City of London run rate slows

7th Mar 2011 15:31

Emerging market asset management firm City of London Investment Group saw its monthly run rates decline in the first two months of 2011 and said markets have been a bit twitchy as a result of the situation in the Middle East.Funds under management (FuM) as at the end of February stood at $5.7bn, up from $5.5bn at the end of November last year, the halfway point of the company's financial year. The 3.3% increase in FuM compared with a rise of 3.2% in the MSCI Emerging Market Index over the same period. Confirmed new client assets that are expected to fund by 30 June 2011 total around $100m.The group's income accrues at a weighted average rate of about 85 basis points on FuM, net of commissions payable to third party marketers. 'Fixed' costs remain in line with budget at just over £0.8m per month, and accordingly the current run-rate for operating profit, before profit-share at 30%, is approximately £1.6m per month. "This run rate is below the £1.9m achieved in December but will have already improved again given the performance of markets so far in March," said broker Singer Capital Markets. "As such, we make no changes to our full year estimates which we regard as achievable if markets stabilise," the broker added.The company said it is in the process of recruiting two new experienced marketing executives, one to focus on the US and the other on European markets.