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(Alliance News) - City of London Investment Group PLC said Tuesday its assets fell sharply in the quarter ending March 31 and it held off proposing a final dividend.
The asset manager ended March 31 with FuM of USD4.40 billion, down from USD6.01 billion three months prior. The company's Emerging Market funds slipped 27% over the quarter to USD3.24 billion.
"All strategies underperformed over the period due primarily to closed-end fund discount widening and, to a lesser extent, NAV underperformance. This was particularly acute during March in the immediate aftermath of the economic dislocation caused by Covid-19, which prompted selling pressure across all asset classes," the company said.
City of London recorded net outlfows of USD35 million for the quarter.
"In recognition of the challenges posed by the Covid-19 pandemic, the board continues to monitor closely the group's financial position," City of London said.
The company added: "Shareholders will be aware that your board has always ensured the company maintain a strong balance sheet with significant cash reserves and zero debt as we believe this policy provides a vital financial cushion to weather unforeseen events and market volatility such as that presented by Covid-19."
However, the asset manager noted it is "impossible to know" the duration of the Covid-19 pandemic, so is not willing to propose a final dividend for the year ending June 30.
"However, your board is cognisant of the importance of dividends to our shareholders and will review the position after the year-end," the company added.
Shares in City of London Investment Group closed 5.5% higher in London on Tuesday at 345.00 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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