Stock swings harm equity specialist Charlemagne

Emerging market equity specialist Charlemagne posted a 5.5 percent fall in assets under management in the first six months of the year as investor appetite for its core offering was dented by the sharp stock market swings over the period.

The company said it had $3.29 billion under management, down from the $3.48 billion in January but 19.2 percent up compared with the $2.8 billion at the end of the first half of last year.

Negative markets contributed $55 million to the net asset outflows in the first half, the company said on Thursday. Charlemagne posted larger net outflows in the first quarter of the year than the whole of 2010.

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 management fees at Charlemagne rose by 16.3 percent on the same period last year and by 2.7 percent on the previous six months.

Charlemagne, which is looking for a new co-chief investment officer, said it will pay an interim dividend for the first part of the year. The value of this dividend will be announced in September.

It added that the whole emerging markets industry had suffered outflows during the first six months of 2011 with inflows 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," it said.

Interim financial results will be announced on September 13.