Charlemagne Capital Limited : Trading Statement

Charlemagne Capital Limited

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15 January 2013

Charlemagne Capital Announces Unaudited Revenues andAssets under Management and Advice ("AuM") for the year ended 31 December 2012

Charlemagne Capital Limited ("Charlemagne" or the "Group") today issues a trading update for year ended 31 December 2012 in advance of the preliminary results announcement scheduled for 26 March 2013.

Key figuresfor the 12 months ended 31 December 2012

·     Group AuM US$2.6 billion, an increase of 7.9% in the quarter, 13.1% over the full year and 15.6% since June.

·     AuM growth in Q4 with net positive inflows in all areas.

·     Total revenue for the year was US$30.7 million, up 10.4% on the prior year.

·     Net management fees for the year were US$20.5 million, down 9.3%.

·     Net performance fees for the year were US$9.0 million, up 83.7%.

·     Interim dividend of 0.6US cents in respect of 2011 has been paid during the year.

·     Financial strength maintained with cash balances held of US$27 million.

Key Financial Items for the year ended 31 December 2012

The key financial items and AuM for the financial year which ended on 31 December 2012 are set out below.  Values in relation to 2012 are unaudited and may be subject to adjustment during the audit process.

Unaudited revenue numbers for the year

Operational income	Year ended 31 December 2012 (unaudited)	Year ended 31 December 2011 (audited)	Six months ended 31 December 2012 (unaudited)	Six months ended 31 December 2011 (unaudited)
	US$m	US$m	US$m	US$m
Net management fees	20.5	22.6	10.8	10.5
Net performance fees	9.0	49	8.1	4.8
Other income	1.2	0.3	0.6	(0.1)
Total revenue	30.7	27.8	19.5	15.2

Performance fees crystallised in 2012 were US$8.8 million earned from OCCO (2011: US$ 4.7 million) and US$0.2 million from other funds (2011: US$ 0.2 million).  As at 31 December 2012, there were no accruing, uncrystallised performance fees (2011: US$ nil).

As at 31 December 2012, the Group maintained its financial strength with unaudited net assets of approximately US$27 million (2011: US$26 million) and cash balances of approximately US$27 million (2011: US$26 million).

Commenting on 2012 trading Chief Executive, Jayne Sutcliffe said: "After what has been a very challenging period for emerging markets, we are very pleased to see clear signs of recovery in this asset class. The outlook for emerging market equities is increasingly positive, and we are well placed to capitalise on this. With our assets under management growing 7.9% in the last quarter and the momentum continuing in the New Year we look forward to 2013 with confidence."

Group AuM as at 2 January 2013(i)

The tables below show the distribution of the Group's AuM across its product ranges as at 2 January 2013 and the movements experienced during the final quarter and the year for 2012.

4th Quarter 2012

	01-Oct-12	Net Subscriptions		Net Performance		02-Jan-13	Movement In
	AuM (US$m)	(US$m)	(%)	(US$m)	(%)	AuM (US$m)	Period (%)
Magna	309	33	10.7	22	6.8	364	17.8
OCCO	571	7	1.2	19	3.3	597	4.6
Institutional	1,419	48	3.4	59	4.1	1,526	7.5
Specialist	141	1	0.7	3	2.1	145	2.8
Total	2,440	89	3.6	103	4.1	2,632	7.9

Full year 2012

	01-Jan-12	Net Subscriptions		Net Performance		02-Jan-13	Movement In
	AuM (US$m)	(US$m)	(%)	(US$m)	(%)	AuM (US$m)	Period (%)
Magna	260	53	20.4	51	17.8	364	40.0
OCCO	444	113	25.5	40	8.0	597	34.5
Institutional	1,452	(183)	(12.6)	257	18.9	1,526	5.1
Specialist	172	(5)	(2.9)	(22)	(13.0)	145	(15.7)
Total	2,328	(22)	(0.9)	326	14.1	2,632	13.1

(i)  Data is reported as at the first business day of the following period in order to capture all subscription and redemption orders placed during the period but not processed until the next dealing date for the funds concerned. AuM data is net of any crossholdings and is unaudited and may be subject to adjustment during the audit process.

