New chairman of the group, David Cardale, said the six months to 30 November “was not an easy one for City of London” and said the firm had taken the opportunity to rationalise its portfolio of equity products.
A very large redemption from a single client, which took management of its emerging market exposure in-house, made a tough period worse, Cardale added.
Total funds under management at the company’s half-year end on 30 November were $3.9bn (£2.4bn) a decline of 13% compared with the $4.5bn (£2.9bn) reported at 31 May.
City of London said the decrease of $0.6bn over six months reflected almost entirely the client redemption mentioned above, which totalled $0.5bn.
CEO Barry Olliff said in his final statement in the role that the average discount on the group’s largest co-mingled fund has increased from 7.7% to 13.4% in the past five years.
“This significant head wind has adversely, particularly over the past two years, affected the investment performance of our emerging markets closed-end fund business.
As part of a rationalisation process the firm has liquidated Brazil, Chile, Mexico, EM Value and EM Growth products and has started a new Emerging Markets Equities Small Cap Fund based on the process developed with its Asia Small Cap Fund.
Meanwhile its Emerging Asia Small Cap, Global Absolute Return Fund (GARF) and GARF Plus, Frontier and Global Developed funds have all outperformed their relevant benchmarks in the past year.
Olliff is to retain his role as chief investment officer but his role as chief executive officer has been passed to the company’s finance director Doug Allison.
