CCAP.L Regulatory News (CCAP)

15 July 2015

Interim Management Statement for the Six Months Ended 30 June 2015

Charlemagne Capital Limited (the "Group") sets out below the key revenue items and assets under management ("AuM") for the first six months of its current financial year. It is expected that the interim financial results will be announced on 22 September 2015.

Key highlights and Group AuM

§ As at 30 June 2015, Group AuM were US$2.1 billion

§ Net management fees of US$10.6 million for the six months ended 30 June 2015

· The Group remains well-capitalised with a strong and liquid balance sheet

The table below sets out the Group's AuM as at 30 June 2015 and the movements experienced in each product range in the period since 1 January 2015.

Notes:

Closing AuM is stated as including all subscription and redemption orders received for the relevant funds as at the close of the period but not processed until the first dealing date of the following period.

Unaudited revenue numbers for the six months ended 30 June 2015

Net management fees receivable were US$10.6 million compared with US$13.4 million for the previous six months and US$12.4 million for the comparable period of 2014, reflecting the fall in average AuM over the period. OCCO management fees, which are subject to a minority interest, accounted for 42% of total net management fee income during the period.

Crystallised performance fees were US$0.6 million compared with US$0.3 million for the comparative period in 2014. Accruing performance fees1 for 2015 which have not crystallised were US$0.9 million compared with US$0.5 million as at the same date in 2014.

Exceptional item

During the period the Group reached an agreement with HMRC under the terms of the Employee Benefit Trust ("EBT") Settlement Opportunity. This resulted in the resolution of all outstanding protective assessments and potential claims for tax and national insurance raised by HMRC in respect of the EBT. The Group has received corporation tax relief in respect of contributions it had paid to the EBT in earlier years that had previously not been allowed as a deductible expense. It is proposed that the resulting net credit of US$3.2 million will be included as an exceptional revenue item within the tax charge of the Group for this financial year.

Dividend

In the absence of unforeseen circumstances, the Group intends to declare an interim dividend in respect of the six months to 30 June 2015. Further details will be provided in the interim results announcement planned for 22 September 2015.

Summary

Emerging markets ended the first half little changed after a volatile six months. The downturn in June resulted in the MSCI Emerging markets index increasing by only 0.7% in the second quarter and by 2.9% in US$ over the full half year. Despite a period of optimism in the spring, there have again been substantial outflows from dedicated emerging market mutual funds. Total outflows reached $21.5bn in the first half, accelerating from total annual outflows of $25-30bn per annum in each of the previous two full years.

The Group's net outflows over the first half of the year are predominantly due to the rebalancing of an existing institutional mandate which also had a large cross holding in Magna. In total this mandate accounted for an outflow of US$182 million. The Magna Emerging Markets Dividend Fund continued to enjoy net positive subscriptions and, excluding the above, Magna would have posted a net positive inflow overall for the period.

Performance has continued to be strong in key areas. Over the period, five of the nine Magna sub-funds were in the top half of their FactSet Morningstar peer group, with three in the top quartile and none in the bottom quartile. This performance was achieved in spite of a pronounced style factor in the early part of the year which penalised the higher Return on Equity stocks we prefer. Furthermore, the rise in Chinese shares over the first half, in which we are generally underweight on quality grounds, was also a headwind for us. Over the last three years, seven out of the eight Magna funds were in the top half of their peer groups. This demonstrates our focus and ability to deliver competitive returns to counter negative market trends. The Group has been recognised by Lipper as a Funds Awards 2015 winner, being named best group over three years equity small Austria, Germany, Europe, France, Netherlands, Nordic and Switzerland.

Outlook

The period was dominated by two very different markets, one very large, and the other seemingly insignificant. China's stock markets - especially the domestic ones - were propelled higher by successive rounds of monetary easing. By June, however, they had started to give up the strong year to date gains, under the pressure of margin lending which reached 9% of free float and price-earnings ratios of 20x in the case of Shanghai and 50x for Shenzhen. Current consensus suggests that China's woes are largely a domestic problem and one that the Chinese authorities can overcome with the numerous policy options available to them.

Greece meanwhile is a market accounting for only 0.3% of emerging markets capitalisation, though the majority of headlines given the complexity of the European project. For different reasons, neither should have a significant impact on the wider global economy.

In summary, the Group has again experienced net outflows during the period and saw a further reduction in AuM. The average level of AuM during the period was US$2.2 billion compared with US$2.6 billion last year and is below the level required to ensure sustainable profits on a recurring management fee basis. Market performance, growth in assets and the generation of performance fees during the second half of the year will again be significant factors in determining full year profit levels. Growth in AuM is our primary focus and the Group is confident of achieving sustainable new business inflows in the short to medium term. We are pleased to report, therefore, that a new Middle East and Africa mandate of €50 million is due to be funded at the end of July.

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1Performance fees accrue throughout the reporting period in the accounts of each relevant fund. It is the group's accounting policy only to recognise such revenues as they crystallise at the year-end date of the fund or, in certain cases, on redemption. Levels of accrued performance fees at any particular time should not be seen as necessarily indicative of the eventual crystallised figures, especially in periods of above average market volatility.

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