(ii) The percentage for net performance is calculated based upon the average AuM for the year.

Summary

Following a period of two years where emerging markets underperformed developed markets, emerging markets began to outperform again in the fourth quarter of 2012. For the year as a whole, the best performers included Turkey, Thailand and Mexico with three of the larger markets - China, Russia and Brazil - among the laggards.  Investors started to believe that the US's fiscal cliff would be avoided and that China's economy was again accelerating.  These factors, combined with continued low interest rates around the world, encouraged investors to take more equity risk.

As a result, flows have started to return to the asset class. Industry-wide reported flows in 2012 just reversed the outflows of 2011, though approximately 60% of these flows were into ETFs. The Group benefited from net inflows of US$129 million in the second half of the year which, combined with 9.7% positive investment performance,  led to an increase in AuM of 15.6% since June. Management fee income also increased by 11.3% over this period as a result of an increase in gross margin due mainly to the inflow of funds to the higher margin OCCO fund.

2012 was generally a strong year for performance in key areas. The emerging market equity income strategy has seen top quartile performance over the year and since inception. This strategy, which will reach its 3 year track record in June, provides the combination of a high level of income with the opportunity for growth in a low volatility portfolio of quality emerging market companies.  The Latin American strategy continued its strong long term performance and, in spite of continued reported industry outflows from regional funds, was the beneficiary of strong net inflows during the year.  The fourth quarter saw net inflows in all categories; net inflows into directly managed institutional mandates during this quarter were US$75 million, though this was offset somewhat by outflows from white label accounts. 

The OCCO fund completed a fund-raising during this year along with the introduction of higher margin classes and has increased as a proportion of total group AuM.  It has provided consistent investment returns and significant performance fees have been generated during the year.  Its contribution to the Group's financial result is therefore increasingly important but it should be noted that profits derived from this source are subject to a 49.9 % minority interest.

The past eighteen months have seen a period of reduced levels of assets under management, during which time we have taken measures to manage costs while continuing to strengthen our investment management capabilities and resources.  The business was profitable overall during the year as a result of retained performance fees and continues to hold substantial reserves.

In conclusion, it has been a challenging year but the final quarter has produced very encouraging signs that real momentum for growth is now gathering. Inflows in this period have been strong; investment performance has been good and we have established new relationships that should provide further growth early in 2013.  We are particularly encouraged by the ongoing development of our income and growth strategy which we are confident can quickly provide a greater contribution to our business. Higher levels of AuM will result in the increasing utilisation of our operational base, which has the capacity to take on much greater volumes of business, and should therefore generate value for shareholders.

Results presentation

It is intended that there will be an analyst presentation on 26 March 2013 to discuss the results for 2012.

Enquiries:

Charlemagne Capital
Jayne Sutcliffe, Chief Executive	Tel. [phone]
Lloyd Jones, Chief Financial Officer	Tel. [phone]

Smithfield Consultants	Tel. [phone]
John Kiely
Ged Brumby
N+1 Singer	Tel. [phone]
Jonny Franklin-Adams
Nick Donovan

This announcement is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into the United States of America, Australia, Canada, Japan or South Africa or any other jurisdiction into which the release, publication or distribution would be unlawful. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian, Japanese, South African or other securities law. The distribution of this announcement in jurisdictions other than the United Kingdom 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 (or may contain) certain forward-looking statements with respect to the financial condition, results of operations and businesses of the Group. These statements and forecasts are based on Charlemagne's beliefs, assumptions and expectations of the Group's future performance. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to Charlemagne at the date of this announcement or are within its control, that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Data or statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Nothing in this announcement should be construed as a profit forecastor to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Group.

This announcement is for information purposes only and shall not constitute an offer to buy, sell, issue or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for, any securities in Charlemagne or any other entity. This announcement is aimed at providing information regarding the Assets under Management on which revenue is derived by Charlemagne. The unaudited data contained in this announcement are currently provisional and all such data are subject to changewithout notice and, except as required by applicable law, neither Charlemagne nor N+1 Singer assumes any responsibility or obligation to update publicly or review any of the data or statements contained herein.

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