UPDATE 2-Charlemagne Capital books net outflows, assets fall

Thu Jul 7, 2011 3:49am EDT

Related Topics

* Management fees up, sees outflows

* Says will pay interim dividend

* Hedge fund range attracts investments

* Shares flat (Adds analyst comment, detail, share price)

By Cecilia Valente

LONDON, July 7 (Reuters) - Emerging market equity specialist Charlemagne posted a 5.5 percent fall in assets under management in the January-June period, as investor appetite for its core offering was dented by sharp stock market swings.

Charlemagne, which manages mutual funds as well as hedge funds investing in Africa, Asia and Latin America, booked net outflows of $94 million from its investments range, following withdrawals from its mutual funds, institutional mandates and advisory ranges.

The Occo hedge funds range and specialist business attracted inflows of $126 million. Charlemagne had posted larger net outflows in the first quarter of 2011 than the whole of last year.

Negative markets contributed $55 million to the first-half fall in net assets, meaning the company had $3.29 billion under management at end-June, down 5.5 percent since end-2010 but up 19.2 percent year-on-year.

Assets under management levels fell "slightly short of ... expectations", analysts at Singer Capital Markets said, noting flows had been negative across the emerging markets industry.

Charlemagne shares were unchanged at 0740 GMT.

The MSCI emerging market equity index was volatile over the six months to end-June, hitting a low in February.

Emerging markets nudged towards a five-week highs earlier this week on the back of encouraging Chinese services sector data.

Net first-half management fees at Charlemagne rose 16.3 percent compared with the same period last year and by 2.7 percent on the second half of 2010.

Charlemagne, looking for a new co-chief investment officer, said it will pay an interim dividend whose value will be announced in September.

It said inflows to emerging markets in general have been scanty and channelled into exchange traded funds (ETFs).

"This has, in turn, resulted in significant under-performance in smaller companies, where we typically find many of our best ideas. We remain confident that these valuation anomalies will not persist in the medium to longer term."

Its first-half results will be announced on Sept. 13. (Editing by Sinead Cruise and Dan Lalor)

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