents (GB 0.5014p) (2009: there was no special interim dividend paid in the period) per ordinary share in respect of the year ended 31 December 2009 was paid on 23 April 2010 to those shareholders on the register on 26 March 2010 and was charged to the income statement in 2010.

The Group has declared an ordinary interim dividend of 0.4 US cents (GB 0.2596p) and a special interim dividend of 1.1 US cents (GB 0.7138p) in respect of the half year to 30 June 2010 which will be paid on 15 October 2010 to those shareholders registered on 17 September 2010.

6. Receivables

7. Accounts Payable, Accruals and Other Payables

Notes to the Consolidated Interim Financial Statements (continued)

8. Issued Share Capital

During the six months ended 30 June 2010, the Company did not repurchase any of its own shares. During the six months ended 30 June 2009, the Company did not repurchase any of its own shares although in total it repurchased 425,057 shares for cancellation in 2009 as a whole.

As at the date of issuing the financial statements there were 280,385,616 ordinary shares of US$0.01 each issued and fully paid.

Included within share capital at 30 June 2010 are 3,362,185 shares (December 2009:  3,422,185 shares) which are held on behalf of a subsidiary of the Company. These are accounted for as treasury shares and are included as a debit reserve within equity.

9. Earnings per Share

The calculation of basic earnings per share of the Group is based on the net profit attributable to shareholders for the six months to 30 June 2010 of US$4.7m (2009: US$1.1m) and the weighted average number of shares of 276,996,580 (2009: 277,388,488) in issue during the period.

The calculation of diluted earnings per share of the Group includes the effect of those outstanding share options where specified performance conditions have been satisfied but which have not yet vested. The calculation of basic earnings per share of the Group is based on the net profit attributable to shareholders for the six months to 30 June 2010 of US$4.7m (2009: US$1.1m) and the weighted average number of shares of 279,438,926 (2009: no dilutive effect) in issue during the period.

Shares held by Sanne Trust Company Limited and accounted for as treasury shares as disclosed in note 8 have been excluded from the earnings per share calculation.

10. Interest in Jointly Controlled Entity

As disclosed in the last annual financial statements for the year to 31 December 2009, the distribution of the net assets of the jointly controlled entity triggered the payment of a performance fee during the period. The entity has now been formally liquidated.